Area watch: Karnal
Secondary Slump
Stiff competition from Sonepat and Zirakpur has given a setback to the resale market in Karnal, reports Bhanu P. Lohumi

The secondary market in Karnal seems to be wading in troubled waters as buyers are preferring to stay away from properties that are on resale. This has tipped the applecart of investors who were hoping to make significant profits from their real estate investments in Karnal. With prices of property stabilising slightly at a lower level as compared to those last year, the boom in real estate market here appears to be over. Facing a tough challenge from other rapidly developing real estate hubs like Sonepat and Zirakpur, the realtors who were earlier active in Karnal area, too, are now slowly shifting focus to the interior areas of the district.

Karnal had been seen as a promising property investment destination due to its ideal location on the national highway and proximity to the national Capital. A substantial number of ambitious infrastructure, educational and industrial projects planned for the city had also sent property prices soaring here. The prices of the property had shot up in Karnal around three years back and had caught up almost with prices at Sonepat and Zirakpur. But sale volumes have nosedived over the past few months.

Market paradox

Start fishing for reasons for this dramatic shift in buyer preferences and one comes across an interesting paradox.

If it was the ideal location of Karnal that had made it a prime real estate destination, ironically, now it is the same factor that has taken the sheen off the realty mart of the city. With developers getting overactive in Sonepat towards Delhi side and in Zirakpur towards Chandigarh side, Karnal has suddenly become a distant and poor choice for those wanting to stay connected to Delhi and Chandigarh - the two major development hubs in the region.

Comparatively lower prices of property was a major attraction of Karnal for homebuyers, and most of the people had bought flats and plots for investment purpose expecting the prices to appreciate as real estate development leapfrogged from Sonepat to Karnal with time. But now most of such investors are in a fix as the first choice of high-paying customers is either Sonepat or Zirakpur as there is plenty of choice available in these locations that are much closer to Delhi and Chandigarh, respectively.

Craze for new

Going through the market trends of the past few months one can see a definite preference for new flats and apartments among the buyers. The properties that are being offered in resale are not getting a positive response as of now. There is a decline of 10-15 per cent in rates of these properties as compared to the prices last years, says Amit Arora, a city-based proper dealer. According to property dealers in the city, the premium in Sector ranges from Rs 25,000 to Rs 50,000 depending on the location. The price of 2BHK apartments is between Rs 27 and Rs 30 lakh while the 3BHK cost between Rs 38 and Rs 47 lakh, informs Amit Garg, a local property agent.

Expansions tip the scales

Locally too, the developers who have residential projects in and around Karnal have been in an expansion mode and have been adding new phases and more flats and plots in the existing projects. As a result all those who had invested in the initial phases have to face competition from within as new buyers have a choice of buying in the new phase at a lesser rate than buy from the secondary market. This has lead to a severe crash and stagnation in the secondary market in different township projects in Karnal. The developers have pegged the prices of third and fourth phase developments below the "premium level" and new buyers are more inclined to acquire newly built properties at competitive prices. Alpha City, spread over an area of 300 acres has got the completion certificate for its first phase (141 acres) after providing houses for economically weaker section and is gearing up for Phase 3, which will be spread over 100 acres.

Sanjiv Katiyal from Ansals said the first phase of 100 acres is completely sold out and at a premium of Rs 16,000 to Rs 22,000 while work on another 35 acres is yet to commence.

Palms Regency is all set to roll out 550 flats build over an area of 5.3 acres. The construction of 174 flats is complete while another 100 flats are nearing completion.

Shift in focus

Another factor for dip in sales in Karnal is that the developers are shifting focus to interior areas like Indri and Assandh. Citi Tech has come up with 26 acres for developing plots along Karnal-Assandh road in Assandh and 26 acres on Indri-Ladwa road in Indri.

Another project Crown City, spread over an area of 35 acres is coming up at Gharanuda. This move, however, can be described as a positive trend from the point of view of buyers as people in small towns and villages will now get access to houses at cheaper rates and infrastructure facilities, too, would improve.

Vinay from Satyam properties says that this shift was inevitable as there was not much premium in resale as the prices in Karnal are almost on par with Zirakpur and Sonepat. The premium being asked in the developed sectors ranged between Rs 20,000-25,000 per sq m while the hike in rates of new properties developed by realtors was between Rs 18,000 and Rs 28,000. Tehsildar Hari Om Atri said the prices of property in residential area in prime location like Model Town, Kunjpura road are Rs 50,000 per sq yd. Commercial property rate in the same area is Rs 1 lakh per sq yd.

Property Peek

In expansion mode

n Alpha City, spread over an area of 300 acres has got the completion certificate for its first phase (141 acres), and is gearing up for Phase III, which will be spread over 100 acres.

n The 100-acre first phase of Ansals project has 100 per cent bookings, and work on another 35 acres is yet to commence.

n Ras complex comprising 450 studio apartments is completely sold out.

n Palms Regency is all set to roll out 550 flats built over an area of 5.3 acres. The construction of 174 flats in this project is complete while another 100 flats are nearing completion.

Credai furthers customers’ cause

Delays in possession of house, failure to meet commitments, increasing costs, and ambiguity over sold areas, are some of the common complaints against builders. The Confederation of Real Estate Developers Associations of India (CREDAI), being the apex body of real estate developers in the country with over 8,000 members, is now banking on peer pressure amongst its members to resolve such consumer complaints. All its members have signed a Code of Conduct which is a self-governing mechanism requiring them to adhere to the prescribed levels of transparency with their customers.

Apart from committing to being transparent with the customers on area calculations, approvals’ status and specifications, the Code of Conduct requires the developers to declare upfront the compensation in case of delay in possession.

"The primary concern of consumer is transparency and accountability. Many middle class customers carry this perception that developers are not answerable and that the only recourse is litigation, which is a long drawn and messy process", says Pankaj Bajaj, President, CREDAI, NCR.

According to Bajaj, the idea behind the code is to differentiate clean developers from fly-by-night operators in a sector which has been maligned for its opaqueness.

To give teeth to the Code of Conduct, CREDAI has simultaneously launched a Consumer Grievance Redressal Forum where any member of the buying public can lodge a complaint against a CREDAI member. "Self-governance and peer pressure are powerful tools. We have been running a pilot project of this exercise and found that 90 per cent of the complaints against developers got resolved due to the peer pressure from the CREDAI forum on the developer concerned", adds Bajaj.

"Complaints can be lodged on the CREDAI NCR website. CREDAI NCR is also embarking on an advertisement campaign - Is your developer CREDAI accredited? - to raise awareness about this initiative. — TNS

Living with Vaastu
Bring balance through balcony
madan gupta spatu

A balcony is a platform that projects from the wall of a building and is surrounded by a railing. It is usually attached to and can be accessed from the bedroom. It is utilised for relaxing, sitting, reading newspapers, magazines etc. or having a cup of tea and unwinding. It may or may not have a roof.

In some cities, the local administration such as Estate Office in Chandigarh, have allowed certain percentage of extension in marla houses making the owners construct balconies in such houses without taking into consideration the efficacy of vaastu norms. Here are some tips to be considered while designing a balcony.

n Balconies, verandahs, and terraces should ideally be built on the north, northeast, or east sides of the house, not on the south or west sides. If a balcony is on the southwest side of a house, it should be covered and closed.

n The floor or roof over a balcony or terrace should be lower than that of the main building. It is best if the verandah's roof is slanted toward the northeast.

n Avoid using asbestos or tin for the roof of a balcony. The acrylic coloured/transparent sheets are a good roofing material choice for such structures.

n The verandah's corners should not be rounded, and balconies should not have arches.

n Flowerpots on the verandah should be small. No creepers should be planted on a verandah.

n The seats on the verandah should be set on the south or west sides.

The roof of the house should slope towards the northeast and rainwater should flow to the north, east, or northeast direction.

n Heavy furniture and seating should be placed in the south-west of the balcony.

n Swing should be in the east-west axis.

n Small plants should be placed in the north-east of the balcony. Keep only small flower pots in the balcony.

n Avoid putting in the balcony flower pots with creepers or rubber plant which produces or discharges white fluids.

— The writer is a Chandigarh-based Vaastu consultant.

Reality Bites
Innovative Bricks

As the trend of eco friendly buildings gathers momentum in the country many people are involved in developing materials and technologies to create self-sustaining and environment friendly structures. Taking a step in this direction is Shashank Agarwal, a student of Class XI of Amity International School, Noida, who has used simple, cost-effective materials like cow dung and water to make bricks that can be used to build cheaper structures.

Bricks made from cow dung are a greener option than the kiln-baked traditional bricks, and are 70 per cent lighter also. The basic materials needed for making these bricks are available easily, especially in the rural areas. Talking about his new bricks Agarwal says, "It is an effort to best utilise natural materials. These bricks are light weight which is an advantage at the time of an earthquake". Ask him why he chose cow dung for making the bricks, and pat comes the reply, "Cow dung is believed to have anti-bacterial qualities. It serves as a disinfectant. It is also an excellent and inexpensive insulator. It is good for health, keeps away insects, besides keeping the house cool in summers and warm in winters." 

Imperia launches Esfera project

Real estate group Imperia Structures, performed bhoomi pujan at the site of its first residential project, Imperia Esfera, in Sector 37, Gurgaon. The 17-acre new project is very close to NH-8 and Dwarka Expressway. Speaking on the occasion Harpreet Singh Batra, MD of the group said, "Esfera aims to provide a holistic urban living to residents with conveniences like a shopping mall, multiplex, clubhouse, landscaped gardens and more". — TNS

Tax Tips
Accounts officer's deduction is correct
S. C. Vasudeva

Q.I am a Haryana Government employee and working as a Xen with UHBVN at Kurukshetra. During FY 2011-12 the actual house rent received by me from my department is Rs 44,162 while 40 per cent of my salary (Pay + Grade Pay + DA) is Rs 2,84,232 and house rent paid in excess of 10 per cent of salary during the period is nil (actual house rent paid to my landlord is Rs 45,000 and 10 per cent of my salary is Rs 71,058).

Now while computing my income tax, my Accounts Officer has not taken into consideration the deduction of Rs 44,162 from my gross salary under Section 10, on the plea that out of the above three things the least is 'Nil'.

Now my query is whether I am entitled to deduction of the aforesaid Rs 44,162 from my gross salary or not? — rajiv anand

A.In accordance with Rule 2A of Income-Tax Rules 1962, the amount which is not required to be included in the total income of an assessee in respect of house rent allowance has to be worked out as under:

n Actual amount of HRA received by an employee.

n The amount by which the expenditure actually incurred on the payment of rent in respect of residential accommodation occupied by assessee exceeds one tenth of the amount of salary due to him for the relevant period.

n An amount equal to 40 per cent of salary due to an assessee in case the residential accommodation is situated at a place other than Mumbai, Kolkata, Delhi and Chennai.

The amount which is not to be included in the salary income is the least of (a), (b) or (c).

On the basis of the figures given in the query, the equation in your case would work out as under:

Actual amount of HRA received Rs 44,162.

Excess of 10 per cent of salary over rent Nil (10 per cent of salary is higher than the amount paid)

40 per cent of salary Rs 2,84,232

According to the above equation you are not entitled to any exemption in respect of HRA as the least of three is 'nil'. Your Accounts Officer is, therefore, right in pointing out that you are not entitled to any exemption in respect of HRA.

Can I bypass housing society rules?

Q.I own a flat in Panchkula in the Air Force Naval Housing Society, Sector 20. I wish to transfer it to my son who is already living there. Going through the procedures of this society is cumbersome as well as costly. Will the way of Will suit me, and can I bypass the society that way. — Pushkar Nath

A.You can make a Will by virtue of which the flat would be inherited by your son after your death. Please note that the Will takes effect only after the death of a person. You may, in this regard, look into the bylaws of the society which would be required to be complied with for the transfer of flat in favour of your son on the basis of the Will. These requirements may please be looked into before executing a Will in respect of the flat.

Am I eligible for rebate on home loan?

Q.I am working as loco pilot in the Indian Railways and had taken a home loan of Rs 5 lakh in which my father is the main partner and my name is in the second place. But when I submitted my papers (bank statement) for tax rebate my office superintendent told me that I was not eligible to avail of a rebate on house loan as I am living in railway accommodation and my children are studying in the same city, and I am claiming their tuition fee from the Railways.

The home loan had been utilised to construct a house far away from my workplace (approximately 300 km). House rent is also being deducted from my salary and HRA is not being given to me. I have also submitted an affidavit from my father stating that he is not availing of any tax rebate (he is a retired government employee and not a tax payer now).

Sir, the accommodation provided by the Railways is not a permanent shelter for me and my family and the house built by my father and me jointly is a permanent shelter for us. The monthly installment of home loan is paid by me (submitting cash directly on bank counter). Am I eligible or not for the tax rebates? — Mayank Joshi 

A.A deduction in respect of repayment of amount borrowed from bank is allowable under provision 80C of the Income-Tax Act 1961 (The Act) to an assessee who is the owner of the house. It seems that the house is owned by your father and you are one of the co-borrowers of the loan. The deduction in respect of the amount paid towards the repayment of the loan can be claimed by your father. You are, therefore, not entitled to claim any deduction under Section 80C.

Ground Realty
Convenience scores over style
Jagvir Goyal

All those looking for bathroom fittings and accessories have a tough time making up their minds as the market is full of brands and choices. A large number of companies have launched so many products in this category over the past few years that the buyer stands completely lost in the cacophony of 'features and characteristics' explained by the marketing managers. Comfort, convenience and maintenance-free usage are the major features projected by each company. Style and look come next.

The reality, however, is a lot different. Users are often found grappling with the fittings, registering their complaints, waiting for the repair gangs to arrive to restore the working of the fittings installed. The company plumber always has an explanation ready about how the user had mishandled the fitting. And the user has to cut a sorry figure.

It is important to choose the right fittings and installations for trouble-free use of bathrooms. Simplicity and functionality should get preference over 'looks' and 'brands' that have become status symbols these days. Let's have a look at some important points to be kept in view while hunting for bathroom fittings:

Flush valves, a wasteful expenditure: Flush valves are often used with the water closets (WCs) instead of flushing cisterns. The main reason for choosing these is that no cistern needs to be installed and thus more space is available in the bathroom. A simple lever is visible to operate these. However, flush valves have two major drawbacks. One is that these draw large volumes of water from the water tank, causing wastage of water. Very often this leads to empty overhead tanks, especially in summer months. Second drawback is that these make a lot of noise during night as all the water contained in the pipe above the valve gets drained due to gravity.

Some cities have now banned the use of flush valves. The ban needs to be extended to more areas to save water. Users, on their own, should avoid using flush valves for noiseless use of toilets and to save water.

Avoid using shower diverters: The use of shower diverters has also become common nowadays. These diverters have four-way valves in them to divert water to the faucet or the shower, as required, and also to mix hot and cold water. However, plenty of problems are being faced by the users.

These problems include malfunctioning of the valve, blockage of valve after some time, water not rising to the shower and partial flow from the shower as well as the faucet due to lack of pressure, replacement of inner disc etc. Though the diverters are guaranteed by the supplier for several years, the users face lots of inconvenience in lodging complaints, waiting for the plumber and in getting the diverter repaired. Even if no charges are paid, a lot of time gets wasted in all this plus the inconvenience of having to deal with a dirty bathroom floor after the departure of the repair team. Sometimes, when a non-user (some guest) applies extra force to switch over to the shower, the lever comes off in his hand, causing embarrassment to the guest as well as the host.

To avoid all these problems, the best solution is to avoid the use of a diverter. Separate faucets for hot and cold water look so convenient to the user. In addition, a simple mixer can be used for the shower in winters. But if you must use diverters, then you must look for a highly skilled plumber to fix it as many plumbers don't know the right method of installing diverters. In addition, the diverters should be of a highly reputed and tested brand.

Right seat cisterns: Another latest trend is the use of wall hung seats. Concealed cisterns are suggested as the ideal choice for attachment to a wall hung seat as these occupy no space. The concealed cisterns are not only costly (priced between Rs 6000 and Rs 8000) per cistern, but also have maintenance problems. In smaller cities plumbers don't remove the actuator plate properly and damage the flush mechanism while removing it by putting their hand in the crevice. One may go for a low level cistern attached to a wall hung seat and no problem is ever faced in their use. The cistern knob is convenient to press and the water pressure is excellent. These prove quite cheap also.

Safety first: Many types of flooring is now available for the bathrooms. This includes marble, granite, tiles, terrazzo flooring etc. The anti-skid quality of flooring is of utmost importance. Thus the use of vitrified tiles with gloss is a strict no no. One may choose anti-skid tiles with a textured surface, marble or terrazzo floor for the bathrooms. Care has to be taken in the initial years of use when the polish is fresh and gloss is high. It is ideal to install grab bars or grip handles at appropriate locations in the bathrooms. Elders often need them. Grip handle should always be provided near a bath tub as it is easier to get up from a soapy tub bottom by gripping the handle. Slip guard treatment can also be given to the bathroom floors.

Perfict fittings: Though many types of finishes like powder coating, chromium plating, bronze finish, gold plating, silver plating and platinum finish are available for bath fittings, chromium plated (CP) fittings are the most popular because of the glitter that these add to the bathrooms. There is a large variation in cost of CP fittings. If CP fittings are not wiped or rubbed daily with a moist cloth to remove water marks and salt deposits, these lose their shine very soon and look ugly. Choose CP fittings and make it a point to spend a minute on rubbing them with a moist cloth every day.

Mindful mixer choice: In poor quality mixers, the lever or knob develops some play very soon. Often, a bush is provided in the mixers to eliminate the play. Prefer to choose quarter-turn mixers than full-turn ones and further see that their levers are of brass instead of zinc or white metal. Also look for provision of aerators in the mixers. These help in getting foam like flow. Take care to clean the aerators at regular intervals. These can be easily removed by using a key provided by the manufacturer and need washing with water or vinegar.

This column is published fortnightly.

All deals on taxman’s radar
S.C. Dhall

If you're planning to buy a house then expect a call from the taxman. The IT department has decided to toothcomb property deals all over the country to uncover irregularities or tax evasion. Individual as well as corporate deals are set to come under the taxman's lens with this move.

The IT department has decided to review all property deals to find out whether any black money has changed hands and detect tax evasion, and action will be taken in appropriate cases

This will be the first step of its kind. Though the IT department has been building a tax information network (TIN) to examine financial dealings, it has thus far not zeroed in on a deal-by-deal basis. The department had scoured transactions and accounts involving all major real estate players or property dealers in Delhi, but no individual transaction had been reviewed. Henceforth, property deals, whether by an individual or by a real estate company, will be reviewed.

Tax worth thousands of crores of rupees is reportedly evaded every year in property deals because buyers and sellers disclose only a part of the transactions while the remainder changes hands in all- cash dealings. Such deals help sellers evade income tax as well as registration duties.

A coffee-table take on realty

A brand book on real estate by Planman Media, STAR REALTY 2011-12 — Lords of the Land, was launched by Union Minister of Urban Development, Kamal Nath and Prof. Arindam Chaudhuri, Editor-in-Chief, Planman Media, in New Delhi recently.

The book confers the title of Star Realty to the top 50 real estate brands in the country. These 50 companies were selected based on a survey conducted across 10 cities in the country that included thousands of respondents by the Indian Council for Market Research (ICMR).

“Star Realty is a unique endeavour by the Planman Group to present the leading brands in the Indian real estate in a classic format. It is the first-of-its-kind coffee-table brand book to have chronicled real estate brands on a pan-India basis. The book is the most meticulously researched, clearly written and thoughtfully designed projects in the country.” Deepak Kaistha, CEO, Planman Media said on the occasion of the book launch.

The book highlights the growth prospects and drivers for the sector through a comprehensive industry review and analysis, and features the maestros of modern Indian architecture in a never-before-seen avatar. — TNS