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Should one buy property post-lockdown?

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Due to the COVID-19 pandemic, an economic crisis engendering high volatility in the capital markets is leading to investors losing their hard-earned money, at least for the time being. Most of the sectors have been badly affected due to the COVID-19 economic crisis

Due to the COVID-19 pandemic, an economic crisis engendering high volatility in the capital markets is leading to investors losing their hard-earned money, at least for the time being. Most of the sectors have been badly affected due to the COVID-19 economic crisis. According to analysts, property prices after have declined by two to nine per cent after March, when the lockdown first came into effect. Even though the property prices have come down, the pandemic and the resultant lockdown have put a brake on people’s aspirations of owning a house of their own.

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Among those affected are homebuyers who decided to buy a property in the new financial year by taking a home loan. But these people are now no longer sure if they would be able to afford the equated monthly investments (EMIs). Their reasons vary, ranging from layoffs, lack of business earnings to salary cuts, among others. The real estate sector has been hit by the lockdown, as construction activity all but came to a grinding halt with looming uncertainty over project completion dates.

Although the Union Finance Minister, Nirmala Sitharaman, took major steps to contain the fallout, still there are certain factors beyond her control as well, including lack of available manpower at construction sites. 

The macro-economic uncertainty coupled with job cuts has left the buyers confused. We have come up with a piece of consolidated advice for homebuyers, if they are after owning a property in the post-lockdown economic scenario.

What a homebuyer should do?

  • It would be best for the potential buyer with capital to wait for a couple of months and keep a close watch over the liquidity situation of the market.
  • “Supply chain issues, labour availability and issues of raising any form of institutional capital will have their impact on projects and development timeline. Therefore, it would be prudent for buyers to pick up units in completed projects or wait till the construction activity on the site is resumed when it comes to under-construction projects,” says Ajay Sharma, Managing Director, Valuations (India) at Colliers International.
  • It is prudent for a buyer to stick with prominent developers with a good track record with both customers and financial institutions. This will ensure safety in capital invested by them. “Given that residential pricing will be under pressure, good deals will come the buyer’s way but the timing of the buy should be prudent and not delayed in hope of more discounted pricing,” added Sharma.
  • Buyers should evaluate their financial position, both current and in the next five years. They should carefully gauge if they are ready to take on any more loan liability, especially if they are solely dependent on monthly income from jobs.
  • It would be important that they access all information from the Real Estate Regulatory Authority (RERA) sources to evaluate any buying-decision.
  • It would be better if they take professional opinions from registered RERA brokers for a property before embarking on the decision to buy a project.
  • “Buyers should closely work with their financial partner (banks or NBFCs) to obtain all information regarding the project they are evaluating,” said Sharma.
  • Also, buyers should keep a sharp eye out for interest rates and take advantage of low-interest regimes at the same time. According to Adhil Shetty, CEO, BankBazaar, “With interests at an all-time low, this is a good time to buy a house. We’re currently in a low inflation period, and there are few triggers for an interest rate spike. Therefore, with rates falling regularly, a repo-linked loan will work to the borrower’s advantage.”
  • A ready to move-in flat is more advisable to buy as compared to under-construction ones. Avoid putting your money into incomplete projects.
  • Check the builders’ detail and then go and buy ready to move-in flats. Check all RERA rules before buying a flat. “Opt for a longer tenure if possible. While this means a higher interest rate, it means smaller EMIs. You can start putting together a small kitty towards your home loan, which you can pre-pay from time to time. This will reduce the impact of your increased tenure,” adds Shetty.
  • For example, assume a loan of Rs 40 lakh at 8 per cent interest. For a 20-year loan, you will be paying an interest of Rs 40.3 lakh. For the same loan, you will have to pay an interest of Rs 65.7 lakh if the tenure is 30 years. However, a prepayment of Rs five lakh at the end of the third year will bring down the interest payable to Rs 41 lakh. Use a calculator to understand how you can prepay your loan to get maximum benefits.
  • Consider opting for a smaller house with fewer premium amenities. This will bring down the costs for now. Over time, you can upgrade to a bigger premium home.
  • With respect to any purchase decision, it is advisable to bring in financial consultant and take informed calls based on one’s ability to take liabilities.
  • If the buyer is to dispose of a property to buy a new one, it would be best to complete the deal before signing on for a new apartment. This will ensure cash flow continuity and no hard surprises.
  • It’s a common practice to monetise long-term savings like PPF to finance buying of the property, but in current times, it would be sensible to leave at least 9-12 months equivalent of monthly income in savings before buying a new property.
  • Fiscal prudence should be paramount and it will help in making the right decisions for buying property.

Pandemic affect from a buyer’s perspective:

  • There will be two types of home buyers after the lockdown period, those who have capital at hand and those who have secured job but need a home loan, says Sharma.
  • The former will look for properties that are complete and compliant from all perspectives as it would be a safe investment though buy-in price may not be much discounted.
  • Investors will have to look at buying for the appreciation of capital value with low consideration for yields that are already very low
  • The push of government for rental housing might see investment into residential units. Potential buyers could be at an advantage in view of the financial sops that could result in decent returns. 
  • Buyers will need to carefully assess two risks- liability risk and property risk. Liability risk will entail the loan taking ability and servicing ability in light of macro-economic issues.
  • Property risks will entail the development stage, progress, solvency of the developer and the ability to complete the project. A delay in raising capital and progress in work will spill over into liability risk and buyers will carefully look at de-risking themselves.
  • Buyers’ cautious approach will defer their buying and preference shift depending on the pricing of the units. Both buyer types will expect discounts from developers and push for box prices that could land them a good deal. “A fair amount of paperwork and verification are also involved. So, also utilise this time to keep these ready, says Shetty.

Things to keep in mind post-COVID-19 lockdown:

  • It is important that a potential buyer of residential real estate have their PPEs on at all times when going for on-site inspection.
  • It is best to wear gloves and avoid touching surfaces to minimise transmission risks.
  • It would be advisable to carry out all documentation online.
  • With respect to any purchase decision, it is advisable to bring in a financial consultant and take informed calls based on one’s ability to take liabilities. “If the buyer is to dispose a property to buy new one, it would be best to complete the deal before signing on for a new apartment. This will ensure cash flow continuity and no hard surprises,” says Sharma.
  • It is a common practice to monetise long term savings like PPF to finance buying of property but in current times it would be sensible to leave at least 9-12 months equivalent of monthly income in savings.
  • Fiscal prudence should be paramount and it will help in making the right decision for buying property.
  • Make sure you have a good credit score. Check there are no misses and pay special attention to ensure that you pay your bills on time in full.
  • There will be a certain amount of credit tightening, and a good credit score can go a long way in ensuring that you get a good deal on your loan.
  • Increase your emergency fund, so that it covers six months to an year of salary as a security. This will ensure you have more funds at hand in case of an emergency. This also gives you sufficient time to get another job in case of a job loss.
  • Read and understand all the property-related documents before you finalise your purchase. Take legal help if required. This will save you heartache in the future.
  • It would be anywhere between a couple of weeks to a couple of months before you can actually go ahead with the purchase. Take this time to understand how home loans work, especially external benchmark-linked ones.
  • Different banks have different loan qualification criteria such as the borrower’s age, job profile, employment stability, credit history and others. Use calculators and eligibility charts to understand your eligibility with a particular lender to avail the best possible offers.
  • Lenders set terms and conditions pertaining to the repayment of home loans. So, you need to clarify the terms related to settlement/foreclosing the outstanding amount, transferring the balance to another lender’s account, pre-paying a part or full amount of home loan before finalising a lender.

Entrepreneurs

Rising with Ras Al Khaimah Cement: 26 Years of Innovation and Sustainability

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Ras Al Khaimah Cement Company has grown into a leading player in the construction sector of the UAE. Over the 26 years since its inception, Ras Al Khaimah Cement Company has managed to remain as a respected cement producer that has significantly contributed towards the development of the UAE and the broader region within the Middle East.

The main reason for the success of RAKCC is its strategic location in Ras Al Khaimah, which makes it easy to gain access to high-quality raw materials, and the fact that the Emirates of Ras Al Khaimah have a lot of limestone-which is one of the products most needed in cement production. Acquisition of raw materials within the region leads to a minimal risk of causing harm from environmental damage due to transport and the guarantee of better quality products. RAKCC can enjoy proximity to Saqr Port. The company could quickly and easily load vessels up to 40,000 dwt, on which exportation of cement to international markets is eased. The task of handling voluminous shipments within a minimum time frame has simply propelled the company to become one of the leading suppliers in the GCC region and elsewhere.

RAKCC was a plant based on the best technology back then to ensure cement to be of the international finest class. The pursuit of state-of-the-art technology leads its activities to date. Of raw material processing, from start to finish, each step to the final stages of production is carefully controlled for consistency and quality of the final product produced. Such dedication to excellence has helped Ras Al Khaimah Cement Company establish long-term relationships with its customers, who are mostly reliant on the company for quality, dependable cement for use in any construction projects. From infrastructure and residential to commercial developments, RAKCC cement products have become synonymous with strength and durability.

The greatest achievement of Ras Al Khaimah Cement Company is customer satisfaction, where the company creates a mutually beneficial partnership with clients through quality products delivered at the right time. The approach of its customer-centric focus towards its customers has made RAKCC a dependable company, which is now on top of the list for many contractors and construction companies in the UAE as well as the whole GCC region.

Management and employees share the same close contact with their clients to understand their needs and give them solutions tailored to their requirements. The whole idea behind this form of cooperation is it creates trust and leads to long-term relationships, which in turn continues to add growth in a company’s success and longevity. Ras Al Khaimah Cement Company also commits to environmental mitigation. The company invested on various initiatives that will make it go green and will ensure that the operations of the plant are environmentally sustainable. These include the modern technologies in the reduction of emissions and wastes, and conservations of water and energy on the production process.

RAKCC also takes its responsibility to the surrounding communities very seriously. The company works to protect the environment in Ras Al Khaimah by strictly adhering to environmental regulations and continuously improving its process to reduce its carbon footprint. With such initiatives, RAKCC aims at being a model to other companies in the region that one can balance industrial growth with concern for the environment.

Ras Al Khaimah Cement Company has been playing a pivotal role in the development of the UAE for the past 26 years through superior cement quality that has assisted in shaping the modern landscape of the nation. RAKCC focuses on achieving technological innovations, customer satisfaction, and environmental sustainability. Ras Al Khaimah Cement Company is more than just a cement producer-it’s an integral partner that will guarantee steady growth in the economy of the UAE. RAKCC is poised as it goes forward into the future, building on a legacy of quality and excellence prepared to face the challenges of tomorrow.

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Strengthening Insurance Through Partnership: Arig’s Impact on Afro-Asia’s Markets

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Arig, as a specialist reinsurer in the Afro-Asia region, has over 36 years of honing that craft. As a trusted partner with an intimate understanding of the dynamic regional economy, Arig brings much more than security. It brings much-needed knowledge, commitment, and local know-how into the support of your growth. Arig delivers a unique level of understanding of risks in the Afro-Asia region, varying in countries with emerging economies, different regulatory regimes, and specific forms of risks. This reinsurer is relatively conversant with the risks involved with these countries and hence truly satisfies the needs of those operating in such markets. With this proactive nature, Arig can serve up custom reinsurance solutions that fit the dynamic nature of the respective economies.

Launched in 1980 and based in the kingdom of Bahrain, Arig has transformed itself not only as a regional leader but also as a truly global brand name in the field of reinsurance. Listed on both the Bahrain and Dubai stock exchanges, Arig boasts more than 6,000 institutional and private investors, signifying full backing and sound financial security to qualify as a reliable reinsurer. Among the foundations of sound security, customer-centric service, and in-depth market expertise, it has built up the reputation of the company. What stands out for Arig apart from its contemporaries is the particularity concerning how it addresses a client’s specific needs. The company provides reinsurance products with wide choices that ensure flexibility and adaptability on its side to let insurers be well-equipped to respond effectively to market demands. Whether it is property, liability, motor, or marine, Arig’s solutions are built with the insurers in mind – to help them grow and win within the ever-changing landscape.

Arig’s people are product specialists and experts in technical fields as well as deep indigenous knowledge of the regional markets of Africa and Asia, making the company uniquely positioned to add real value to clients with predictive market change signals. From regulatory movements to economic developments, the team of Arig collaborates closely with clients to help them prepare well for the future. At the core of Arig’s operations is a very strong commitment to long-term partnership. Transactions are clearly not an option, but mutual trust and shared growth into the future. Clients of Arig will benefit from the fast response time and a customer-centric approach so that customers will receive support toward the fulfilment of business objectives.

In addition, Arig has a vision for the future that also includes operating with respect for the environment. With regard to sustainable business practices growing in prominence on the global scene, the reinsurance industry is no exception in this regard. The work done by Arig is aimed at ensuring that the company’s operations are modern and up-to-date with the expectations that exist when it comes to environmental stewardship, yet always maintaining the high level of service it provides.

Arig understands that no partnership is possible without good communication. A reinsurer with deep roots in the Afro-Asia region, Arig communicates in its markets, not just literally, but certainly figuratively by being conversant with the nuances surrounding culture, economics, and regulation, all of which are shaped into nuances around insurance. This kind of expertise permits Arig to offer invaluable support to insurers: support over whether it is possible to respond to local market demands confidently.

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Jumana Khan: Fashion, Fun, and Influence Across Social Media

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Jumana Khan is famous for her success as an oriental model, Dubai-based fashion blogger, and social media influencer. She is a raging tornado in the digital world, being a household name, mainly because of her fashion tips and trend-setting styles inspiring millions of followers in her 5.8 million followers on Instagram. She has bagged 9.2 million followers on TikTok where her creativity knows no bounds. There she showcases lip-syncing, dancing, and comedic sketches garnering a whopping 213.6 million likes. But her road to stardom on social media is not only a testament to entertainment; it is a path of hard work, fashion forward-thinking, and the authentic connection she has made with her fans.

Jumana Khan was an ardent fan of fashion; she went to Instagram, then sort of leaned into everything there while fostering an online presence that is now taking on a life of its own. From street-style styling to glamorous evening wear, Jumana’s effortless sense of style quickly captured the attention of fashion enthusiasts across the UAE and beyond. She can easily mix high-end pieces with affordable fashion and is making it possible for her style to reach a wide audience, giving her an enticing appeal in the world of influencers. Joining TikTok made her diversify her content on Instagram. She started making entertaining lip-sync videos and uploading dance routines and comedy clips that helped propel her into new levels of fame, making her one of the most recognizable faces around the world on the app. Her creativity defines her presence on TikTok, and with a very authentic and fun-loving personality, she has become relatable to millions of fans.

Major social media followings have not gone unnoticed by big brands. Jumana’s influence, especially within the fashion and lifestyle sectors, has led to collaboration projects with various high-profile companies. Some of her most notable partnerships include brands like Alhaji Perfumes, Oppo, Splash Fashion, and Intel. Every collaboration spotlights Jumana’s product integration, ensuring that her audience is engaged with the content but, more importantly, aligns with the brand message. It also opens up new avenues in the markets where she will expand while further proving her versatile facet as an influencer. To get more information on the latest of products, be it the latest gadget in the tech world or high-end fragrance, Jumana Khan has proven how flexible she can be and will continue to do so as a partner in demand by global brands.

In 2019, all the hard work and newfound popularity had finally led Jumana to an award-the Dubai Wow Award-for a very reputable accolade that honours those influencing agents whose works make a difference in their respective fields. This then spelled out a further stance where she is now placed as one of the top influencers in Dubai, opening doors to many more different opportunities in the niches of fashion and lifestyle. Her influence grows with every new post, video, and collaboration that pushes her into the spotlight. It is a quality of staying unique in this fast-changing world of social media, channeled through innovation and creativity in her craft.

Engaging is one of Jumana Khan’s strengths.  For she’s not just concerned with the content being focused on fashion or promoting a product. The important thing is to connect with people. And how does that get done? Her Instagram stories, for instance, are akin to another part of her writing down her every day; her TikTok videos, at the same time, fusing entertainment with style; Jumana makes the fans feel that they are part of her journey. This connection and appreciation keep driving her. Her fans are welcome to her sincerity and do not hide behind the fact that she responds to comments, messages, and questions that help her bond with the fans.  Such levels of interaction make her audience very loyal to her content.

Jumana Khan is one of the largest influencers in Dubai and continues with an unstoppable pace. Her style evolves as she introduces newer collaborations and fresh ideas to keep the users hooked with her. As social media continues to grow and trends keep on emerging, Jumana will stay ahead of the game being flexible. In a social media landscape characterized as fast-paced and where “likes” can dramatically change overnight, Jumana Khan has kept up with-and even stayed ahead of-her curve. Jumana has been taking the internet by storm with her interesting fashion blogs on Instagram and quirky lip-sync, dance, and comedy videos on TikTok and has earned millions of followers.

With over 9.2 million fans on TikTok and 5.8 million followers on Instagram, her magnetic presence, and relatable content have crowned her one of the top influencers in Dubai. Yet, it is the ability with which she can combine fashion, fun, and authenticity that makes her quite a beloved figure across platforms.

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