‘Affordable housing is a demand category yet to be taken up’

Everyday, thousands of home-seekers surf the Internet, looking for their dream home. How does the residential property market look through the lens of a property portal? Ganesh Vasudevan, vice president and business head of indiaproperty.com, gives an overview to Moneylife

Moneylife (ML): Let us start with how a property portal works. How do you collate data for your website?

Ganesh Vasudevan (GV): We get information from both the demand and the supply side. On the latter, we have the advertisers: individuals, agents and builders who post on the property they have to offer. On the demand side, we have the customers who surf the existing posts or even put up their own requirements. How effective a property portal is depends on how much handholding it does for the customer in identifying a property.

Indiaproperty.com provides video walkthroughs of new projects and details of new properties, along with interviews with the developer. We also research the neighbourhood and provide other relevant information. The idea is to help customers through the entire process.

ML: Since you monitor all these searches and data, can you outline some consumer trends?

Well, I will say that trends are very region-specific. But we do see a shift occur from bigger to smaller apartments. Demand has shifted from 3BHK (three-bedrooms/hall & kitchen) units to 2BHK units. Even if customers do want a 3BHK flat; like those who have families with two kids; they are looking for flats with a smaller area of around 1,300 sq ft.

The reason is reduction in budget. Lending rates on home loans have gone up, and even for double-income households, new properties within city limits are becoming unaffordable, particularly in Mumbai and Delhi.

If I am booking a flat (costing) Rs50 lakh, I need to prepare a buffer of at least 10% of the amount, like Rs5 lakh for added charges and other expenses in the period between booking the flat and taking possession. With interest rates going up, my eligibility for a home loan at a fixed level of income reduces. So my aim will be to look for cheaper flats—either by reducing the apartment size or by settling for a location farther from the city.

ML: Location-wise, what kind of change have you observed?

GV: Affordability is the reason that people are moving to the outskirts. The so-called 'prime locations' are out of reach of most buyers. With improved transportation infrastructure in most metros, people can buy a home in the outskirts of a city and travel daily to their office.

ML: In Mumbai and NCR (National Capital Region), the property hotspots, we see that there is a slowdown. What do you think is the situation going to be like?

GV: Definitely there is a gap between demand and supply. Unsold inventory has been piling up—so in the medium term, we will see oversupply in some areas. Nationally, the NCR and Mumbai make up for more than 50% of new apartment supply in the country, and absorption of new properties in these markets has dropped sharply.

But the long-term picture is robust, simply because the demand for housing in urban areas far outstrips supply, and sooner or later, a person will buy a house. Many customers hence are mentally prepared for fluctuations in price and lending rates. In fact, we have not seen a drop in search volumes for properties in these cities and the number of fresh enquires for new properties is increasing. That shows that the demand has not waned.

ML: How have the builders responded to this present glut?

GV: Like I said, medium-sized units are now becoming more popular. Some builders who are overleveraged, resort to discount sales under pressure. But new technology has come up, which if adopted, will make a big difference. In south-east Asian countries, developers are using in situ casting and other such methods for fast development of multi-storeyed apartment blocks, bringing down construction costs at the unit level, which could lend to value-based pricing of projects.

ML: Is there a demand bracket which has seen very limited supply? For example, in Mumbai, we have a demand for studio apartments, which very few people offer.

GV: One such sector is affordable housing. The term doesn't mean simply low cost housing, but rather a no-frills unit both in the basic apartment and in amenities provided, so as to give a value for money alternative to buyers. These houses may be 2BHK flats with 1,000 sq ft area, priced between Rs15 lakh-Rs20 lakh. We are seeing this trend emerging in pockets near and around commercial and industrial centres. In the Delhi NCR region, you will see a lot of studio apartments which have come up along the Yamuna Expressway.

ML: Any tips for prospective home buyers who search on the Internet?

GV: While short-listing, look for developers or builders who have a credible track record. Search in portals that provide a wide width and scope in terms of options.

Also, try viewing the property location on Google Maps, so that you get a fair idea of the locality. Does it have schools, hospitals, parks and other amenities?And it is definitely advisable to take a second legal opinion on the property particularly—for used properties and land before signing the deal. In most cases, it is the bank which evaluates the property, but it is better to verify things yourself. Check that all required documents, clearances and records are in place. While negotiating the deal with the builder, ensure you understand the construction agreement terms clearly—particularly penalties for delayed payments and delayed delivery of the flat.




5 years ago

The question is what is affordable, to whom? What is affordable from the point of view of builder and developer may not necessarily affordable to the end user. Instead of confusing the house buyers in the name of affordability, builders / developers, should reduce their level of greed and do business. Look at the wealth created by the builders / developers for themselves post liberalization by exploiting the middle and salaried class.

Finance Ministry dismisses allegations made by former whole-time member of SEBI as distortion of facts

As the tussle between KM Abraham and the Securities and Exchange Board of India gets more bizarre, the finance ministry has gone one step further, saying it has received serious complaints against the former member of SEBI of abuse of power and corruption

The Abraham-SEBI saga is getting more bizarre day by day. In a very unusual move, the finance ministry has issued a strongly-worded statement saying that recent allegations made by Dr KM Abraham, a former whole-time member (WTM) of the Securities and Exchange Board of India (SEBI), are defamatory, devoid of any truth and a complete distortion of the facts.

The ministry has said that it received complaints from several sources against Dr Abraham, ranging from abuse of power to corruption and the purchase of a flat at a concessional rate from an entity, which had benefitted from a deal on the sale of office space to the National Stock Exchange (NSE).

While the NSE is regulated by SEBI, Dr Abraham as WTM had jurisdiction to decide on many critical issues related to the exchange, the ministry said. NSE's purchase of land in Kohinoor City, at Kurla, in suburban Mumbai, is also an interesting story, that Moneylife had reported in August 2009. (Read, 'The Mystery of NSE's land acquisition at Kohinoor City'.)

In addition, the finance ministry said it received references on the alleged links between Dr Abraham, the NSE and the National Securities Depository Ltd (NSDL), on the matter of the role of SEBI in trying to protect NSDL in the initial public offers (IPO) scam, which led to a loss of Rs115 crore. (Read, 'Moneylife stand on SEBI-NSDL vindicated.) 

According to the statement, since January 2010 it has also been receiving letters on the conduct of Dr Abraham. The Central Vigilance Commission (CVC) and the Department of Personnel & Training (DOPT) also referred a complaint received from a member of parliament (MP) to the finance ministry.

"All this while Dr Abraham was making efforts to continue as a whole-time member for another two years. Failing in his efforts, he tried to become the head of the National Institute of Securities Markets (NISM) on the basis of a recommendation made by CB Bhave, the previous chairman of SEBI, without submitting a panel of names as was required under the relevant rules. The ministry in a fair and transparent process advertised the posts for the selection of WTMs. The last date for the receipt of applications was 18 April 2011."
"Thereafter, Dr Abraham sent the letter to the prime minister (PM) alleging interference by the Ministry of Finance in the affairs of SEBI, in a host of cases, through the present chairman, SEBI (UK Sinha). The allegations made against the Union finance minister (Pranab Mukherjee) or his advisor (Omita Paul) that they put pressure on Shri Sinha to manage any case whatsoever, or that the Regulator's integrity has been undermined are false, vexatious and defamatory," the statement from the ministry said.

Mr Sinha reacted with an equally hard-hitting letter (read, 'The stink coming from SEBI-1')  which Moneylife has reviewed. The letter exposes the murky goings-on in the past three years under CB Bhave, whose allies in the process were two key members of SEBI. Remember, that during that period, Mr Bhave had positioned himself as a champion of the small investor and a crusader against corporate malpractices. Moneylife alone has been reporting with persistence the real murky practices inside SEBI.

Dr Abraham's credibility, or the lack of it, has to be seen from his own utterances regarding Mr Sinha, the current SEBI chairman. After a conference on 4th May, Dr Abraham praised Mr Sinha. However, within a month he changed tack and wrote a letter to the PM accusing the income-tax department of harassing him over the purchase of an apartment in Mumbai (we will come to the details later).

Dr Abraham also accused finance ministry officials of interference in his work "with the knowledge of finance minister Pranab Mukherjee". And as it turned out, his sharpest and most specific allegations were reserved for UK Sinha, his new boss, for interfering in several high-profile cases!

According to the statement, the finance ministry has all along taken a dispassionate view in the complaints against Dr Abraham that have even been referred to it by MPs. It has refused to intervene in the cases where even Dr Abraham was alleged to have acted in a partisan manner and told the aggrieved parties that they should take recourse of the existing legal mechanisms to redress their grievances.

"The minister (Mr Muikherjee) has strictly respected the integrity and independence of SEBI. As the advisor of the finance minister has said, 'She did not know Mr Abraham and she had never spoken to him'. Equally, nobody from the ministry, much less the finance minister, has ever tried to in any way to interfere with any case pending with SEBI at any level," the finance ministry said.

You may also want to read...


Justice Sen resigns ahead of Monday’s impeachment motion

Justice Soumitra Sen of the Calcutta High Court was found guilty of misappropriating Rs33.23 lakh under his custody as a court-appointed receiver in the capacity as a lawyer, and misrepresenting facts before a Calcutta court in a 1983 case

Kolkata: Justice Soumitra Sen of the Calcutta High Court on Thursday avoided the ignominy of becoming the first judge to be impeached by Parliament by tendering his resignation, reports PTI.

53-year-old justice Sen sent in his resignation to president Pratibha Patil five days before the Lok Sabha was to take up an impeachment motion against him.

The Rajya Sabha has already passed the motion making him the first judge to have been impeached by the Upper House for misconduct.

In his letter to the president, justice Sen said, "I am not guilty of any form of corruption."

"There is no allegation against me that I am guilty of passing any order or judgement for extraneous consideration or that I have abused my power in any way so that my family or relatives or acquaintances have amassed wealth, but sadly I am still facing a motion of impeachment," he said.

The judge said in the anxiety to take definitive action against corruption, even a judgement passed by a division bench of the high court was being completely brushed aside with the remark that the judges had favoured him.

Justice Sen who dismissed the charges against him said, "I do not come from a family of judges or politicians." The judge said he had given up a fairly lucrative practice not to amass wealth by resorting to corruption but to serve the august institution being the judiciary and consequently the nation.

Justice Sen, in a separate letter to Lok Sabha speaker Meira Kumar, said, "I wonder whether my issue is the real issue of corruption and abuse of power by people in high places or I am being made a sacrificial lamb in the alter of justice as a showcase to tell the nation that at least something has been done to clean the institution from corruption."

The judge admitted that he may have made 'mistakes' as a junior advocate 19 years back but went on to ask, 'who is above making mistakes, no human being is infallible, but to accuse me of dishonest intention as a judge or otherwise I firmly repudiate."

Justice Sen said like in the Rajya Sabha, he will not get a chance to respond to submissions made by members in the Lok Sabha in his absence and hence "it appears to be a foregone conclusion".

Along with the letter justice Sen gave a point by point rebuttal to three allegations against him made during the Rajya Sabha debate.

"I have decided not to go to the Lok Sabha and instead put in my papers," justice Sen, who was to have appeared before the Lok Sabha on 5th September, said.

Justice Sen was found guilty of misappropriating Rs33.23 lakh under his custody as a court-appointed receiver in the capacity as a lawyer, and misrepresenting facts before a Calcutta court in a 1983 case.

After a seven-hour long process marked by a brainstorming debate on 18th August, the Rajya Sabha had overwhelmingly approved the impeachment motion against Justice Sen.

189 members of the 206 present in the 245-member House voted in favour, recording well over 2/3rd majority required for such a move.

The impeachment, first time in the Rajya Sabha and second in Parliament's history, saw members of all parties, except BSP, holding Sen guilty of misconduct.

Appearing before the bar of the house, 53-year-old justice Sen had denied any wrongdoing and argued that he was a 'victim'. The judge had appealed to members to vote by conscience.

Impeachment proceedings were undertaken after an inquiry committee, set up by Rajya Sabha chairman, held justice Sen guilty of misconduct.

Justice Sen, who became a permanent judge of the Calcutta High Court in December, 2003, had blamed former Chief Justice of India (CJI) KG Balakrishnan of targeting him by becoming the accuser, prosecutor and a judge.

The judge said he was even threatened in the former CJI's drawing room with a CBI enquiry when he declined the offer to take VRS and a plum posting in return for his resignation.

The impeachment proceedings followed motions moved by Sitaram Yechury (CPI-M) and leader of the opposition Arun Jaitley who made it clear that justice Sen's continuance as a judge had become untenable.

Following receipt of justice Sen's resignation letter, the Lok Sabha secretariat said the attorney general would be consulted on the issue.

Justice PD Dinakaran, Chief Justice of the Sikkim High Court, against whom the Rajya Sabha chairman had set up a judicial panel to enquire into allegations of corruption, had resigned on 29th July this year, before impeachment proceedings could be initiated against him.

The first such case involved the impeachment motion in Lok Sabha of Justice V Ramaswami of the Supreme Court in May 1993 which fell due to lack of numbers after Congress members abstained.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)