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Balancing home budget
Probably for the first time in the past many years, so much individual attention was being focussed on what the RBI was going to spell out in its monetary policy. And thankfully, when the apex bank released its policy in the last week of the last month, there was a sigh of relief for several individuals, who were apprehensive of yet another increase in home loan rates.
The impact of the January and March hike in CRR rates by the RBI was so severe on the existing home loan borrowers that many of them, who stretched their finances to the hilt by acquiring loans from banks to fund their dream house, are finding it difficult to balance their household budget. Therefore, the RBI’s decision not to touch interest rates has come as a breather from thousands of such persons. While there is some euphoria among a few over the RBI’s decision to reduce the risk weightage on home loans from 75 basis points (bps) to 50 bps for home loans below Rs 20
lakh, general perception is that even if the banks pass on this benefit to the customers it is too little to rejoice. “When I bought a house in
Gurgaon, the interest rate on my home loan was just 7.50 per cent, but now it is 11 per cent. To own a dream house in
Gurgaon, I took maximum loan and now it is severely hurting my family budget,” Manish
Goyal, working with a private firm said. “A 0.25 bps reduction in interest rate is not going to help me at all as there is no let off in inflation. My children school fees has gone up, prices of essential commodities are spiralling whereas there is no corresponding increase in our income,” a visibly upset Goyal says pointing that he will have to sell off his car to bridge the gap if there was any further increase in home loan rate. Poonam Gupta, a widow working with a private firm in Delhi is furious. “On one hand, the government agencies have failed to provide cheap house to the general public and on the other , it is giving a severe blow to common people, who worked their way to own a house by failing to check unprecedented increase in home loan rates.” “My EMI (equated monthly
instalment) of home loan has gone up by Rs 4,000 due to two percentage point increase in interest rate during the past six months. I had to ask my employer to stop deducting 30 per cent voluntary PF from my salary to meet the enhanced requirement,” she says, adding “in the short term one can make this kind of adjustments, but in the long-run it will have unbearable impact on the social security of the family.” Meanwhile, experts and bankers feel that this measure of the RBI will definitely ease some pressure in the short-term and in the long run if the inflation rate is tamed then RBI might take steps to ease interest rate pressure. “No doubt, the RBI’s recent move to curb inflation has translated in increased interest burden for home loan borrowers, but there is some good news for the borrowers as the reduction in risk weightage for housing loans up to Rs 20 lakh could will soften the rates between 0.25 bps and 0.50 bps,” Punjab National Bank Executive Director K. Raghuraman says. He said, his bank will soon work out the quantum that will be passed on to the borrowers of this segment. While pointing that the RBI’s stance on risk weightage will lead to marginal reduction in the interest rate on the short-term, executive director of the Oriental Bank of Commerce Allen C A Parera cautions that it is a temporary measure and the central bank can also increase it if there is no fall in inflation. However, in the long-run if inflation is tamed, there can be a fall in the home loan rates. RBI in its policy document reduced risk weight on residential housing loans to individuals for loans up to Rs 20 lakh from the existing 75 per cent to 50 per cent as a temporary measure. It will be reviewed after one year, keeping in view the default experience and other relevant factors, it said. Following the Cash Reserve Ratio (CRR) hike announced last month by the RBI, some public sector banks like the State Bank of India, Bank of Baroda and Canara Bank had raised home loan rates for all customers, including existing borrowers, when they revised their prime lending rates. However, other banks such as Allahabad Bank and Union Bank of India had refrained from raising rates for the existing home loan borrowers even while raising rates for new borrowers. Some banks such as Indian Bank did not raise rates at all, awaiting further policy directions. Private sector banking major ICICI Bank had increased home loan rates by one percentage point to 14 per cent for fixed rate loans and to 12 per cent for floating rate loans. It’s closest competitor, HDFC raised the lending rate by 0.75 percentage point for new customers and 0.50 percentage point for the older ones. According to Avneesh
Sood, Director of Eros Group, the home loan rates are high and have adversely affected the sales. “Investor sentiment has been adversely impacted by repeated monetary policy initiatives by the RBI, which has triggered unprecedented hike in home loan rates…. owning a home has become an illusion than a dream,” Sood says. “The RBI’s decision not to tinker further interest rates and reduction of risk weightage is a welcome step, but soaring interest rates have resulted in buyers thinking not twice but thrice before buying a property,” he says, adding “investors might continue to invest as they are always looking for long-term gains, while the end-users/the real buyers will still take a step backward while buying properties.” Brijesh
Bhanote, vice-president (sales and marketing) of Vipul Limited feels that the soaring interest rates have already dampened the spirits of real estate sector as it is bound to keep the investors away for a while. “The interest rates have gone up from 7.5 per cent to 11 per cent. While the end user who is buying the property for self use will still go ahead and buy, high interest rates will discourage investors as they leverage the funding and buy multiple properties with the help of mortgate loans,” Bhanote says. “It will definitely bring stability in the sector as the investor community will not be that active and the prices will appreciate at a steady rate instead of 40 to 50 per cent annually,” he says. According to real estate company Omaxe’s Chief Executive Officer Arvind
Parekh: “It (risk weightage decision) is a positive step for the housing industry.” Demand from this segment
(Rs 20 lakh and below), which has declined in the recent past due to higher interest rate and higher provisioning, is likely to get a boost, he adds.
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news ANALYSIS Builders even hint at passing on the cost cut benefit to the end users, says Ruchika M. Khanna The recent reduction in duty on cement is bound to give a fillip to the real estate sector. The cut in price of cement (by nearly Rs 7 a bag), comes at a time when growth in the real estate sector had been hit hard by the rising cost in construction and increase in interest rates on home loans by banks. The realtors welcomed the move by the Finance Minister, P. Chidambaram, as he announced that cement firms would have to pay ad-valorem duty at 12 per cent on every 50 kg of bag, costing more than Rs 190, instead of the fixed rate. This would lead to an effective reduction of up to Rs 7 per bag in excise duty liability. It may be noted that in February the government had raised the fixed duty on cement manufacturing to Rs 600 per tonne from an earlier Rs 400, prompting some firms to increase prices by Rs 10- 12 per bag. Realtors say that since cement price is a major component in the pricing of any project, the cut in prices may help them in cutting costs. Manish Uppal, managing director of Uppal Housing, says that at a time when the growth in real estate sector is showing a slump, the reduction in cost of cement is welcome. Uppal Housing already has 90 lakh square feet of area under construction and another 4.5 crore square feet of area will be under construction in the coming four years. The managing director says that they will also be able to pass some benefit of this cost reduction to their customers, in the upcoming projects. “Over the past couple of months, we have had to increase the cost of projects because of the rising costs of construction materials,” he adds. D Sachdev, director, Ansal API, welcomed the move to reduce cement costs, saying it is an important input and raw material for the real estate sector. Ansal API with an annual turnover of Rs 700 crore has major housing and retail projects coming up across the country. “The impact on costs, with the reduction of cement costs will be 10 per cent. Realtors have been badly affected because of the rising costs and they are absorbing this hike themselves. The reduction in cement prices will ease the situation and we will not have to hike the costs of our forthcoming projects,” he says. Sunil Bandha, director, ONS Developers and Promoters, who is coming up with a housing project in Zirakpur, says the move is favourable for realtors.
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Traditionally chic
Contemporary is traditional to make conventional homes look modern. In fact, interior decorators are now drawing inspirations from cultural and architectural heritage in their designs to redefine décor for meeting up-to-date tastes of people living life on the glamour lane. And they are not just replacing the straight-simple chairs and tables with a more serious and imposing rounded furniture with ample curving and gloss inspired from old-world elegance and the Victorian style. They are also recommending knick-knacks like “dented” earthen pots in metallic hues, side tables with mermaids carved out of Plaster of Paris, and electric “kerosene” lamps to light up the room, and the mood. “And then, there is wall art that includes stately mirrors, still-life paintings and family portraits in traditional frames,” says young interior designer with city-based firm, Designer Atelleir, Shikha Verma. “In vogue are picture and mirror frames that can be covered with gold leaves. Also in are tapestries. You can hang them as wall art using a dowel”. Just in case you are wondering why time-honored stuff is so fashionable, Shikha does the explaining: Traditional decorating exudes the luxury and opulence of 18th and 19th century Europe . But that’s not the only reason. Nothing attracts people more than the assurance of being taken back to their roots. For, their march towards modernism evokes a strong desire in them to look back at the pleasures left behind in their race against time. It is this “love for the past” that makes them to go in for the ethnic stuff. No wonder, you now have houses that welcome you to feel comfortable on intricately carved mahogany or marble furniture. Walk into the bedroom and you find a four-poster bed. The dining room features a large table with plenty of seating and breakfront cabinet. Decorative tacks lend charm to a sofa’s bottom edge or around a chair’s back. You also have cheerful cotton and woolen durries in shades and styles to match your room’s décor. The stuff is, in fact, pushing the concept of carpets under the rug. “The durries looks graceful and adds value to the surroundings. In fact, it can make a dull room look affluent and bright,” says Puneet of a Sector 9 store, Fab India. “But that’s just one of the reasons. The durries are manageable and easy to maintain. Unlike carpets, they attract less dust and give a neat impression of the room”. Offering additional tips, Shikha says: Traditional decorating relies essentially on classic themes, colors and fabrics to give your home a timeless look. As such, your selection of furniture should bring to the foreground a refined sense of style with an emphasis on proportion and symmetry.
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Conversion with botheration
It is not very heartening to learn that less than half a dozen industrialists received a formal clearance for work on their new projects in the Industrial Area after the Union Territory allowed conversion of trade nearly two years ago.
Only 37 had applied for conversion and a majority of project maps have not been cleared by the Department of Urban Planning. It is also worth pointing out that September 18 is the last date for applying for conversions. It has been reliably learnt that though certain buildings have been inaugurated, including Krishna Automobiles, yet the maps had not been cleared. The building of the Joshi Auto Zone was near completion when it had not received the approval on map. There is very little work witnessed on ground and a majority of the industrialists do not wish to be quoted on the issue. “Whether we are going in for conversion or not, it is unwise to speak anything against the administration”, a senior industrialist said. The sentiment was voiced by a cross-section of industrialists spoken to on the issue. The proposed buildings for conversion in the industrial area will come up with hotels, multiplexes, retail outlets and office space, besides certain other projects under consideration. Industrialists feel that single window facility created specially to handle the conversion cases had failed to live up to the intended purposes. The administration had assured that a case of conversion would not be handled in more than a fortnight. Not cleared after nearly six months, the cases are pending with the architecture department, senior town planner and the estate office. Applicants fear that they might run into huge financial losses in case of non-cooperative attitude in sanctioning the building plans. “If this is the fate at a single window, I wonder what would have happened in case we applied through the normal office. Our maps lie pending with the administration for the past more than six months,” it was pointed out. Not wishing to be quoted, another industrialist said: “When I first applied, the department pointed out the fault that lay with the size of the doors. When I went back, another objection was raised. Then suddenly we were told that the front face of the building cannot be changed for those applying for conversion in less than two-kanal plot. What point is to opt for conversion in case we cannot make outlets more attractive to a common man? Imagine what a hotel will look like with the same drab front walls.” A senior official pointed out those plots bigger than four kanals fall in the category of zoning and the applicant can go in for change in the building plans according to the set norms. Less than two kanal plots are covered in the category of ‘architectural control’ and cannot change the fronts keeping in mind the master plan. “In case changes are allowed in the architectural control in plots in less than two kanal area, we fear a similar demand can be raised by residents of the city However, there are reports of changes allowed in a less than two kanal plot belonging to a senior politician.” Industrialists feel that there is a difference between the residential area and the industrial area. Anyone opting for conversion knows that he has to make his place more attractive for customers and will like to experiment a little with the architecture. However the administration has not agreed. Reliable sources in the administration said that proceedings on clearing had gone slower ever since the irregularities in the case of Fun Republic were reported. A senior industrialist said: “The administration first of all needs to streamline single window. Senior officers are very cooperative and send the orders for compliance, immediately.”
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GRound Realty Jagvir Goyal describes how to lend strength to basic building blocks Brickwork constitutes an important part of almost every building in India. Over the ages, the brick has proved to be a time tested, durable and dependable building unit. Thieves and intruders have never found it easy to dismantle brick walls to enter a building. Therefore, brickwork proves good from security point of view also. Earlier, all load-bearing walls used to be made of bricks. Today, as more and more individuals and organisations are adopting RCC framework for their buildings, brickwork fills up the space between the beams and columns.
Soak them: Soak the bricks used in masonry work well in water. In general, water is sprinkled over the stacks of bricks just before their use. That brings no benefit. Identify the stacks to be used next day and prefer to spray water over them a day earlier in the evening. Bricks should retain moisture and look wet before being used by the masons. These bricks will not draw water from the cement mortar and cement will have more moisture available to gain full strength. If possible, a lined water tank should be created at site and bricks should be put into it. Take care that wet bricks are not stored on the ground or in mud. Put them on the platform near the masons. Sorting: Before using bricks in foundations, sort them out. Take out bricks having fine corners and faces and stack them separately. Later, put these into use while doing exposed brickwork in elevation. This one step will prove timely and add extra fineness and beauty. Use balance quantity of bricks in the foundations. Use good bond: Do the brickwork in English or Flemish bond. Flemish bond can be used as it gives better appearance but generally, English bond is preferred as it gives better progress. Mortar management: There is a general tendency among the masons to prepare the cement mortar required for half day’s brick masonry work in the morning itself and then to keep using it. At the most, a person is asked to keep turning the mortar and sprinkle water over it from time to time. This is most undesirable and shouldn’t be allowed. Such mortar loses a part of its strength by the time it is used and doesn’t provide much bond or strength to the masonry work. Take care that only that much mortar is prepared at one time which gets consumed within half an hour. At the most, dry mix of cement and sand can be kept ready but water should be added to parts of it from time to time and mortar should be prepared every half hour to have best results. Filling of frogs: The bricks have frogs at their centre. Lay them with frog upwards. At the end of the days’ work, masons fill up the left over mortar in the frogs of top course of bricks. This is not desirable. Even if you try to convince the masons not to do this, they don’t listen. Tell them strictly not to fill left over mortar in the frogs of top course. If done, this weakens the bond of the last course with the next course. Break vertical joints: While doing brick masonry, break vertical joints in brickwork. Use queen closers next to queen headers in alternate courses for doing this. See that the joints lie exactly one over another in alternate courses. Keep mortar joints 6 mm to 10 mm thick. Avoid using brickbats. Don’t raise more than 4 feet height in a day. After a passage of two hours, rake the joints by 1/2” to 3/4” to give good key to plaster or pointing. One must provide toothed ends to walls to integrate them with crossing walls to have a stronger structure. Right scaffolding: While raising the walls, use pipe scaffolds. These don’t need much support from the walls and masonry can be done without driving holes in the walls. Generally, wooden ballies are inserted in the walls while making platforms. Control the courses: It is very important to keep uniform height of all courses. For this, take a few straight edges of wood. Divide the total height up to door level in suitable number of courses and joints. Mark these courses and joints on the straight edges. These straight edges, popularly called ‘thans’ are used by the masons on two ends of each wall to keep the height of courses as uniform. If the masons avoid their use, certain height varying from 1 to 2.5 inch gets left above the door level course. Fill joints well: Take care that the vertical and horizontal joints are fully filled with cement mortar. If you observe closely, you will find that masons, caught in their speed, apply mortar to only half of the brick. Exposed brickwork: Whenever you want to provide exposed brickwork in walls, take special care. Generally outer walls carry such brickwork. Choose bricks of uniform size by sorting them out of the stacks and storing them aside. Prefer to have mechanised kiln bricks. To keep uniform thickness of each course, prepare two frames for the two ends of the wall. Keep the height of the frames equal to the lintel height and divide the height from floor level to lintel level in equal multiples of 3 to 3.25 inch and put mark on the frames for each course. Run string along the marks for every course and lay the bricks. Brickwork now obtained will look beautiful. Go ahead. Happy building! The author is working as SE (Civil), PSEB. He can be reached through www.jagvirgoyal.com
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Freehold trend catches up
The recession in the sale of the apartments notwithstanding, freehold commercial property is still plotting a success story on Chandigarh’s periphery. With the apartment culture of the metros yet to take a foothold in the periphery, freehold property — commercial and residential —continues to catch the fancy of the investors and the end-users.
In fact, the freehold property transactions are keeping the real estate market going since the onset of the recession, which virtually played havoc with big builders and investors. Even as stress weighs heavily on the minds of big players — suicide by realtor Vikas Singhal is a case in point — small builders and property dealers dealing in freehold property continue to rake in substantial amounts by way of profits and commissions. “Genuine investors and end users with spare money prefer to invest in freehold property, particularly residential plots in colonies situated in municipal limits since they offer good returns in medium term,” Dera Bassi-based property consultant Bhupinder Saini, who is yet to venture into apartment business, claims. The reasons why the freehold property remains popular with the general public are not far to seek. “Traditionally, a house is considered to be a roof over the head and this Indian mindset is yet to change,” says BL Sharma, who settled for a six-marla plot in Zirakpur after surveying “state-of-the-art” three-bedroom apartment for almost four months. And when the three-bedroom apartment is as costly as constructing a six marla house, the charm of having an independent house is doubled, he quips. Moreover, after the completion of the construction I will live in a house where, besides the house, I will also own the chat (roof), he argues. For G.S. Sohal, a retired PSU official, owning three-storeyed eight marla house in Kharar has inherent advantages. One, the first and second floors give the elderly couple enough return to pay their monthly home loan instalment. Second, having tenants gives them a sense of security as both sons are settled abroad. Property observers point out with new areas being incorporated into the municipal limits at regular intervals, there is enough land for independent plots. Though owning independent plot may be costlier in the initial stage yet its resale value is much more than that of an apartment for which finding a buyer can be an uphill task. Since the townships are bursting at seams, commercial property will always be needed to cater to different needs of the population. In fact, even for investors, commercial property gives better results, a builder says. In the recession period, persons with enough money to spare can really land good deals, he asserts. Surinder Singh, an upcoming architect, best sums up the craze for independent residential and commercial property. “You construct a house once in a lifetime and it should conform to the taste and ulility.” “Constructing a house yourself gives independence to cater to the present and plan for the future. This is possible only when you construct a house on an independent plot. Ditto for the commercial property,” he says.
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GReen HOUSE Satish Narula talks of ground cover plants that can be used for making borders Use of ground cover plants has revolutionised horticulture as never before. Such plants are called so as they cover the ground and used for overnight effects. They come handy at locations of uncertainty, for example, the outside berm of the house where you never know when the services departments will open up the land for repair, which normally is too frequent. The plants, qualifying to be referred as ground cover ones, should be the ones that provide effective cover to the surface where these are provided. Such plants are fast growing and extremely hardy. Every ground cover plant cannot, however, be used for making patterns. The ones, recommended for making designs, should be able to take repeated pruning well putting forth instant growth. They should also be free from insect and disease attacks. Any mortality in the pattern can disturb the design and spoil the efforts. Remember, a break in the design attracts the attention the most. The list of the plants that can be used for ground cover is exhaustive. You must have seen them growing on the rotaries, outside houses and even the garden, on the rockeries, under the shade trees and near the ugly spots in the garden like the sewerage cover to effectively hide them. Most of the time, however, you are not familiar with the name of the plant. The plant that has been used the most for this purpose is Duranta, with its various types — green, variegated (green with white variegation) and golden yellow. Others that can be used are iresin, lavender, ophiopogon grass, cuphea, pilea, chlorophytum (spider plant), blue bird etceteras. Gardeners are also using plants like junipers (prostate, the trailing type that spreads on the ground), various sedums, setcresia, maranta, zebrena, begonias and ferns for this purpose. There are only a few select plants like duranta, iresin (kali patti), cuphea, lavender and alternanthra that are used for designs. They are hardy and take pruning well. If properly maintained, these plants make excellent and disciplined growth. But there is a word of caution. The fresh growth in duranta, at times, is attacked by aphids during active period causing curling. You can take care of it by giving a spray with rogor, dissolved at one millilitre to a litre of water. In case of iresin, keep the growth as closely clipped to the ground as possible. It should also be given a liberal supply of water to keep it growing and fresh even during winter. Alternanthra is also sensitive to winter conditions and tends to dry. Its use should also be restricted to the minimum. Lavender is sensitive to water accumulation and can be planted in a well-ventilated porous soil. All such plants can also be used to border a bed giving curves. Do not make the mistake of raising the level too much to kill the effect of the plants in the bed, especially low growing annuals. The ground cover plants are well used for making borders, edges and perennial coverage of the area. They are well suited for rockeries and undulations too. With a little imagination you can create wonders with such plants. These are suitable for areas prone to repeated disturbances. These can be removed from the ground at a short notice and replanted for same effect within a matter of few days. Consult an expert if you are not aware about the conditions where such plants give best performance. Shade loving plants like sedums, setcresia, zebrena, ferns, begonias, chlorophytum and ophiopogon are best suited to be planted in partial shade or under full-shade conditions.
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Garrotting Greenery
Rakesh Lohumi explains how expanding concrete is choking the already shrinking green cover
Urban forests have been the main casualty of the ongoing concrete explosion in the “Queen of Hills”. The green cover is being destroyed in both visible and invisible ways. Trees are not only being axed to make way for concrete structures, they also drying up due to ecologically destructive planning and faulty design of buildings. Every inch of land is being covered with concrete, making vast stretches of hills completely impervious leaving no scope for rain and snow melt to percolate down the drying aquifers. The result is that environmentally fragile hills are being virtually starved of water, which sustains life. In such a situation, it is not surprising to see trees drying up all over the place. While the average rainfall and snow has been declining, the surface runoff has been increasing due to ever-expanding concrete cover. The British designed the structures, mostly constructed on hilltops and spurs, aesthetically, and made it a point to have sprawling lawns and green areas around them. Even the boundaries are lined with live hedges. However, after Independence, particularly during the past three decades, huge structures have come up on the slopes virtually one over the other and the builders have been allowed to cover even the mandatory setbacks with cement and concrete. The floor area ratio has been fixed at 150 per cent, which allows a maximum of two storeys and attic on a standard lot of 180 sq m. However, building laws are observed only in breach and the successive governments have come out with the retention policies to regularise illegal high-rise multi-storeyed structures with floor area ratio up to 450 per cent. The municipal authorities and the public works department replaced the cobbled drains with the cement and concrete ones long back. Of late, a new and more destructive trend has emerged. The environment-friendly dry masonry retaining walls erected during the British era are being replaced with the impervious cement masonry. The Vidhan Sabha complex is the latest example of this. Worse, in some areas these good old “breathing structures” have been replaced by reinforced concrete walls. Flowering creepers were planted in the crevices of the dry masonry walls, particularly on the Mall, but not a blade of grass grows on the cement masonry. The British preserved Mount Jakhu, the highest peak of the city, as an eco-sensitive zone and did not allow any construction on it. In fact, until 1880 when the population of the town was 16,000, numerous springs sprouting from the Jakhu hills provided water to the town. A large part of immaculate green cover on the hill has been destroyed by mushrooming concrete structures. Now the highest peak itself is under concrete assault with the Jakhu Temple committee expanding the covered area on all sides of temple, irrespective of consequences on the majestic deodars. The well by the side of the temple, on which snow was stored for summer, has vanished. The entire area has been paved with stones and made impervious. Environmentalists are worried about the trees as rain and snow are the only source of water and moisture on high hills and if there is no percolation the water table and soil moisture will go down gradually. It will ultimately affect the trees and other vegetation. Lack of moisture affects the intake of nutrients which, in turn, weakens the immune system of trees, which becomes susceptible to plant diseases. Not far off from the Jakhu peak, a number of deodar trees have dried up near the Ramchandra Chowk. Unregulated urbanisation is taking a heavy toll of urban forests but no remedial measures has been taken. While the government has taken some steps to check felling of trees, it has not taken notice of the causes leading to slow death of trees. Steps like prescribing the ratio of impervious and pervious surface under building laws, remedial steps like provision of recharging bores and encouraging landlords to maintain large green areas by giving carbon credits in the shape of discount to various municipal taxes were required immediately to save the green cover and natural water sources.
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EXTERIOR ANGLE Environment-friendly homes are the latest fad, says Devendra Malik Climate is the main factor governing design for creating comfort condition inside the buildings. Basic design approaches such as landscaping, orientation, typology, form, natural light, ventilation, building envelope etc. should be addressed at the conceptual stage so as to maximise effects. An effective utilisation of these basic design approaches will alter the micro climate of the building environment. Landscaping: Landscape elements such as water bodies, vegetation and plantation are important beyond visual effects. Water bodies, close to building, increase humidity levels and cool the natural breeze blowing in the buildings. Vegetation and plantation absorb solar radiation, shade walls and spaces and increase humidity by releasing moisture. Deciduous trees are ideal as they shed off leaves and provide required sunlight in winter. Orientation: Orientation of building plays an important role in the thermal performance of the building envelope. Orientation of the building can be such that the shortest side of the building faces the south sun, thereby ensuring solar exposure and gains thereof are reduced. Building form: The building types or form, if related to climate, help in creation of a comfortable environment. Form of building, articulation and the ratio of surface to volume also affect heat gains and cooling. The shape of a building is also important from energy point of view. Tall, slender building has a high surface area to volume ratio. Ideally a building should be compact, with a low surface area to volume ratio, since the building surface is the element through which the heat transfer occurs. Building envelope: It is composed of roofs, walls, openings, shading devices, materials of construction and finishes. Determine the amount of heat gain, heat transfer, wind and airflow. Design and construction of roof is of utmost importance, use of earthen port and hollow blocks in RCC slabs, along with cavity walls, provides a thermal mass that delays heat transfer. Alternate techniques: Heat absorbing glass is widely used to reduce solar heat gain. Using it as an outer pane of a double-glazed window so that absorbed energy can be more readily dissipated to the outside air than to the room may increase the effectiveness of the heat absorbing glass. Roof ponds act as indirect evaporative system for cooling. Shaded roof pond cool by evaporation and ceiling below is cooled by conduction. However, it will be more effective if the roof pond is cleared at night to allow direct night sky cooling. Installing air conditioner gives precise control over the temperature of environment by heating or cooling the air irrespective of the conditions outside or the season. Nowadays, a new concept of green buildings is being followed worldwide to strike a balance between natural resources and alternate techniques. Green building is sometimes known as sustainable or environmental building. The writer is a New-Delhi based interior designer. His email id is devendramalik@yahoo.co.in
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SEBI against futuristic valuation
“There should not be any disclosure of land values based on the future developed value of the land,” SEBI said in a note on IPOs by real estate companies. As of February 14, there are seven draft offer documents of real estate companies filed with SEBI. These issues are likely to raise an estimated Rs 17,400 crore from the market. “While on one hand, a string of issues by real estate companies reflects on the ability of Indian primary market to support such huge need for funds, on the other hand, it also perhaps reflects on a tendency on the part of issuers to ride on the real estate boom, thereby pointing to need for overall caution,” the note said. It was in this context, SEBI said that a need was felt for a closer scrutiny of disclosures by such companies, especially relating to land bank and its valuation. According to SEBI, disclosures by real estate companies show that there were no standards. At times, valuations include certain futuristic assumptions. While in some cases there are valuations, in some others there is no valuation. The seven applications for IPOs are DLF with a size of Rs 12,000 crore issue, Omaxe Ltd of Rs 1,200 crore, Purvankara Projects of Rs 1,200 crore, IVR Prime urban Developers Ltd with an issue size of Rs 830 crore and Housing Development and Infrastructure ltd of Rs 2,000 crore.
— PTI
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TAX tips By S.C. Vasudeva Q. One of my clients (a foreign national from France) wants to invest in India in real estate through our company. Can you suggest if it is possible and how can we do that? — Puneet Bansal A. In accordance with the provisions of the Foreign Exchange Management Act, 1999, and the Rules and Regulations made there under, a person resident outside India who has established in India, in accordance with the provisions of the rules and regulations, a branch, office or other place of business for carrying on in India any activity excluding a liaison office, may acquire an immovable property in India which is necessary for carrying on such activity. Accordingly, in my opinion it may not be possible for foreign national of France to invest in India in real estate except for the purposes as mentioned above. Capital asset
Q. We purchased 28 acres of land on the outskirts of Chandigarh in Kansal village in 1995 & made a coop house building society of 203 members and registered with PUDA. After Nayagaon became NAC, where our society is located, Tata house building company has agreed to buy the entire land on the following terms that each 500 sq yard plot holder will get in exchange: 1. One super luxury apartment of 2,250 sq feet at the same place costing 1.12 crore. 2. Rs 80 lakh through cheque. My query is: 1. What will be my (500 sq yards plot holder) tax liability? 2. How to save IT on this amount by investing this amount or buying property? This land is still agriculture land. We will get the entire amount in this financial year. Apartments will be handed over after three years to us. — Gill KS A. It has been mentioned in the query that the land is still an agricultural land. However, the question, whether such agricultural land is a capital asset within the meaning of Section 2 (14) of the Income-tax Act, 1961 (the Act), will have to be examined with reference to the notification issued by the Government of India. Since the complete details of the location of the land and distance from the municipal limits from the city has not been indicated, it is not possible to determine the coverage within the provisions cited above. For the sake of answering, your query it is presumed that the land is to be taken as a capital asset. The consideration for a plot of 500 sq yard has been indicated at a residential apartment of 2,250 sq feet valued at 1.12 crore and Rs 80 lakh by cheque. The total consideration for the transfer of the plot of 500 sq yards will thus be Rs.1,92,00,000. Out of this sale consideration, the indexed cost of 500 sq yards plot will be deducted so as to arrive at the net amount of capital gains. The figure of cost 500 sq yards of plot has not been provided in the query. The amount of capital gain and tax liability on such capital gain cannot be ascertained. In the absence of such details having not been provided in your query, it will not possible to work out the tax liability.
Taxable income
Q. Me and my wife are having salary of 4.5k pa and 1.5k pa. We are in the government job. Our retirement is due in 2016. Please suggest, is it beneficial for us to avail a house loan of 10 lakh as far as the income tax benefit is concern. Please consider the hiked rate of interest in this sector. Is it good not to avail loan but pay tax. — Harpal Singh A. Though the facts in the query do not indicate that the housing loan is to be availed for the construction/acquisition of a residential house, it is presumed that the purpose of availing the loan of Rs10 lakh is either to construct or buy a residential house. The consequent effect of availment of loan is the payment of interest thereon and the payment of instalments towards the repayment of loan. Any decision with regard to the availment will, therefore, depend upon the cash flows available with the family and the necessity for constructing or buying a residential house. These aspects being known to the family, it is not possible for any outsider to advise whether the availment of loan will be beneficial. In case the cash flows permit, it is always better to take a loan because it will enable you to seek a deduction against taxable income in respect of interest as well as in respect of instalments paid towards repayment of loan. The detailed working can be made by taking options of repayment over a period of 10, 15 or 20 years and suitability can thus be ascertained. I may add that on the basis of recent announcement made by the Governor of the Reserve Bank of India (RBI), no further hike in the rate of interest is envisaged in the near future in respect of housing loans. The writer can be
contacted at sc@scvasudeva.com |
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Market regulator SEBI is against real estate companies giving futuristic valuation of land with them in their draft prospectus for public offers, a move that could affect the fortunes of many realty firms.