Real estate trends had gotten highly opinionated and PR driven with no one laying facts to back their views. NHB Residex is perhaps the first attempt to scientifically base property trends and Kochi has been included as one of the 13 cities covered. National housing bank at the behest of Ministry of finance takes only actual transaction price to reach the index price. For Kochi 2007 was taken as the base price and the trends are being evaluated on a half-yearly basis.

Though the Jan-july 2009 reports are still awaited the earlier report gives some insights into locations and may help arrive at where to invest. As per the report the Mattanchery zone has shown the overall highest positive return with an 8% growth from 2007. However, the prices indicated in this territory has been volatile.  The Central zone comprising of  Fort Kochi Vili, Karugapalli,Venella, Mammankalam have shown highest stability and a reasonable appreciation. Prices have come down by around 5% in these areas. Elamakkara, North,,Podukalavattom have depreciated by around 6% from 2007 levels. Panampilly Nagar, Maradu, Thevara are the other premium destinations owing to proximity of the city and her the rates have come down by around 8% vis a vis 2007 rates. However rates in these areas have recovered from their early 2008 lows. There is no mention on Kakkanad which we suspect was the worst hit in the crash. Prices are down by around 205 from their 2007 highs. The over supply situation continues in this zone. The Vytilla zone has seen a marginal depreciation of 10% from their early 2008 highs.  However when compared to 2007 prices the decrease is only marginal. While too much cannot be read to the NHB Residex at this point we believe that as the number of data points increase over a period one would be able to do some meaningful interpretations and this would come to the aid of investors.

For those looking at opportunities here is a snapshot on asking prices we have gathered  in some of the areas.

Panampilly Nagar     Rs2750 - 3300
Kadavanthara            Rs.2600 - 3000
Thevara                        Rs.3500 - 4500
Chilavannoor             Rs.3000 – 3500

Kaloor                           Rs. 2800 - 3000
Palarivattom              Rs. 2600 - 3000
Edappally                     Rs.2800 - 3400
Vyttila                           Rs.2600 - 3200
Kakkanad                      Rs.2500 -2800
Marine Drive              Rs.6500 - 8000
Aluva                              Rs.2000 – 2600

These are just indicative rates. Primarily the rates depends on location, accessibility, builder, facilities etc. So go drive a bargain.

Joint family, a thing of the past in Kerala is coming up in the new form of a new concept called Community living. There was a time when members of a family lived together sharing all their feelings may it be happiness, agonies, difficulties, enjoyments whatever. It was really a well knit family concept. It gave all the security and comforts of a family in the real sense. But as the time progressed, with the fast paced life, people distanced from this true family atmosphere. Small families of father, mother and their children emerged. With it, the problems of selfishness, lack of trust, affection among the family members etc came up. Now, people really understand the advantages of Joint families. They find solace and happiness in Community living.

Coming and living together of close friends or family members who share a common idea or a life style is the main essence of Community living. This is real need of the hour at a time when the construction cost finds its maximum and the feeling of Selfishness and mistrust rule the society. This concept is more viable when people find their abode in Apartments. It will be so cost effective and secured once people start living in one Apartment in harmony. The headache of finding the proper land and other hassles can be minimized by this. Though every body shares a common building, each family can do their interiors according to their taste and preferences. Even, there is no need of particular security here as all the families take care of every other family’s security concerns. They can find time off their work and stay together at regular intervals on Holidays. The other thing that is particular about this living style is that people don’t feel secluded or alone in their life. A feeling of somebody all the time at their doorstep for help or talk make them feel happy and contented. Even builders like Asset Homes have come up with a  concept called CRG ( Close Relation group ) Homes. They say that homes are built in relationships. They have already come up with a few Apartments  of this sort.

If adjustments and sharing can be enjoyed, people can think of starting a community living with their family members and friends. At the same time, they can bring back the old nostalgic memories and virtues of Joint family culture.

The Union budget 2009-10 didn`t have any budgetary allocation for Kochi Metro Rail project. Even it didn`t mention about it. It was contrary to what the civic authorities of Kochi had expected. Kochi Metro Rail project was the part of Prime Minister`s 100 day package. Still, it was kept out of the purview of this year`s Union budget. The painful thing is that other Metro Rail projects at Bangaluru, Chennai and Kolkkatta got the due budgetary support and allocation except Kochi. Even Delhi Metro Rail Corporation got Rs.3000 crore for its mordenisation purpose and maintenance.This has spelt doom for the hopes of  Kochiites to have a Metro Rail project in Kochi. The only hope is that Government of Kerala has earmarked the fund for this mega project. But, will it be  enough to complete this ?

The argument of the traders that that metro sounds the death knell for their businesses defies logic. Yes, during the construction phase it would cause hardship to traders and more than half of M.G road would be non-usable.  But, this is a very short term view of things, especially for a public utility which is to re-define the city. In our opinion a re-alignment of the line passing through m.g road would take the meat out of the project and pretty much defeats the whole purpose. As such business is getting out of the CBD and moving to places like the bye-pass. Looking forward this one utility would be the only thing that would retain M.G road as the hub of business. Is that too difficult to figure out? World-wide if you look at the trends, it is typically around utilities like the metro that growth happens.

The government should stick to its guns and under no consideration allow a re-alignment. Kochi metro rail.

There are many legal hassles waiting for those who go for buying properties of their choices. Kerala Property lawLegal aspects of buying property in Kerala

Verification of the documents -

1. Tax receipt

Both House tax paid to Panchayat/ Muncipality and Land tax paid to Village office have to be checked and verified. A probe based on the property tax has to carried out in the village office. The information regarding the court acquisitions and unregistered leasing of the property will be available there. You have to ensure that the name of the heir has been added in the column asking the name of the holder of the Pattayam. If there is a building, make sure that the possession right of it has been added in the records of Panchayat/Muncipality/Corporation office. The block no, re revenue survey no, area, address of the owner etc in the tax receipt have to be checked in the thandapper register and the Computer in the Village office. If there is a computer error, conducting the pokkuvaravu will be troublesome. Check whether the property you want to buy is mentioned as House, stream, Road, Land or Outside land in the records of Village office. Remember, if you buy property mentioned as stream, road, agricultural land, or outside land, you can’t construct house .Also, you have to verify with the village office whether the land is included in the ceiling case or not. Also, find out in which zone (Residential zone/ Industrial zone/ Agricultural zone) the land is placed. This can be known from the Town planning office or Development authority office.

2. Title Deed

Verifying the Title deed is an important part while going for buying the property. Original Title has to be checked. Make sure that you get the copy of the same and keep it. The copy of the prior deed is also needed. All these documents have to be examined by a competent person who knows better about the legal side of the Registration.

3. Property Measurements

Property should be measured by an authorized person in Revenue department or a licensed Surveyor. A sketch of the property showing the measurement should be kept. The property needs to be measured based on the sketch from Revenue or Survey department. It is good if the owner of the property and owners of the adjacent properties are present while taking the measurement of the property.

4. Liability certificate

Ensure that there is no liability on the property by taking the Liability Certicate from the registrar office by applying for it with the required fees in the required Performa. Normally, Liability Certificate is taken for a period of not less than 13 years. If there is any pending liability on the property, secretary/ president of the financial institution has to register and sign on the ozhimuri adharam showing the non liability on the property. Then only the property can be considered devoid of liability. If the property is having any court cases pending, the copy of the court order showing the omission should be filed in the Village office and Sub registrar office once the litigations is over.

5. Other things to be taken care of

Sale agreement needs to be written only after confirming there are no legal hassles or liabilities. It will be very difficult to get back the advance if you withdraw from the business after having got into a sale agreement. The Identity cards of both parties have to be seen by each other in order to avoid the pseudo personification.

6. Registration

Title deed should be written by a reliable document writer. Photos of both parties should be submitted at the time of registeration.Two witnesses should sign on the written document saying that they know the seller. At the time of registration also, two witnesses should sign on the document before the Registrar. There is no need of buyer being present at the time of registration. If he is an NRI, he needs to put the signature and thump impression on the document and send it across. Identity cards of both seller and buyer should be produced at the time of registration. They have to divulge all the details of other properties they own. Paying the amount of the property through Bank is legally good. The copies of PAN card and identity card of both parties have to be produced in the registrar office if the total price of the property exceeds 5 lakhs. If they don’t have PAN card , special declaration should be given. Buyer will get a document after the registration showing the details of the registration.

7. Plan approval to possession certificate
To get the plan approval, you have to approach the Panchayat/Munciplaity/Corporation office with the application form in the prescribed format. Three copies of the plan, copy of the title deed, possession certificate, land tax receipt etc should be attached with the application form. The original Title has to be shown in the office. Panchayath office accepts plans attested by licensed Engineer/ supervisor only. After the verification, it will give the go ahead for starting the construction. Normally the permission will be given within 30 days from the date of submission of application. The construction should be completed within three years after getting the permission. The duration can be extended after remitting 10 % of the earlier remitted fees. Application for getting the number for the building has to be moved after the construction is over. Completion certificate and the the plan should be produced with the application form. After this, the concerned officials will visit the property to ascertain the tax and provide the number. Possession certificate will be issued after after applying for it with the required fees.

8. House tax in Village office

One time house tax needs to be paid in village office once the construction of the house is over. It is not applicable for a 100 sq.ft house. The tax is rs.750 for houses in panchayath area having the area 100 sq.ft to 150 sq.ft. It is rs.1350 in special grade panchayath/ municipality area. Rs. 2025 is the fees in corporation area. The fees for houses having area 150 sq.ft to 200 sq.ft vary between Rs.1500-4050 and for 200-250 sq.ft it is between Rs.3000-8100.

9. Luxury tax
Luxury tax is to be paid for a house having 3000 sq.ft area in the village area. Rs.2000 is the luxury tax for a year.

10. Electricity connection
There are two types of connections-Commercial and residential connections. To get the electricity connection, you have to move the concerned office with the application with all the required documents like Identity card, possession certificate, approved plan/permit, wiring plan etc. Rs. 125 is the fees for those who are below povertry line. Rs. 300/ Kw is to be paid as per the connected load for those who are above poverty line. The connection is issued on a priority basis. OYC is to be paid to get the speedy connection. Rs.1500 is the amount to be paid if the connected load is 5 to 10 kw. It is rs.9900 for connected load 10-25 kw. If an electric post is needed additional amount has to be paid. If the request for electric connection is moved not by the owner, authorization letter of the owner saying that he is interested to give the connection to the house has to be produced.

11. Water connection

You can take water connection during the construction period or after the completion of the work is over. If the connection is needed for the construction phase, you can apply for the casual connection that is valid for one year. Casual connection can be converted to domestic connection after the completion of the houase.The application for water connection is available at Water authority sub divisional office. You need to submit the application form with the copies of building permit, ration card and house plan. After this, the Asst Engineer will visit the location and give the temporary permit for the water connection. The owner of the house has to sign on an agreement on the Rs.50 stamp paper and should submit in the office. With this he has to give the water meter also. The office will accept deposit and the required fees. After this the work order will be given to the applicant. Based on this, he can engage one plumber and get works done. The work has to be completed within six months after getting the work order that is the stipulation. The completion certificate availed from the plumber has to be submitted in the office. The water connection will be issued ultimately by the concerned officials after checking the plumbing works. A special application has to be submitted in order to transfer casual connection to domestic connection. Permanent domestic connection is being issued only when the the house gets the building number from the panchayath office. The deposit amount will be reimbursed once the casual connection is transferred to permanent domestic connection.

Guruvayur, the most important pilgrimage center of South India is attracting Builders and Developers to come up with more offers of Residential Apartments. Guruvayur apartment
A holy visit to the Guruvayurappan temple and the sight of the Lord’s idol are enough to make devotees feel pure and blessed. The no of Pilgrims visiting the temple is increasing day by day. This in turn, increases the need for more living spaces. Other than staying in Hotels and lodges, people want to be in homely like atmosphere before heading to the sacred temple. They want the coziness of their own home to make the arrangements for the temple visit. All these wants and expectations of the pilgrims prompted Builders to come up with various Residential offers. Now, we can see more no of Residential Apartments are on the construction stage in and around Guruvayur. They offer Service Apartments, Studio Apartments, 1 BHK, 2 BHK and 3BHK Apartments. Service Apartments and Studio Apartments are considered to be apt when it comes to the residential needs of pilgrims who normally stay for one day or two days or even one week. Service Apartments offer the most modern amenities of a star Hotel coupled with the comforts of a house where a family can stay with the feeling of their own home. Investors also find it a good investment as they are assured of a regular monthly return by sourcing out their space to outside agencies that run it. Studio Apartments also attract more people who wish to stay for short duration. It comes with living cum dining room, bedroom with attached toilets and kitchen all in one space together .The prevailing selling rate for studio Apartments is around Rs. 2300/ sq.ft. The West nada and East Nada are seeing more no of Apartments coming up as these are the main entrances to the temple. Also, major roads to Thrissur, Kozhikkode and Ernakulam go through this side. Leading builder Cheloor has come up with two Apartment projects there in Guruvayur offering Studio and 1BHK flats. Santhimadom Builders and Developers based in Guruvayur has already come up with premium Villa projects. A few other builders also follow suit by launching Apartments in Guruvayur envisaging the demand in the future.

‘Luxury’ was the keyword in the last boom with Kerala builders, all and sundry focusing on the same segment. Yes, kerala was a consumer market and NRI’s and malayalees domiciled in other parts of India were the target customers. Yes, a lot many in this  audience have seen the best of places and have a concept of quality. They lapped the offerings at a ‘premium’ without too much of a difficulty. Yes some of them even went in for a second place with borrowed money, but then that was it. The frenzy was such that anyone who could afford or were eligible to finance have bought one or more properties in Kerala or elsewhere. So, assuming most of them have leveraged themselves out let us see as to what could drive the next boom.

The fact is that for the market to expand you need a new set of buyers. So who would that be? To find this out we will have to do a  bit of math and look at the logic. Let us assume that the price per square feet for a standard apartment in the major cities/towns of Kerala averaged Rs.2300. Assuming that the standard size off a 2 bed room apartment is 1000 sq ft, that works out to 23 lakhs + registration to work out to  roughly Rs. 25 lakhs. At that price assume bank financing upto 80% (Banks right now are quite wary!!) which is 20 lakhs. At an approximate monthly instalment of Rs.1000 per 1 lakh for a 15 year loan that would work out to Rs.20000 a month as EMI. Banks while checking borrower’s eligibility look at a limit of say 60% of free cash flow toward the EMI. This means one needs have a minimum monthly salary of say Rs.40000 to qualify for a loan of a that size. That leaves one guessing as to how many would qualify. The answers for the builders are available right there.

The next boom will have to driven by the concept of affordable housing in kerala. Right now this is an exception. Affordable housing does not mean builders cutting corners and quality getting compromised. The system will correct itself to work with greater efficiency and delivering quality output to the buyer at affordable prices.

Buyer complaints on endless delays in project/property handover is now commonplace. There are enough number of cases where delays range from a mere 3 months to 1.5 years in some cases with no firm commitments. True, builders have been caught on the wrong foot by recession but that hardly justifies the concerns of buyers. Real estate in Cochin, Real estate in Calicut and Real estate in Trivandrum have been the worst hit in Kerala.
One major reason has been that many builders went on a land buying spree during the real-estate hey days and paid big rupee for creation of land banks on the assumption that the market is uni-directional. They over stretched and over leveraged in their rush to acquire properties. Money from launched projects were first diverted into this act in the hope that the cash cycle would take care of itself. With the market crash, builders including many of the big ones found themselves with huge assets and dismal cash flow. The only option was to sell some of those assets at hugely discounted values which is what some of them have been forced to do.
Invariably, all builders have delayed projects testing the patience of many a buyer. Remember, a lot many of these buyers paid a premium during the boom to book properties and if they were to sell it today it is likely to be at a loss. Many of these buyers have taken finance and this is a cost which they have to bear for no fault of theirs. Opportunity loss in terms of rentals is also to be considered. Of course the fine print on the contract provisions for nominal compensation from the builder but would that suffice?

The Kannur real estate construction scene has been evolving over the last 3 to 4 years. While land prices have shot up like the rest of the market apartments have made a slow entry into the hiherto unknown territory. With its the strong NRI base, Cannanore would not have missed the radar. No doubt the recession has had an impact as builders report sales have been far and few. There are prominent builders like Oceanus and Malabar builders who have multiple projects in various stages of completion. However it is some of the smaller players who are more focussed. There seems to be a preference for villas over apartments as we see developers like Squarefeet builders launching a villa cum residential project in Chala, not far from the city centre. While rates for apartments have come down to around Rs.1500 to Rs.1800 per sq ft, villas come at around Rs.2000 plus per sq ft. Apartments in Kannur. Villas in Kannur

Retail development in Kochi

No doubt, the M.G Road is still the nerve centre of retail trade in Kochi with Marine Drive supplementing it. But what does the  future hold? There are some fundamental aspects to look into when talking about the direction retail hubs Cochin would take.  Kochi real etsate.

Retail concentration in Ernakulam is mostly in and around M.G Road, the Marine Drive and Broadway. Of these Broadway has remained stuck in time with no major change happening over the last few decades. M.G road holds the chunk of retail establishments and these include jewellery, clothing, footwear, eateries, banks, theatres and commercial offices. M.G Road has run out of quality retail space and there is limited activity happening at the moment. Apart from the Peevees mall coming up right next to Abad Plaza and the couple of smaller ones closer to the north end there is little by way of retail expansion. This has lead to rentals turning more expensive and the retailers looking at newer centers of growth. Marine Drive has seen some good amount of retail growth in the last few years with the addition of a couple of mini malls. There is more coming up including the Kerala Trade Centre of the Kerala Chamber of Commerce. New developments coming up north towards the Goshree Bridge is also likely to pick up. Current rentals for retail spaces in these prime roads range from Rs.60 per sq ft to Rs.150 per sq ft.

The south end of M.G Road is yet to pick up but the cost of real estate there is likely to have a bearing on any potential development that side. Again a good length of M.G Road still houses pre-1980 buildings. With increased FSI there could be a pick up in building make-overs with substantial space getting added. Ernakulam property

As to the east the Kaloor-Kadavanthra road with its swanky new look could draw parelells to M.G Road in more ways than one. Its proximity to residential areas will help its case. Panampilly Nagar could also emerge as a mini retail hub which could house upmarket brands. Rentals on this road currently ranges between Rs.25 per sq ft to Rs. 80 per sq ft.

However the biggest challenger to retail in the Central Business District will be the NH-47 bye-pass. It is already home to a number of businesses including car showrooms, accessories, furniture dealers. With 2 (Oberon and the Souk) malls starting operations, 2 more under construction (Grand Village (A P project and Lulu) and few more on the drawing board (Prestige )one wouln’t be surprised if it takes the sting out of M.G Road. What helps the bye-pass’s case is the traffic situation in Ernakulam and the fact that the typical customer is not someone who resides in Ernakulam. A bulk of these customers pass through the bye-pass to get to CBD. They would be glad to go in for more convenient shopping.

What could change the dynamics back in favour of the CBD?

Traffic buildup is becoming the biggest deterrent for shopping in Ernakulam. The vehicle population has been growing exponentially and in the absence of any new public transport intiatives the situation is going to deteriorate. The main entry points to the city which is the north and south overbridges are taking loads way beyond their capacity. The Pullepady bridge has been in development for a long time now and has not seen the light of the day. Every now and then we hear noises on overbridges at Atlantis, Pachalam but these are distant dreams. Ernakulam property

Kochi Metro is what provides a glimmer of hope. Given Ernakulam’s layout the metro is the best thing that could happen to Kochi.Once completed this has the potential to change the face of the city. The current alignment runs through the nerve and contrary to perceptions aired by various merchant’s fora this has the potential to take Kochi to the big league.

Broadway and surrounding areas are the heart of wholesale trade and could be anything from metals to hardware, sanitary, wood, interiors, plastics, toys, clothes. The city’s main market is also located here. Moving the wholesale market to the outskirts should be looked at as this could ease the pressure on the Ernakulam main lines. A majority of shoppers, retail and commercial live in areas upto 200 kms radius. Not everyone would require to come into the city and add congestion.