The real estate is the most happening and naturally the most talked about thing at present.

Which factors affect it the most? Do inflation and rise in global oil prices have an effect on the realty market as such? How will real estate fare as a sector in years to come?

Will the state of real estate in India be any different than real estate abroad?

Get answers to these and many such queries in an online chat with Kekoo Colah, executive director, Knight Frank (India) Pvt Ltd on February 14, 3 pm.

Colah obtained a BTech. in Mechanical Engineering from IIT Bombay and MSc in Management Science from Imperial College, London.

Prior to joining Knight Frank, he was with Larsen & Toubro and Ingersoll-Rand and has about 25 years' experience in sales, marketing, finance, corporate planning, project evaluation and implementation.


(Due to circumstances beyond our control, date and time of chat may change)

Source:rediff
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  • Answers by Kekoo.......

    'Want to invest in realty? Wait for govt guidelines'

    Questions poured in from every corner as Kekoo Colah, executive director, Knight Frank (India) Pvt Ltd, came online for a chat on real estate on Wednesday. Colah took his time studying each question thoroughly before coming up with well thought out answers.

    Here is the transcript of the scintillating chat:

    Kekoo Colah says, Hi, this is Kekoo here; let me attempt some of the questions received.

    Question:
    1.Is the real estate boom going to continue, given the fact that home loan interest rates are increasing and also there are talks about removing the tax exemptions on home loans....?
    Ans: Demand factors remain very strong across real estate sectors. Please understand that home loan interest rate increase will affect, to some extent, only the residential sector. Even here there is significant pent up demand which will not be very affected by the interest rate increases, but those looking at 2nd and 3rd home purchases for investment will reconsider.
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    Question: will the government succeed in breaking the builders lobby to contain the flaring realestate price??
    Ans:We tend to blame the govt and hold them responsible for everything. Real estate prices have gone up substantially over the past 3 years, but very sharply over the last 1 year, because of huge increase in demand and inadequate supply meeting that demand. With economic growth at record levels, sentiment so positive, consumer led growth, easy availability of finance and interest rates having gone down (compared to 16-17% a decade back) the demand for houses, offices, shops, etc has hugely increased. To bring real estate product to the market requires some minimum lead times and this is also one reason why prices have gone up to such an extent. The best approach for the govt is not to curb demand but debottleneck any supply constraints (transparency of rules, consistency, simplification, etc.)and let the market forces do the rest.
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    Question: hi, if my main aim is liquidity then is real estate the real destination for investment? i stay in bangalore. so is it advisable to buy real estate in Bangalore or say 50 kms outside bangalore? which will be more beneficial? thanks in advance
    Ans: No,real estate is a fairly ill liquid asset class to invest in. Govt has several months ago announced that real estate mutual funds will be permitted, but detailed guidelines are still awaited. Once these are permitted, the general public would be able to invest in the real estate sector and have the required liquidity; please wait until then.
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    Question: up to what time this realestate boom continues??
    Ans:I wish I were a fortune teller but, unfortunately, I am only a real estate professional unable to give you a precise answer.
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    Question:With the property rates + interest rates going up and up, the way it is, soon market would not be able to sustain itself. If so, when do you see that happening and how should a buyer insulate himself from this?
    Ans: Individual investors (as opposed to funds and institutional investors who have a good knowledge base and perspective of the market) should assess the quality and reputation of the developer, their track record and product being sold before taking any investment decision. Good titles to the property are an absolute must as this is a problem area in India and, because of the time delays involved, any litigation can be expensive and lengthy.
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    Question: Hi Colah!! As inflation is going high do you think within 2 years real estate will come down?
    Ans: Minor corrections in micro markets across the country are bound to take place periodically, but the general trend would continue to be upwards unless there are some serious untoward economic or political developments which affect growth and sentiment.
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    Question:Has an spurt in the number SEZs created a new benchmark in real-estate, in metros - i.e. is the real-estate boom here to stay.
    Ans:So far we have only heard a lot of news about people wanting to set up SEZs. Even after there is full clarity and consensus on the SEZ policy, it will take several years before significant amount of product comes into the market. What we will see happening before that are a no. of township developments across the country and these will help to stabilise price increases in the metros and other cities as there will be good quality options available.
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    Question: If the FDI limit increases in near future what will the effect
    Ans: FDI limit for what? minimum area requirement, minimum investment? FDI norms were revised and made less stringent in March 2005, post which India began to see serious investors and developers considering real estate projects in the country. Given the opportunities that the Indian market offers, foreign interest can only go up.
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