$11.5 billion NRI investment coming into realty, there is money to be made

Three months back, if someone would have recommended real estate stocks, you would have thought he must be joking.

After the demonetisation drive in November, the real estate sector was left in the ruins as the worst casualty of the cash ban.


You may also be interested in section of GaramChai.com – Realtors, Real Estate, mortgage and property deals for NRIs, Indians and Indo-Americans


But you will be in for surprise if I tell you that the S&P BSE Realty index, the barometer of the real estate sector, has actually delivered 14 per cent return so far in 2017 and is up nearly 2 per cent since demonetisation.

What does it tell you? The concerns about the real estate sector are largely done with and after the mega booster dose from the Union Budget, things are looking not just rosy but attractive to make this sector a top investment bet for the year.

The Budget announcements clearly indicated that the government’s focus on improving affordability of homes will benefit end-users, which would result in significant increase in housing supply in the secondary market.

“In 2017, total NRI investment in realty in top eight cities is expected to touch $11.5 billion. This will represent 20 per cent of total market share, currently estimated at $60 billion,” KanikaBSE -5.00 % Gupta Shori, COO & Co- Founder, Square Yards, said in a report.

Read more at Economic Times 

Holy Cow: Two sides of the coin. In this case two sides of the new £5 notes with Tallow

A few months ago, Indians and South Asians in Britain,  especially vegetarian Hindus and Jains,  were irked by news that the new currency note – the £5 polymer note – introduced in England contained tallow. Tallow is a rendered form of beef or mutton fat, processed from suet, and is used in candles and soaps.

After the news broke out, Vegetarian Hindus and Vegans in general took offense and took up digital campaigns.  A petition demanding the replacement of the notes with a vegan alternative generated over 130,000 signatures. (change.org). The government and Bank of England began looking into the issue and acknowledged via Twitter that “There is a trace of tallow in the polymer pellets used in the base substrate of the polymer £5 notes” 

Image tweeted by @LabourAnimalRG

So, why is this a big deal for Hindus and Vegetarians?

The National Council of Hindu Temples, summarized the feelings of Desi community in a statement (link):

The oldest of the worlds’ great religious traditions, Hinduism is the only one that worships the Divine equally in both the masculine and feminine. Our agrarian forefathers offered the bull as a symbol of divine righteousness (the male principle), while the cow is a symbol of divine nurturing (the feminine principle). We now, centuries later, still embrace these symbols and hold them close to our hearts to remind us of the path laid out for us by these complementary forces. To handle something from a slaughtered cow would be to insult the Divine Mother, the principle of nurturing and the loving provision of nature. No aware Hindu will willingly or voluntarily do it.

All British Hindus stand at the crossroads of Shreyas and Preyas, and with every donation at a temple, or every aashirwaad given to a new married couple, or every blessing conveyed by a gift of money given to a grandchild, the choice will have to be made again and again. The next time that PM Theresa May, or other Parliamentarians, visit a Hindu temple they too will have to make this choice before contemplating making a symbolic donation, and since great importance is placed upon Indo British Trade in a post Brexit Britain, payments made in a morally, religiously and ethically tainted currency may well acquire a totally different “bhavana” sentiment.

History of Tallow and Hindus

There is a long history of Hindus and Muslims being provoked and angered by the use of animal byproducts, which the modern British leader seem to have forgotten; or wish to ignore. The key reason for “Indian Rebellion of 1857,” a.k.a the mutiny by sepoys (soldiers) of the East India Company’s army on 10 May 1857 was the use of Tallow and lard-greased cartridges. (link)

The British, probably assumed that the values and mores of Indians, especially those of Indian immigrants in the UK changed considerably in the decades since.

The other side of the Tallow note

The British Government and Bank of England began to downplay the issue and used digerati to communicate the fact that there was less than 0.00007g of Tallow per £5 note. In effect, all the banknotes in circulation combined would have less than 23kgs, half the tallow output of an average cow!  Some also argued that currency notes were an outdated concept in a digital age and this shouldn’t be a big deal.

Now comes the news that the Bank of England has refused to yield to pressure from protest groups about its use of animal-derived products in bank notes, saying that it will not pull any of the existing £5 notes from circulation and will print the £10 notes as planned.

“The Bank was not aware of the presence of animal-derived products when it signed the contract with its supplier for the £5 and £10 banknote polymer,” the Bank said in a statement last week.

“When the Bank discovered the presence of these products, its first step was to alert the public and subsequently has been treating the concerns raised by members of the public with the utmost seriousness,” it added.

What next?

Activists were disappointed by the announcement from theBank of England. “The move has disappointed the sizable but vocal Asian minority in England “The Bank keeping tallow, or beef fat, in the new fiver sends a message to vegans, as well as Hindus, Sikhs and Jains, that our values don’t matter”  summarizes an article in Guardian

Vegan and Hindu groups have promised to keep the issue alive, so this is probably not the last word on the topic.

Other links:

 

NRI investments in housing set to almost double to $11.5 billion this year from 2013 level: Report

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.


Also check out NRI Q&A: Is investing in land in India by NRIs a good and logical decision?


The Narendra Modi-led government has given a significant boost to the confidence of the non-resident Indians (NRIs), with their investment into the primary residential real estate market expected to almost double this year.

About $11.5 billion of investment by NRIs is expected to come in the new home or primary residential market across top 8 major cities in 2017, against $6 billion in 2013, according to a report by real estate transaction platform Square Yards.

“It is believed that the new change in government has infused new sense of confidence about the prospects of Indian economy,” said Kanika Gupta Shori, COO and co-founder, Square Yards.

Over 20% of NRI investment in Indian real estate comes from the United Arab Emirates (UAE), followed by other major NRI populated countries such as the USA and the Kingdom of Saudi Arabia. Other countries such as Canada, the UK, Singapore & Australia also source of substantial NRI capital inflow in Indian realty.

“A depreciating Rupee against the dollar and other currencies have added further impetus to the rise of momentum of NRI investment into the Indian real estate,” she said.

Read rest of the article on Economic Times Reality

NRI Q&A: Is investing in land in India by NRIs a good and logical decision?

Here is a question from an online forum answered by our editor.

Is investing in land in India by NRIs a good and logical decision?

I see some downfalls in it.But let somebody answer this question.

Let us break the question down into the key components: Is investing in land in India by NRIs a good and logical decision?

Investing in Land –  Like other investments in physical assets, the basic mantra holds – location, location, location.

  • A parcel of land Land in a tier-3 city, say in Sangli in Maharashtra may or may not generate the same return as in Mumbai.
  • Encroachments, squatting and land-grab are all too common. Therefore investing is land is inherently risky.

good and logical decision?

A “good” and “logical” investment takes into account risks (vs rewards). Higher the risk, greater the reward.

  • By this account, investing in Land is generally a good decision; as the old adage goes They don’t make land anymore
  • However, the regulatory system in India continues to be in a flux. And the legal system is bogged down with civil disputes, most of them involving land and property. Herein lies the risk

Bottomline: Investing in Land in India is not for the faint of heart. Invest wisely and with caution. Make sure you are able to safeguard the investment and stomach the risk.


ps: I have a personal story on investing in land and land-grab, that thankfully ended well… but will not bore you with the details.

Change.org petition: RBI, Please make it easy for NRI, OCIs to convert old rupee notes

 A note from GaramChai.com visitor prompted us to start an online petion on Change.Org
Please sign the petition and forward to your friends and others who can do so too.

Mail from visitor –
Dear GaramChai.com
Pls assist to put pressure on RBI to come to their senses
 
PIOs, NRIs feel heat of demonetisation; wait in RBI queues 
Tempers ran high outside the central bank branches as people coming from long distances were denied entry by guards on the grounds that they were not carrying the requisite documents. 
click here to read the full article on Economic Times 
 
====================================================
 
I wish to suggest that RBI allow banks to collect/deposit this small amounts of Rs25,000 only, as after all we already declared at customs & customs will update RBI & RBI can then cross reference with banks (banks to submit the forms to RBI upon receipt of the cash).
So many checks are already in place so why the fear.
RBI cannot cope with the load so be realistic and don’t hurt NRIs.
 
​Please use your influence to push RBI.
regards
Mayur Vora

NRI investment in real estate: Flexible policies are the need of the hour

The Indian government unabashedly woos the Indian diaspora to invest in various sectors in India and is considering easing norms further. Yet, the government makes Non-Resident Indians (NRIs) jump through hoops

The Indian government unabashedly woos the Indian diaspora to invest in various sectors in India and is considering easing norms further. Yet, the government makes Non-Resident Indians (NRIs) jump through hoops when it comes to investment in real estate. Finally, there is some hope. RR Singh, director general, National Real Estate Development Council (NAREDCO), says the industry body has presented a set of recommendations to the government, requesting it to ease regulations in the real estate market. While, at present, NRIs can invest only in real estate, Naredco is pushing for them to be allowed into land developments and large-scale commercial properties as well.

Such a relaxation would help generate liquidity in the real estate market, which is witnessing a slump and delayed delivery on account of subdued consumer sentiment, high debt and slow growth. There is already a high level of inventory piled up, Singh points out.

Indians investing abroad

The figures from the Dubai Land Department (DLD) show that Indians top the list of non-GCC (Gulf Cooperation Council) investors in Dubai real estate. Outside the Arab world, Indian nationals contributed the lion’s share of investments AED7 billion ($1.9 billion) from 3,656 transactions, according to the DLD. This makes them the biggest investors in Dubai real estate during the first half of 2016.

In the US realty market, Indians are the third-largest international investor community, at US$8 bn, after Canadians and Chinese, according to brokerage firm Sotheby’s International Realty. Other corridors such as the UK, Vietnam, Singapore and Australia, which have relaxed investments from foreigners, have also seen a rise in Indian investors buying properties.

What are some of the restrictions?

S.No. Restrictions applicable to foreign nationals 1 Section 6(5) of the Foreign Exchange Management Act, 1999 (FEMA) permits persons resident outside India to hold, own, transfer or invest in… any immovable property situated in India, if such… property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India. 2 A person who is resident outside India (or his successor) has been permitted to repatriate the proceeds of sale of immovable property in India only where the following conditions have been satisfied:

(a)   The sale is of an immovable property which was either owned by him when he was a resident of India or he has inherited it from a resident of India; and

(b)  Prior permission of Reserve Bank of India (RBI) has been obtained. 3 The applicable regulations under FEMA restricts foreign nationals from acquiring any immovable property in India and specific permission is required from RBI for the same, except in the following cases:

(c)  Where the foreign nationals have inherited property from a person who was resident in India.

(d)  Where the foreign nationals have leased an immovable property for a period not exceeding five years; or

(c)  When a foreign national (except a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong) becomes a resident in India as per Section 2(v) of FEMA. Such a foreign national is also required to satisfy the conditions regarding period of stay, and the type of visa granted should clearly indicate the intention to stay in India for an uncertain period to determine his residential status. 4 Foreign nationals require specific approval of RBI for transferring any immovable property in India and are allowed to transfer only when the immovable property is either:

(a)  Acquired by way of inheritance and with specific approval from RBI; or (b) Was purchased with specific approval from RBI   5 Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong (‘Restricted Countries’) are not allowed to acquire or transfer immovable property in India without prior permission of the RBI, except when they lease an immovable property for a period not exceeding five years. Indian developers have started realising the investment potential of NRIs and are actively showcasing their property portfolios at exhibitions abroad and simultaneously demanding a relaxation in policies. Experts believe that certain flexibility in relation to acquisition and transfer of immovable property by NRIs is required.

Provide renewable leases: It has been recommended that foreign investments through acquisition of immovable property should generally be allowed and should only be subject to land title agreement and renewable ownership leases. Acquisition of land development/plotted development: A number of developers have come up with villa properties. “Regulations should provide approval for plotted developments and properties such as bungalows, semi-detached and terrace houses,” says a Delhi-based developer and member of the Confederation of Real Estate Developers’ Association of India (CREDAI), requesting anonymity.

Measure to check price speculation: He suggests that to check price speculation, there should be a check on stamp duty payment. The differential treatment to ‘citizens of restricted countries’ from the perspective of acquisition of immovable property should be relaxed to the maximum extent possible. If required, these can be periodically re-evaluated and amendments made.

The restrictions noted above have adversely impacted foreign investments in India while countries like the UAE, Singapore and Mauritius have increased their inflow of investment by liberalising the restrictions applicable to immovable properties. A relaxation in policies will not only stop speculation in the Indian property market but also infuse much-needed liquidity in the market.

Current market conditions for NRIs NRIs prefer other countries over India to invest in real estate.

Developers ask Indian government to ease restrictions on NRI investment in India. Industry body submits recommendations to central government. Permission to allow NRI investment in land developments and commercial properties sought.

By: Housing.com/news Read more at: moneycontrol.com

Bank in Kodaikanal refuses NRI’s deposit on ‘security concern’

Madurai: In a shocking incident, the branch manager of a nationalised bank in Kodaikanal gave a written statement to a Non-Resident Indian (NRI) that he could not accept a cash deposit of Rs. 1.5 lakh owing to “security concerns”.


Check out Garamchai.com’s FAQ on the topic: Indian Government’s decision to do away with 500, 1000 RUPEE NOTES! Impact on NRIs from Garamchai.Com

Also refer to earlier blogs on the topic:


The NRI, Albert Fernando, has an account with the bank in Tallakulam branch in Madurai. “I have been doing construction work in Kodaikanal with the money I withdrew from Tallakulam branch in Madurai. However, Rs. 1.5 lakh remained with me when demonetisation of Rs. 500 and Rs. 1,000 notes was announced,” Mr. Albert said.

In an unexpected development, his friend in Chennai fell sick and he had to rush there to attend to him. However, since the money in hand was in the denomination of Rs. 1,000 and Rs. 500, he wanted to deposit it in Vadakaunchi branch of the bank in Kodaikanal.

When he handed over the pay-in slip along with the cash on November 16, the cashier asked Mr. Albert to meet the Manager.

The Manager told him that he could not repay the huge money in smaller denominations immediately, though Mr. Albert clarified that he only wanted to deposit the money.

“I had to travel a lot and did not have time to go back to Madurai to deposit it at Tallakulam branch. I also had apprehension about its safety in carrying it along with me,” he said.

“The bank officials asked for my PAN card which I produced. After a brief chat with the cashier, the Manager said that there was a burglary in the branch a few months back and refused to take the money citing safety concern,” Mr. Albert said.

However, when Mr. Albert insisted on a proper reply, the Manager gave that in writing on the pay-in slip.

Mr. Fernando said that the Manager was only shirking the responsibility of accepting the remittance of Rs. 1.5 lakh, when the Union Government had allowed deposits up to Rs. 2.5 lakh account holders’ accounts.

“If the bank had such a serious compromise on its safety, how are other deposits kept in the branch?” he asked. He lodged a complaint with the bank officials in Madurai.

Article from The Hindu

Hyderabad man saves NRI land, asks him to adopt village

A Good Samaritan in the city has got an NRI tycoon Deepak Kant Vyas, founder of Redberri Global Corp., St. Louis, to adopt a village near Bibinagar in Yadadri district.


You may also be interested in GaramChai Real Estate section   and Return to India Musings: when a home becomes a golden egg


When the Samaritan noticed that someone was grabbing a 24-acre land belonging to Mr Vyas, he Googled the tycoon and mailed him an alert. The gang had created fake documents and was trying to dispose of the land.
Mr Vyas, who had never returned to his native village in Bibinagar, met minister K.T. Rama Rao when he was in Chicago, and complained to him. On the minister’s directions, revenue and Cyberabad police officials arrested 10 members of the gang. Mr Vyas offered a reward to the Samaritan but he refused the money and asked him to provide health and education facilities by adopting the village. In October, Mr Vyas met Mr Rama Rao in Chicago and submitted a memorandum. Following this, the minister directed revenue and police department to launch a search operation in Bibinagar. Special teams were formed by Rachakonda Commissionerate.

Realtors faked NRI land papers
Police commissioner Mahesh M. Bhagwath said, “The plan was to encroach on the land to the extent of 24 acres, it involved forgery, fabrication of revenue records, creation of fake Aadhaar card by nearly 21 persons in Survey No. 567,569,583 of Raghavapuram (v) Bibinagar (m) Yadadri district.”

He said Mr Vyas had not seen the land for 15 years. “Noticing this situation, one Korni Mahesh, a real estate businessman, and 20 others created fake documents, passbooks, and even rubber stamps with the designation of the mandal revenue officer and the revenue divisional officer,” Mr Bhagwath said.

“The role of the sub-registrar will be ascertained after a thorough verification of the records. The police on December 15 arrested 15 members of the gang and six are absconding,” he said.

After the operation ended, Mr Vyas thanked the city resident and offered to help him. The Samaritan turned the offer down and instead urged him to adopt Bibinagar to strengthen its health and educational facilities. The NRI is in talks about the adoption.

Minister K.T. Rama Rao said, “Public is requested to go for registration of any particular piece of land or plot or a house with proper documents containing link documents, government fee receipts, encumbrance certificate and the original certificate of the revenue department. Without proper link documents public should not go for registration of any property.”

Repost from Deccan Chronicle

What should the Indians abroad in possession of ₹500 and ₹1000 notes do if they are not returning till 31 Mar 2017?

Question being asked by a lot of NRIs abroad: I am an Indian living abroad having a ₹500 note and some friends of mine have some ₹500 and ₹1000 notes with them. What should we do with these notes if we do not plan to visit India within the specified time for exchanging the notes?


Check out Garamchai.com’s FAQ on the topic: Indian Government’s decision to do away with 500, 1000 RUPEE NOTES! Impact on NRIs from Garamchai.Com

Also refer to earlier blogs on the topic:


First things first. What will NOT work

  • Panicking about this is not going to help. Unless you have stashed away hundreds of thousands of rupees in 500 and 1000 rupee notes in your bedroom or bank locker overseas, there is no reason to panic.
  • If you had a lot – hundreds of thousands – of currency notes with you while traveling overseas, ask yourself:Has the money had already been taxed in India? If yes, just hold on to the currency till your next trip back to India and follow RBI guidelines (check out Indian Governemtn statement )On the other hand, If the money had not been taxed, or it was a “cash payment” you received, ask yourself if you should just count your losses and walk http://away.As per RBI regulations, Foreigners and Indians are not legallyallowed to carry any Indian notes with them.Although the rule, which is part of Foreign Exchange Management Act (FEMA), has been in place for quite sometime now, it is only now that the central bank is trying to enforce it.If you walk into an Indian Embassy or Consulate overseas with a suitcase full of 500 or 1000 rupee notes, you could be in trouble!
  • Branches of “Indian” banks like State Bank of India, ICICI and other banks in the US and Canada operate as local banks. They are not authorized to operate your “Indian” NRI or NRO accounts. Therefore, they will not take your 500 or 1000 rupee notes for deposit.
  • Currency exchange ( money-exchange ) outlets in foreign countries may NOT accept the old 500 or 1000 rupee notes. There are already accounts in media that commercial money exchange outlets overseas have reportedly refused to accept the old 500 and 1000 notes.

Here are a few facts and practical tips for NRIs, left with “some” Indian currency in hand:

  1. Carry the cash with you to India: According to a press release by India’s Ministry of Finance, individuals can exchange the old notes till December 30, 2016.
  2. If you have some money left back in India, you could authorize another person in India to deposit the notes: According to RBI guidelines, if you have old banknotes in India, others may be authorized to deposit the notes into your Non-Resident Ordinary (NRO) or Non-Resident External (NRE) bank account. The authorized person should go to the bank branch with the old banknotes and authorization letter from you. He or she should also carry a valid Indian identity proof
  3. Send the rupees back to India with someone you trust. If the person is traveling before end of 2016, he or she can deposit it into your account (similar to step 2)

Q&A : I have a good idea for a startup. I am trying to develop it myself. But how can I make sure that no one will copy my website idea?

Here is an interesting question on an online forum, and the response from our Editor:

I have a good idea for a startup. I am trying to develop it myself. But how can i make sure that no one will copy my website idea and build a better website of the same idea?

Will copyrighting helps in doing this? Also, When i finish publishing this website, how can i deliver it to the public?

I think you are looking at the wrong end of the stick. Your focus should be more on your idea and less about someone copying it. The tech world is full of ideas copied over and over, but more than copying, execution is the key.

Back in 1999 during the first dot .com era, I started a portal: Garamchai.Com … for the desi in pardes

The idea was fairly successful and enjoyed organic growth. The business model was rather simple -by current eCommerce standards – although the idea was cash-flow positive from day one! Why?

Because content is king, and we had unique content that visitors and users valued.

Fast forward 5–6 years. Other entrepreneurs and web-developers looking for content realized it was easy to plagiarize content from Garamchai.Com and some began copying content from our listings. We went after them and issued warnings and legal notices. A few websites removed content but like weeds in a farm, others would reappear within weeks and copy the content, and the cycle continued. So, what are the lessons here:

  • Can anyone copy your unique idea? Sure… but think of how your idea stands out from others
  • Content, especially unique content presented in a timely way is still valued
  • One can try to minimize plagiarism but it requires continual time and resources to go after every single person or website copying. Learn to draw the line and focus on the core
  • Copyrighting unique content may help. However, protecting a copyright also requires $$s (lawyers, notices etc)

Second part of your question is interesting – how can I deliver it to the public? –

  • You need to publish the website and based on your budget, plan for a social media campaign
  • Do you have an existing social media network – facebook, twitter followers etc – leverage these by publicizing the idea
  • Are you engaged in other forums? Leverage that network