Chennai: Tough to come by tenants, most posh empty with ECR

Poor demand from expats and a general decline in real estate demand resulting from the COVID-19 outbreak have affected the market for the city's posh villas, most notably along the East Coast Road (ECR).

People invested in the villa mainly to cater to expats working in multinational companies in and around Chennai. As most expats have either left the country or moved to core areas of the city, the badge owners are now struggling to find tenants. As a result, a good number of villas are empty.

This has forced real estate developers to stop new projects as buyers have also become a difficult task. Most of the buyers were NRIs, Realtors.

The premium villa segment, which reached great heights in 2012, is losing its luster without any allowances being cut by expats and companies. According to estimates by real estate agents dealing with rentals for foreigners, the population that comes with ECR has fallen from 2,500 to 500 in four years.

Currently, about 60% of the 3,000 villas between Nilkarai and Uthandi on the ECR are vacant. The rent for properties with elaborate lawns and swimming pools previously ranged from Rs 1.2 lakh to Rs 2.5 lakh per month. Although some inquiries are being made about the demand from the residents of the city to relocate these posh properties, the deals are yet to take place as people are not ready to take up houses for such high rents. Owners do not want to reduce rent because the returns do not justify the investment they make and prefer to deal with a company as it did with expats rather than individuals.

In addition, many landlords prefer expats because there is no risk in vacating tenants and uninterrupted rents.

Mohan Kartha, a real estate agent who has been working with Accent Rentals for a decade, said that the villa market has now become a tenant market. Now, they are ready to revise their rent by 50%, but cannot find expats. Foreigners visiting the city earlier this year are being accommodated in a cheap rented apartment in core Chennai.

Srinivas Anikipatti, Senior Director - Tamil Nadu and Kerala, Knight Frank India said that the current status of ECR ​​has prevented a major developer from starting a villa project of 400 plots at Kovalam.

During Financial Crisis How To Manage EMI Payments?

Unlike our ancestors, who worked hard for years to buy their home are open to the idea of ​​purchasing their property for home loans. There is no doubt about taking home loans due to government policies. But at the same time, motivating oneself has made the youth tense and fearful about the unexpected future. Out of all the loans a person takes for a lifetime, the home loan is the most difficult to repay. A normal home loan is taken for a period of 5 to 30 years. EMIs are easier to manage when a home receives some rental income, but this is not the case with self-used property.

Well, we have never seen the future. But at least we can be ready to face it. In this writing, we have shared some great tips to help you manage the payment of EMI during financial stress.

1) Don't Overload Yourself - If you have invested in multiple properties, and repaying a home loan is a difficult task that makes you feel stressed, and then take action on time. Instead of living a stressful life, you should consider getting rid of the burden. These days, you can easily sell a property, even if it is under debt obligation. Alternatively, you can rent it to a suitable tenant or real estate company. By renting property or renting it to a person or business organization for a long period, you can earn a regular income that can be used to pay off debt.

2) Speak to the bank at the right time - Whenever you feel inability to repay a home loan, do not hide the truth from the bank by avoiding its message or call. Rather, you should be transparent about your position to the bank. In general, banks try to support their customers in adverse circumstances.

3) Maintain a contingency fund- To face the effects of adversity such as job loss or economic downturn; you should maintain expenses for about 6 months as a contingency fund. Due to low interest rates in savings accounts, you can keep this money in fixed deposits.

4) Get insurance - Does not come with a life guarantee card. In certain situations such as job loss, economic downturn or death, loan installments may not be paid on time. Failure to pay a home loan can lead to a situation when the house or its collateral will be confiscated. To prevent such situations in unexpected future, you should get home loan insurance.

5) Make quick payments - In some situations, it can be difficult to repay the EMI of a home loan. But reducing EMI payments every month will increase the outstanding principal amount. If possible, try to make a quick repayment of the principal amount as it will reduce the financial burden. Remember that repaying home loan should be your priority over other expenses.

Builders Priority to Clean Ready-to-Occupancy Inventory During COVID-19 Outbreak

Real estate sales in India were improving in the first quarter of 2020, until the social distancing advisory was implemented by the government, with the outbreak of the COVID-19 virus continuing, reducing site visits. Subsequent lockdown forced house buyers to postpone the decision to buy their home until the government and the market had more clarity than stability.

The economic relief measures announced by the government are extremely positive for the real estate sector on a large scale. This measure will compensate for the short-term impact of the crisis and increase liquidity, thereby easing credit flow and reducing the pressure of delivery deadlines. This will allow real estate developers to reorganize their business strategies and focus on high priority operations without additional financial burden. It will also ease home buyers' concerns and accelerate the completion of delayed projects. This step highlights the magnitude of the realty sector in India. Being the second largest employer in India, it is mandatory to protect the welfare and interests of all stakeholders.

Currently, the priority of most builders is to sell ready-to-occupant inventory. Now that the government has relaxed the lockout, the market may pick up momentum again, with more buyers entering the market. Although sales will be comparatively slow, it is unlikely to affect real estate prices overall, which has also maintained flexibility during demonetization and other reformist changes previously announced by the government .

In these challenging times, as people have realized the importance of owning a house, the demand for residential properties may increase in metro cities.

Better demand for property is likely to have a positive impact on property prices.

The place for price appreciation in real estate as the city offers quality housing options at affordable rates. Although the lockdown caused a short period of delay in construction activities, a reduction in prices is unlikely.

Amidst Corona virus Epidemic: Know the Impact on Financial Investment in India

The whole world is facing the COVID-19 epidemic. And, while its outbreak in China has only ended a few months, it has already affected 74,61,261 people worldwide, recording 4,19,070 deaths so far. The rapid spread of the virus has prompted people to keep their money in liquid form. Thus, instead of investing in the market, more people are selling their property. In just a few weeks, the epidemic has shaken investor confidence. Thus, the SENSEX is showing an unprecedented slowdown. In addition, the crude oil war between Saudi Arabia and Russia has led to instability in the equity and debt markets.

It is estimated that very soon, corona virus can infect two-thirds of the world's population. This scenario is going to have a negative impact on the Indian economy as well as global economic growth. Let us examine the effect of COVID-19 on most investment routes in India.

1) Sensex is below its 10-year average

The stock market is in turmoil as broader market valuations have slipped below the 10-year average. This is the worst time to sell shares as the Sensex has turned negative. The value of shares in the market has fallen by 44 percent, yet due to uncertainty people are eager to sell their shares. While some financial experts suggest that this time may be optimal for long-term investors, hype is that the market may take several years to recover. In addition, there may be a further decline of 8 to 10% over the next few years. Therefore, there is no certainty for the recovery of higher returns in the future.

As the stock market is witnessing heavy selling, this is the worst time for short-term investment. Right now, you should stay away from small and mid-cap stocks until the volatility settles.

2) Tourism and aviation are showing a sluggish business

The rapid proliferation of corona viruses has severely affected the aviation sector. Most international flights have been canceled, and even domestic carriers are showing sluggish business. Tourism is an important opportunity for income generation in India, but unfortunately, there is a panic in the tourism sector as thousands of tourists are barred from visiting India.

As a result, the hotel and restaurant industry is also showing a petty business. Also, all places of entertainment have been closed because avoiding public meetings is a preventive measure against COVID-19.

3) Gold is not so good for investment

Currently, gold prices are touching an all-time high due to the outbreak of COVID-19. Gold has been seen as a place of investment, with equity markets taking a step back from risk. Although gold is expected to benefit from the low yield scenario, it cannot be considered an interest-bearing asset. Eventually, gold prices will definitely decline after a few months.

If you are already investing in sovereign gold bonds, this is an opportune time to sell them and profit from gold price movements. But now investing in these bonds will not be beneficial.

4) Real estate shines amidst all the uncertainties

As the novel corona virus continues to spread throughout the world, the residential real estate market will feel the effects of quarantine. According to an estimate, only 15% of households in India provide at least one room per person, which is mandatory for self-quarantine. Therefore, in the next few months, there may be high demand for fully furnished homes on rent. And, property owners can take advantage of high rental demand.

As the government focused on the need for social isolation, the sale, purchase and construction of real estate will continue for the next few months. According to a survey, between the COVID-19 hit markets, there has been no change in the interests of the buyer and seller. Therefore, there will be almost no impact on the prices of assets. Although the commercial real estate market may not attract new rental interests over the next few months, there will be no drop or rise in their prices.

While each avenue of investment is showing a degree of uncertainty, real estate is the safest option at hand. Investing in stock and tourism businesses cannot be rationalized at present as these sectors are showing no signs of recovery soon. While gold prices have gone up, there is a strong possibility of a fall in prices after a few months. Therefore, if you are thinking about investing your money, then real estate is the best option as it is possible to drop its prices due to any market fluctuations or political, economic and social scenarios.

Plan to fight corona virus? Pay attention for house you live in

The rapid introduction of corona viruses has endangered the entire human community throughout the world. Although corona virus was first developed during 1937, a recent version of corona virus that originated from Wuhan, China is responsible for an acute respiratory syndrome that is highly fatal. Among humans, corona virus infection occurs mostly during the winter and early springs as the virus finds a precise environment to live and thrive.

The World Health Organization and many research institutes around the world are looking for an action plan to control the spread of the deadly virus. Currently, preventive measures basically focus on avoiding human-to-human transmission. In addition, there is a need to focus on the environment - water, soil, air and man-made surfaces.

Dark and dirty environments serve as a repository of pathogens. If people live in a contaminated environment, they can become infected with the virus. Therefore, to deal with virus outbreaks, it is important to live in a green building. Some of the reasons supporting this idea are:

1) Airlessness and vapor barrier in building walls

Viruses mostly live as living cells in an organism's body. But when they are not inside a host, it is present in the environment as small particles. There is scientific evidence that most pathogens live in dark, cold, dirty environments. Generally, viruses prefer low temperatures, about 4 ℃, and low humidity. Therefore, to prevent them, it is better to stay in the green building. Aeration and vapor barrier in building walls retain moisture and moisture from outside.

2) Low solar heat gain coefficient

Green buildings include a low solar heat gain coefficient that is the amount of solar radiation that enters through the glass and is released as heat inside a building. A low solar heat coefficient ensures that the environment has a moderate temperature that eliminates the growth of pathogens.

3) Open, natural environment

Most infectious diseases, including severe infectious respiratory syndrome that are caused by corona virus, are due to human-to-human contamination. Thus, it is better to live in less crowded areas. Green buildings are usually constructed in open, large spaces, probably in a suburban location, which is very good for the prevention of the disease.

4) Antimicrobial floors and walls

Green buildings have anti-microbial floors and walls that can inhibit microorganisms. There are no seams, welds, or grout lines on these surfaces where fungi and bacteria can potentially irritate and grow. Thus, green buildings promote clean and hygienic conditions.

There are many real estate developers in India who are developing green buildings. By staying in these houses, you can avoid infectious diseases to some extent. These include airtight walls and floors that can improve air quality by eliminating the entry and growth of microbes. And, there are many other benefits of living in green buildings including energy conservation and rainwater harvesting. Also, the building materials in these buildings never harm our environment or harm people in it.