Lower Parel, Prabha Devi and Worli are the locations in Mumbai that hardly see any growth in the market. The western suburbs is also not flourishing and have many unsold flats. Areas from Mira Road to Bhayander have however achieved a gradual growth in the real estate sector.
To fund one of its biggest projects, a luxury resort south in Mumbai, Sahara conglomerate are using small savers by funneling cash from them.
According to the documents filed by the company’s regulator, Sahara has raised at least 15 billion rupees ($221 million) through investments in preference shares from two of its credit cooperatives into the Aamby Valley resort project.
As some of the investors of credit cooperatives complained about the difficulty to pay out their matured time deposits even as low as 30,000 rupees to Sahara,
Though the credit cooperatives investments into Aamby Valley are not illegal, they are allowed to invest in shares and bonds of infrastructure. They can also invest in real estate companies if they are in the interest of the cooperatives and as per law under which they operate, but after board approval.
As per the spokesman for Sahara Credit Cooperative Society Ltd, “All required approvals were in place and the investments would not put investors at risk.”
According to Aamby Valley’s 2014 annual report, Sahara Credit Cooperative had shares worth 10.39 billion rupees in the project.
New Delhi: The Real Estate (Regulation and Development) Bill on Wednesday was tabled for the approval of twenty changes by the government. The changes included a pro-consumer attempt to protect buyers and developers from the major risk of land fraud, through insurance of land title. This legislation has come after almost three years, and hopefully, will help in regulating the unorganized sector, remove loopholes and will guard buyers through setting up of regulators in each state.
A jail term of up to three years, or, penalty, or both in some cases has been proposed in the case of builders, whereas it is one year for buyers and real estate agents in case they violate orders of the appellate tribunals. To ensure completion of projects on time and minimize diversion of funds, a major change to benefit the consumers has been proposed. This entails the condition of keeping 70%of sales proceeds for any project in a separate account, so as to meet the construction cost of that project, including land cost. Projects can be graded by regulatory authorities to aid buyers, along with grading of promoters, in making a reasonable choice whilst investing or booking.
As there is little or no protection for consumers currently, the Cabinet is keen to table the bill in the current session of Parliament. In one of the provisions, the consumer can directly approach district level consumer forums, instead of just regulatory authorities. The time limit of 60 days has been imposed to dispose of complaints, so that delay can be prevented.
In a move to make more credit available to property purchasers, the Reserve Bank of India (RBI) on Thursday increased the amount banks can advance to borrowers. It has also reduced the risk weight that is attached to some kinds of home loans. This move is aimed at improving the condition of the stressed real estate market in India.
In the notice, RBI has allowed a 90% in loan to value ratio (LTV) for the home loans of Rs. 30 lakhs or less. Before this move, a 90% LTV was only given for loans up to Rs. 20 lakhs. Loan to value ratio (LTV) is the property value a bank can lend to a borrower.
Keeping, the LTV at 90% means that a purchaser of property will have to give 10% of the property value while the rest will be financed by the bank. If the LTV falls between 80% and 90%, the capital to be set aside by the banks will be 50% and if it falls below 80% for loans of Rs. 30 lakhs, the risk weight will drop to 35%. This move comes amidst a slowdown of property sales in the country.