Residential housing sales up 83% in Apr-Jun in seven cities

7/9/2021 10:47:00 AM

Residential sales in Q2 (April-June) 2021 increased by 83% as compared to Q2 2020, across the top seven cities. According to JLL's Residential Market Update - Q2 2021, released on Tuesday, July 6 sales were driven by the low base effect, less stringent lockdowns, and accelerating vaccination drives during Q2 2021, demonstrating improved resilience in the market. By comparison, in Q1 2021, sales of residential units continued an upward trajectory, increasing by 17% on a sequential basis. During the first wave of COVID-19, residential sales dropped by a record 61% quarter-on-quarter to 10,753 units in Q2 2020. However, the impact of the second wave has been limited with sales in Q2 2021 dipping by 23% to 19,635 units. Sales of more than 45,000 residential units were recorded in H1 2021 as against 38,204 units in H1 2020, an increase of 18% YoY. The sustained levels of residential sales present clear signs of demand and buyer confidence coming back to the market. The need for secured tangible assets and aspirations to own larger homes as remote working becomes the new norm is driving sales of residential properties across the country. Siva Krishnan, Head - Residential, India, JLL said: "Development focus on mid and affordable segments continued in H1 2021 with 72% of the new launches in the sub Rs 10 million category. Moving ahead, while the focus on these price segments is expected to continue, developers are likely to consider new launches of larger-sized apartments in order to capture changing consumer preferences." Mumbai has consistently been the largest contributor to sales over the past five quarters. In H1 2021, Mumbai accounted for 26% of the total sales. Furthermore, Delhi NCR, Pune, and Hyderabad followed, each contributing 15% or more. Samantak Das, Chief Economist and Head Research & REIS, India, JLL said: "The residential sector displayed improved resilience in Q2 2021 when compared to Q1 2021. There is no denying the fact that the second COVID-19 wave dented the market following a good recovery curve." "However, the impact was muted when compared to the same period last year. Most of the changes observed in the sector have been structural in nature and demand for homes is only expected to increase." If the downward trajectory in COVID-19 cases is sustained, the sector is expected to make a healthy recovery in the second half of 2021, he added. Source: The News Minute INDIA

Housing sales rise by 23% in the first 5 months of 2021: Report

7/5/2021 11:12:00 AM

Housing sales rose by 23% across the top 7 cities in India in the first five months of 2021 to 1,32,818 units versus 1,08,199 units in the first five months of 2020. Housing sales rose by 23% across the top 7 cities in India in the first five months of 2021 to 1,32,818 units versus 1,08,199 units in the first five months of 2020, and a majority of the sales happened till April 15, according to a report released by PropEquity. As per the report, Bengaluru, Chennai, Hyderabad, MMR and Pune are the cities where home sales witnessed a growth in the first five months of 2021 versus the first five months of 2020 at 16%, 40%, 39%, 29% and 34%, respectively. Only Kolkata and NCR witnessed a downfall of 11% and 20%, respectively, in the housing sales during the same period. Sales in NCR were greatly impacted as the National Capital faced a major brunt of the second COVID wave in which the city went to a standstill to tackle the health emergency. This was followed by a stringent lockdown, further impacting the housing sales. The new supply or launches of housing units decreased by 24% in the same period to 86,746 units from 1,13,699 units as developers were clearing the earlier stock, resizing home offerings and waiting for the economy to improve. Chennai and NCR are the cities where new launches witnessed a growth in the first five months of 2021 versus the first five months of 2020 at 20% and 50%, respectively, whereas Bengaluru, Hyderabad, Kolkata, MMR and Pune witnessed a downfall of 35%, 28%, 28%, 31% & 23%, respectively, in home sales during the same period. Commenting on the same, Samir Jasuja, founder and managing director at PropEquity, said, “India witnessed the worst COVID wave in the months of April and May, which drastically stopped almost all real estate activities across the major cities. Fortunately, the worst is behind us as the infection and COVID-related deaths have fallen significantly, leading the major cities to relax Covid-related restrictions. The vaccination drive has also picked up pace and hopefully there will be limited impact from the third wave. We expect home sales to bounce back faster as the COVID recovery has been at a rapid pace.” “2020 was a difficult year for the real estate sector in India. This year, however, began with a solid recovery across segments and markets, but the sudden COVID wave again impacted the momentum due to the lockdown. As restrictions lifted around the beginning of June, we are now again witnessing housing sales, new launches and businesses in general slowly getting back on track. We expect sales to further improve going ahead in the next quarter for projects that are being offered by fundamentally strong developers,” said Ankush Kaul, President (Sales & Marketing), Ambience Group. Cities Snapshot: # Bengaluru: India’s IT capital saw a rise of 16% in home sales in Jan to May 2021 at 15,364. New Launches decreased by 35% at 10,849 units. # Chennai: Chennai saw a 40% increase in home sales in the first five months of 2021 at 6,518 and new launches increased by 20% to 5,338 units. # Hyderabad: Home sales witnessed an increase of 39% in Jan-May 2021 at 14,959 units while new launches fell by 28% to 11630 units. # Kolkata: Surprisingly, Kolkata saw a decrease of 11% in home sales in the first five months of 2021 at 4,673 units with new launches falling by 28% to 2,391 units. # MMR: The City of Dreams saw an increase of 29% in home sales in the first five months of 2021 at 51,040 units, whereas new launches fell by 31% to 30,290 units. # NCR: NCR saw a decrease of 20% in home sales in the first five months of 2021 at 9,106 units with new launches increasing by 50% to 7,815 units. # Pune: Pune witnessed a rise of 34% in sales or absorption and a downfall of 23% in new launches at 18,433 units in the first five months of 2021. Source: Financial Express INDIA

Premium home launches at 36% in Q2 2021, affordable housing share dips to 20%: ANAROCK

7/3/2021 11:31:00 AM

The new launch trends in both the pre and post COVID-19 periods across the top 7 cities indicate that the new affordable supply share has been reducing post the pandemic. The pandemic has significantly altered previously dominant trends in the Indian residential market. Notably, it has dented the overall new affordable housing supply share across the top 7 cities. Latest ANAROCK research indicates that out of the total new launches of approx. 36,260 units across the top 7 cities in Q2 2021, the affordable segment (priced <INR 40 lakh) contributed a mere 20% share (approx. 7,230 units), while the premium segment had the highest share of 36% and the mid segment had a 32% share. Commenting on the same, Anuj Puri, Chairman, ANAROCK Property Consultants, said, “The premium segment (priced between INR 80 lakh to INR 1.5 crore) had the highest launch share of 36% (approx. 13,130 units), followed closely by the mid-segment with a 32% share (approx. 11,760 units).” “The main Southern cities of Hyderabad, Bengaluru and Chennai together accounted for at least 72% of the total new premium supply in the second quarter. Prominent realty hotspots NCR and MMR had the highest share of affordable housing supply at 52% of a total of 7,230 units launched in this category,” he added. The new launch trends in both the pre and post COVID-19 periods across the top 7 cities indicate that the new affordable supply share has been reducing post the pandemic. # In 2018, out of approx. 1.95 lakh units launched in the top 7 cities, affordable housing had the highest share at 40%, followed by 36% in the INR 40-80 lakh budget category and 16% in the premium segment. # Likewise, of the total 2.37 lakh units launched in 2019, the affordable segment accounted for a 40% share, followed by the mid-segment with a 33% share and the premium category with a 16% share. # However, in 2020, of the total 1.28 lakh units launched in the top 7 cities, the affordable segment’s share reduced to 30%. The mid-segment had the highest share in 2020 at 40%, while the premium category saw its share increase to 21%. The dramatic drop in affordable housing’s new launch share was profound from Q2 2020 onwards – the period since the pandemic. # In H1 2021, affordable housing’s share of new launches dropped further to approx. 26% of 98,380 units launched between January and June. The mid-segment had the highest share at 39% while the premium housing segment had a 25% share. Further quarterly trend analysis reveals that in Q1 2021, the affordable housing supply share was at 30% while in Q2 2021, it dropped to just 20%. Factors Impacting Affordable Housing Supply Notwithstanding the incumbent government’s continued focus on affordable housing, private players have changed their strategy on the back of the new pandemic realities. Various factors could be responsible for the drop in affordable housing’s supply share drop: # Abundant new affordable supply was launched in the top 7 cities after the government began incentivizing this segment post-2014 to back the ‘Housing for all by 2022’ scheme. Demand for affordable housing remains high, but there is now a pileup of unsold stock across cities. As per ANAROCK data, of a total of 6.54 lakh unsold units in the top 7 cities as of Q2 2021-end, the affordable segment has the highest share at 33%. # The target audience of the affordable segment (many employed in MSMEs) has been severely impacted by the pandemic in contrast to premium and luxury category buyers. Many affordable housing buyers have had to defer purchase decisions. # Affordable housing developers’ profit margins are wafer-thin. Amid rising inflationary trends of basic input costs (cement, steel, labour, etc.), it has become difficult for them to launch budget homes since increasing prices in this highly cost-sensitive segment is inadvisable at this time. Also, overall sales volumes have declined in the last one year because of the pandemic. # Home loan eligibility for many affordable housing buyers has been impacted by the pandemic due to loss of jobs and many MSMEs being shut down – resulting in significantly lower sales in this category. Source: Financial Express INDIA

Factors Affecting Millennial’s Home Loan Decisions

7/2/2021 11:26:00 AM

Loan-to-value emerged as the biggest determinant for millennial homebuyers while deciding on a lender for buying their first home, a survey by revealed. It added that other factors that impact millennial homebuyers’ decisions regarding home loans are interest rates, job stability, flexibility of repayment options, and bank policies. The survey included responses from over 1200 homebuyers. As more and more companies have become accustomed to employees working from home and many of them have adopted the hybrid model, millennials are closer than ever to realising the importance of owning a home, the real estate platform said in a statement. “Millennials now make up 63 per cent of the homebuyers, up from 49 per cent a year ago,” it said. According to the survey report, LTV (Loan-to-Value) and foreclosure charges are the most critical factors for deciding the lender bank for home loans. “A higher LTV reduces the down payment amount and lowers (and in some cases nullifies) the foreclosure charges allowing the homebuyer the freedom to repay and finish off the loans earlier than the loan tenure. Historically, it is seen that most people end up repaying the loan amount within 8 years (less than the tenure amount),” said. Loan-to-Value (LTV) refers to the ratio of loan amount and value of the property. The higher the LTV, the higher is the percentage of the loan amount. This means the lower percent of down-payment is required to be shelled out by the buyer. Another way to understand the advantage of higher LTV is that, for the same amount of money that buyer has to make down- payment, higher LTV allows the buyer to buy a bigger/higher-budget house. Millennials prefer this since it allows them to buy a house of their choice with their comparatively modest savings. The survey also revealed that a home loan tenure of 10-15 years is the most preferred by 31 per cent of respondents, followed by 24 per cent respondents preferring tenure of more than 10 years. About 65 per cent of these millennials are in IT services while the rest are either self-employed or in government services. “In terms of tenure of loan, millennials' preference for the tenure of 10-15 years is driven primarily by two factors: EMI to income ratio and interest payment on the loan amount. Longer tenure means lower absolute EMI for the homebuyers making it more affordable to millennials and gives them the flexibility to maintain a good lifestyle without sacrificing too much in EMIs,” the survey found out. Amit Agarwal, CEO, and Co-Founder of said the average age of buying a property has reduced and more and more millennials are buying their first homes. “They prefer an LTV on the higher side as it enhances the overall ticket size of the purchase. This is the reason that higher LTV has emerged as the most important factor for millennials in terms of choosing the home loan providers, apart from interest rate. Even if the loan tenure is for 15-20 or 30 years, most people end up paying off much sooner than the tenure. But as they are sensitive about foreclosure charges and EMIs eat into their current expenditures, they prefer a longer tenure to be able to enjoy a better lifestyle. Since they are early on in their careers, with salary increments, they are able to repay their loans faster than the chosen tenure. Therefore, good foreclosure terms are what they look for,” he said. Source: Outlook Money India

PMAY Urban delivered 50 lakh homes to beneficiaries in 5 years, says Hardeep Singh Puri

6/28/2021 10:30:00 AM

In line with the objective of Housing for All 2022, the government’s Pradhan Mantri Awas Yojana-Urban (PMAY-U) has so far sanctioned around 1.13 crore houses for its beneficiaries, out of which over 83 lakh houses are grounded and around 50 lakhs have been completed and delivered to beneficiaries, said Hardeep Singh Puri, Minister of Housing & Urban Affairs. The houses sanctioned so far under this mission involve an investment of Rs 7.35 lakh crore with central government assistance of Rs 1.81 lakh crore. As of now, over Rs 1 lakh crore of central assistance has already been released. “JNNURM (Jawaharlal Nehru National Urban Renewal Mission of previous government) had delivered 8 lakh homes in 10 years and we have already delivered over 6 times and this will continue to grow,” Puri said. “In few months we will be able to turn around and say that we have delivered 1.13 crore houses through four different verticals and that is a fantastic achievement.” Puri attributed the success of the mission to its robust financial model including Direct Benefit Transfer, use of information technology for real time monitoring and technological innovation, additional funding through extra budgetary resources over and above budgetary allocations. For sustained funding support to keep the pace of construction activities, over and above budgetary support, a corpus of Rs 60,000 crore was mobilized under National Urban Housing Fund (NUHF) wherein Rs 43,000 Cr has already been drawn. Affordable Housing Fund of Rs 20,000 crore are also being utilized in the last 3 years. Affordable Rental Housing Complexes The government’s Affordable Rental Housing Complexes (ARHCs) scheme under Pradhan Mantri Awas Yojana - Urban (PMAY- U) has received robust responses with proposals for over 80,000 ARHC from public and private entities in 17 states and union territories (UTs). Under the model 1 of this scheme, a total of 2,588 houses have been made operational in Chandigarh and Surat and request for proposals are issued for 6,649 houses across other States. In response to the reverse migration following the Covid19 outbreak last year, the Union cabinet had approved the ARHCs scheme to provide budget rental accommodation to poor and migrant workers in urban areas. This is estimated to benefit more than 350,000 people. Under the first model of this scheme, existing vacant government-funded housing complexes will be converted into ARHCs, and offered to concessionaires for 25 years to rent out, while through the second model, special incentives will be offered to private and public entities to develop such housing complexes on their own available vacant land. In the second round of this scheme, expression of interest has been issued for shortlisting of additional entities with the last date as June 30. Investment under ARHCs is expected to create 11.74 crore person days of employment with 3.89 crore direct and 7.84 crore indirect in nature. In terms of jobs, it works out to be a total of 4.19 1akh with 1.39 lakh direct and 2.80 lakh indirect jobs. Puri was speaking at a virtual event organised by the Ministry of Housing and Urban Affairs (MoHUA) to commemorate 6 years of the three urban missions including Smart Cities Mission (SCM), Atal Mission for Urban Rejuvenation and Urban Transformation (AMRUT) and Pradhan Mantri Awas Yojana-Urban (PMAY-U). These missions were launched by Prime Minister Narendra Modi on June 25, 2015 SMART CITIES Of the total proposed projects under the Smart Cities Mission (SCM), 5,924 projects worth Rs 1,78,500 crore or 87% by value have been tendered so far. Work orders for 5,236 projects, 101% by number, worth Rs 1,46,125 crore or 71% by value have been issued. Over 2,665 projects worth Rs 45,080 crore have also been fully completed and are operational as on June 23, 2021. A total of 212 projects worth Rs 24,964 crore have been completed with geographical spread across 57 cities. Atal Mission for Rejuvenation & Urban Transformation (AMRUT) Under the Atal Mission for Rejuvenation & Urban Transformation (AMRUT), the first focused national water mission, 105 lakh household water tap connections and 78 lakh sewer connections have been provided so far. Overall fund allocation for this mission is Rs 1 lakh crore including central share of Rs 50,000 crore. State action plans amounting to Rs 77,640 crore for basic infrastructure projects were approved, against which projects worth Rs 79,772 crore have been grounded. So far, work worth Rs 52,477 crores has been carried out. The government has also made the Online Building Permission System (OBPS) with integration with internal and external agencies operational in 2,465 towns including 452 AMRUT cities. India’s rank in Ease of Doing Business (EODB) in construction permits has jumped to 27 in World Bank’s Report (DBR)-2020 from 181 in 2018. Source: The Economic Times INDIA

The future of commercial real estate investment through REITs

6/24/2021 12:42:00 PM

Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets.. REITs have made a grand entrance into the Indian market at the right moment. Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets. When ‘Embassy Office Parks’, a joint venture between real estate development firm the Embassy Group and global private equity major Blackstone, listed the country’s first REIT, the industry projected that the investment vehicle would soon be a reality in India. The impact on real estate due to Covid-19 has prevailed for 5 quarters. For seven months in between the first and second wave, there was pronounced demand for pent-up and new commercial properties. REITs to benefit commercial sector With the onset of REITs, the commercial sector could witness better capital appreciation, as compared to the residential sector. The formation of REITs isn’t just a great boon to investors, but an advantage to the developers as well. For developers, it could unlock the value of their commercial assets. They can look at REITs as a vehicle to exit, at an extremely attractive capitalisation rate, thereby, reducing their high-level debts. The investors will get capital appreciation and income from the property without having to essentially purchase and maintain it. It will open real estate to a broader spectrum of investors who are particularly looking to invest in the affordable housing sector. Commercial real estate is expected to do well in India in the coming months. Also Read: Need for safer, bigger homes to drive demand for residential real estate REITs outlook With the pace of improvement driven by the availability and effectiveness of a vaccine, commercial real estate and REITs are likely to begin to recover in 2021. REITs have largely been resilient during the pandemic due to measures they took to strengthen their financial positions. Gradually, the situation improved as stores and businesses reopened. Much of the improvement was in the sectors that had been directly impacted by the shutdowns, lodging/resorts, retail, and diversified REITs. We cannot predict the flow right now due to Covid-19 uncertainty but we can surely say there is demand for commercial office space, despite work from home. One has to admit that the residential market is flat which was further impacted by the second Covid-19 wave in March 2021. It will be important to distinguish between short-term or transitory effects of the pandemic versus long-term or permanent changes to commercial real estate markets. However, the future of office spaces remains bright despite the several hurdles caused by the Covid-19 pandemic. The situation is said to be improved as the worst of the second Covid-19 wave has passed. The immediate confidence for the success of India’s first REIT led to preparations for the launch of the second one in India—Mindspace Business Parks REIT, backed by K Raheja Corp and Blackstone. According to CBRE’s 2020 Global Occupier Sentiment Survey, the importance of physical office space is likely to remain solid. 38% of respondents said that the physical office space will remain as important, if not more. Additionally, 70% of the survey respondents were also confident about setting long-term real estate strategies amid the pandemic. Also Read: Why REITs are a good investment option vis-a-vis direct real estate purchase The sentiment towards office space will remain positive in India, Therefore, investors are likely to continue to consider REITs as a stable income generator even in the long run, given that India’s office sector has traditionally witnessed high occupancies backed by long pre-existing leases and lease extensions from corporates. In the long term, the three REITs are expected to do well in terms of appreciation. In the past, for places like Mumbai, investors received an average return on investment of 6%. The rental yield is subjected to be around 6-7% for commercial space. The data is expected to remain stagnant even in the short-term investments. In recent times, the Indian market has witnessed two successful REIT listings of Embassy Office Parks and Mindspace REIT, totalling Rs 9,250 crore. In the midst of the pandemic, Blackstone and Brookfield also announced the two biggest deals in the Indian real estate market, amounting to around Rs 25,000 crore. The recent Brookfield REIT listing was oversubscribed by a whopping 8 times. With this, the industry witnesses the long-term prospects of this sector. The development has set a foresight of transparency, depth, and liquidity for the commercial real estate marketplace in India. The increased competition and transparency that ought to arise with a dynamic REIT market, will lead to better maintenance and operation of the assets. It is expected that a more developed and professional REIT sector, will significantly contribute to broadening the base of real estate investors, particularly by attracting institutional and retail investors. Over the next few years, the appreciation can be reasonably good for investors. In the last two years, the sector has struggled a lot. However, in the coming years, the real estate sector will pick up at an average of 9-12% appreciation. With no other factor, the real estate (commercial and residential) is expected to bounce back in the next 3-4 months. We examine the positive impact it will have on the commercial real estate landscape in India in the long run. Source: Financial Express India

Need for safer, bigger homes to drive demand for residential real estate

6/21/2021 12:19:00 PM

Increased discounts, freebies and attractive payment terms in addition to benign interest rates and regulatory measures are expected to boost sales for real estate players. While real estate and construction remained the most impacted sectors in India in H1FY21, there was some buoyancy during H2FY21, with the economic activity reviving. Measures such as a reduction in the stamp duty in Maharashtra, lower interest rates, pent up demand and a halt in launches provided some relief to the realty sector. However, the green shoots that had started becoming visible were short-lived as the second wave of the pandemic hit the nation unawares and much harder, according to a research report by Brickwork Ratings. Owing to the accelerated vaccine programme adopted by the government, it is now subsiding, and hopefully the problems inflicted by the pandemic should subside soon. While Q1FY22 is expected to be a near washout for most real estate players, the pace of sales is expected to gain traction in the remaining part of FY22, with launches by various marquee players. Increased discounts, freebies and attractive/flexible payment terms in addition to benign interest rates and regulatory measures are expected to boost sales for real estate players, albeit only H2FY22 onwards. A key role here, expectedly, is going to be played by the affordable housing space. Residential real estate has been facing challenges for some time now and is expected to see some traction going forward. With the extension of the work-from-home and online education culture, there is an increased need for larger homes, especially for families with working couples. Residential project sales, which had picked up towards end-Q2FY21, only to slow down in April and May 2021, are expected to witness recovery from the lower base recorded in H1FY21. While negative sentiments led to reduced discretionary spending, resulting in the postponement of buying decisions, the need for safer and bigger homes could actually result in increased demand for residential real estate. The sector is also expected to witness increased home buying from the final/end user rather than investors. Additionally, with prolonged work-from-home for corporate employees, some reverse migration towards tier-2 and tier-3 cities is expected, which may lead to real estate demand gaining traction in these cities. Notwithstanding the gradual increase in home loans outstanding for banks since FY17, the y-o-y growth rate has seen a declining trend since FY20, partially owing to a weak buyers’ sentiment due to the economic slowdown, followed by the pandemic impact. The same trend was observed in the house price index. However, concerns around weak demand and high inventory levels were offset by renewed interest in the sector from FPIs due to the low interest rate regime and expectations of a near-term revival. Commercial real estate, which was performing well over the years, has come under tremendous stress during the pandemic. It has been witnessing high vacancies and the waiver of lease rentals, which is expected to continue till H1FY22 due to oversupply of office spaces, which is further compounded by numerous expired leases coming up for renewals. For the ailing commercial real estate sector, the antidote (literally) is the vaccine, and the pace at which vaccine administration is accelerated. With this, demand for commercial spaces would hopefully revive, and developers are also expected to witness demand for redesigning/re-doing spaces to meet the increased hygiene- and safety-related norms in the new normal. One aspect of this segment that could gain momentum is the concept of co-working spaces. This, while saving higher upfront capital expenditures and fixed costs, also results in longer lease terms with a lock-in period agreeable to both the lessor and lessee. Another sub-segment of commercial real estate, hospitality, is the worst hit; recovery, while slow, will largely depend on the resumption of tourism activities in the country, especially on the commencement of international travel. In terms of investments and fund raising in the real estate sector, foreign portfolio investors’ assets under custody increased y-o-y by 103% to Rs 41,476 crore in March 2021. Improving investor sentiments were reflected in declining inventories in tier-1 cities. There has been an active participation in the Real Estate Investment Trust (REIT) issuances, with three REITs getting listed in the last two years, and Rs 13,000 crore have been raised cumulatively. It has received a good response from investors, and more such issuances are expected going forward. Given the decrease in Covid-19 cases and the overall expectation of the second wave subsiding soon, the overall macro environment is expected to remain strong, supported by stable (and improved) demand in an era of the lowest interest rates ever witnessed in India. While pent up demand has helped keep the sector afloat amid the pandemic, the launches lined up by real estate developers would actually offer the support required for providing momentum for revival. Source: Financial Express INDIA

‘Commercial Realty to Stay Under Pressure in Near Term’

6/18/2021 11:47:00 AM

The commercial real estate sector will continue to face pressure in the near term because of the Covid-related disruptions in the office and retail leasing segments, a report has forecast. With the second wave peaking in the first quarter of FY22, the sector is expected to confront similar challenges as in the previous financial year, the Icra Ratings report said. While the retail leasing segment prospects are closely linked to the recovery in retail sales and discretionary consumption spending by the urban population, demand recovery in the office leasing segment is influenced by multiple factors as corporates evaluate the challenges and opportunities created by the pandemic on their real estate resource planning, it said. “Though cash flows remained materially unimpacted in FY21, we are seeing increasing vacancy levels in the rated portfolio as the pandemic has resulted in deferment of new leasing transactions by tenants, while the available inventory builds up in line with scheduled completions,” Icra Group Head and Senior Vice President, Corporate Ratings, Shubham Jain said. The delay in the conclusion of new leasing is on account of multiple factors, including restrictions on international travel and deferment of decision making, until there is clarity on employees returning to offices at earlier numbers, he said. To some extent, corporates could also be evaluating the potential for them to reduce their real estate footprint through the implementation of hybrid work models, including work-from- home, flexible-seating, among others, he noted. “While the factors that have supported high level of absorption of office space in the country in the past – including abundant and cost-competitive talent pool – remain intact, the evolving work practices in response to the pandemic may create, at best, a temporary deferment of leasing decisions or, in the worst case, a permanent reduction in the demand for real estate space,” Jain said. According to the report, until the implications of the pandemic on the demand trends become clear over the medium term, portfolios with moderate leverage and a low share of under- construction assets will be better placed to weather the short-term challenges such as a drop in occupancy or lower than anticipated growth in rent rates. A sustained gap in the demand-supply position, which can spill over into reduction of rent rates or occupancies in the broader market, will be a key monitorable, it said. Icra said the cash flow pressures on the retail leasing segment are more evident in the near term as state-level lockdowns and restrictions on mall operations impact the tenants’ revenues and will translate into rent concessions being granted by mall operators. As retail operations eventually recover from the impact of the pandemic, the rental collections are also expected to revert to the earlier levels, the report noted. The timeline will depend on the pace of vaccinations in the target consumer segment for retail malls, as well as the revival in consumer sentiments following the adverse impact that the second wave had on disposable incomes. “The first wave resulted in a reduction in net operating income of malls by up to 50 per cent in FY21. However, the recovery in operating metrics witnessed in the second half of last fiscal would have been heartening for the industry. The prospects for such a steep recovery in FY22 could be dampened by the income shock created by the second wave due to the associated healthcare costs that many families incurred,” Jain noted. In addition, he said, the possibility of subsequent waves will weigh on the decision-making by authorities regarding relaxation of restrictions as well as the propensity for visitors to return for non-essential shopping and leisure. Source: Outlook India India

Peripheral areas are the latest preferred realty destinations in cities

6/17/2021 10:10:00 AM

The pandemic has changed consumer behaviour in the real estate business with the city peripheral areas now emerging as the topmost choice for homebuyers as well as developers. The pattern emerging over the last 12-15 months clearly reveals that the supply is chasing demand. As much as 58% of around 149,000 homes launched in 2020-21 are located in the peripheral areas of the top seven property markets, showed data from Anarock Research. The proportion of these launches in peripheral areas has been rising since the past two years but the pandemic has exacerbated the change. In 2018-19, the share of new launches in the peripheral locations was around 51% of about 229,000 homes launched in these cities. In 2019-20, over 207,000 new units hit these markets and the peripheral areas accounted for a 53% share. “Homebuyer preferences changed perceptibly post the pandemic,” said Anuj Puri, chairman, Anarock Property Consultants. “The previous ‘walk-to-work’ concept no longer leads home buying decisions. Instead, bigger and more affordable properties in greener, less polluted areas found favour, driven by work-from-home and e-schooling compulsions as well as safety concerns.” “Developers have quickly changed track and those with land banks in the peripheries, and even otherwise, saw it an opportune time to launch new projects there,” Puri added. The sales pattern also reveal a rising demand in such locations as around 54% of over 151,000 units sold across the top seven cities in 2020-21 were in the peripheral areas. “The conversion of demand into actual sales due to location and affordable price point has been encouraging,” said Ashok Chhajer, chairman at Arihant Superstructures, which focuses on the affordable housing in Navi Mumbai, Mumbai Metropolitan Region (MMR) and Jodhpur region. “We have sold apartments worth over Rs 125 crore across our 10 ongoing projects and two new launches during the second wave of Covid-19 in the last two months as homebuyers now prefer gated communities.” The listed company has sold over 260 apartments during this period and around 106 houses out of total sales were achieved through digital launches of its projects. Among the top cities, Pune saw the most launches in its peripheral areas—76% of 29,950 units launched in 2020-21, led by Mulshi, Pirangut, Daund, Chakan, Chikhali, Kamshet, and Undri. During this period, MMR had 67%, while Delhi-NCR, Chennai, Bengaluru and Hyderabad saw 45%-57% supply coming from such peripheral locations. Not surprisingly, new supply housing in these cities’ key peripheral micromarkets rose markedly between April 2020 to March 2021. According to Puri, it is very likely that some of the major office occupiers will soon de-centralize and bring their offices closer to their employees’ homes in these peripheries. New developments in the peripheries reduce the stress on the choked citycentres, and they become increasingly viable with ongoing infrastructure projects such as metros and ring roads, which will boost their connectivity to the city centres. Many peripheral micro-markets where demand remained muted before the pandemic are now seeing renewed demand and supply. The previous desire to live in city centres—closer to workspaces, children’s school, etc—has reduced markedly with the advent of WFH and e-schooling options in the post-pandemic world. People now prefer to live in bigger, open and green spaces in peripheries and that too at affordable rates. Source: Naredco INDIA

Flexible workplace operators to offer incentives to tenant

6/16/2021 10:20:00 AM

Flexible workplace operators have started doling out oers to retain tenants as many states have allowed reopening of oices from Monday. “We are currently working closely with our existing clients to oer good deals,” said Amit Ramani, founder & CEO of Aws. “We have restructured deals and allowed delay in payments wherever it was required by the clients to sustain their business in the second wave of the pandemic.” According to international property consultant CBRE, on the back of the hybrid space demand, expansion across cities and sustained funding, India’s exible oice stock is expected to grow by 10-15% (y-o-y) from the current 36 million sq ft in the next three years. “For new customers, we are being extremely exible in our partnerships with them. In our experience, that’s the ideal way to handle the current situation as there is no one-size-ts-all when it comes to oering support to customers,” said Ramani. According to Ankit Gupta, regional director at Realistic Realtors, the space that was earlier available for Rs 15,000 per seat, is now being oered at Rs 10,000 per seat. “Furthermore, premium spaces on MG Road or Golf Course Road (in Gurgaon) that were previously priced at Rs 35,000-40,000 per seat, are now priced at Rs 24,000-25,000 per seat. Flexible oice options with cost optimization are the way to go, and co-working companies are currently oering lucrative deals to entice clients,” Gupta said. Co-working spaces are becoming the rst choice for corporates and startups due to their low cost and no long-term commitment model. The Oice Pass (TOP), which oers spaces close to residential societies, is oering six months free pass to those starting business during the pandemic. “Tenants need some hand holding and these are tough times and businesses are facing loss,” said Nikhil Madan, co-founder of The Oice Pass. “We are oering a free pass for six months to support small and micro businesses. Up to three members can come and work at any of our centres.” Some oice players are coming up with innovative models and restructuring their existing and new deals to suit the client’s demands. “At Skootr, we are encouraging our existing clients to discuss our innovative nancial solutions to reduce their cash ows,” said Rahul Sarin, national business head at Skootr FinSave. “For new clients, under our ‘nsave model’, tout as a service allows them between 15% and 20% savings over traditional capex.” Before the second wave of Covid, the market witnessed an increase of 5% in the rst quarter of 2021 compared to the Q4 of 2020. The requirement is now more driven in the form of exible oice spaces like managed, co-working or serviced oice spaces primarily because companies don't want to spend on the capex, and secondly, they would want to retain exibility in these uncertain times. “These are exceptionally diicult times and we are supporting all of our customers and employees during this unprecedented period,” said Harsh Lambah, country manager India and vice president sales-South Asia at International orkplace Group (IWG). “All of our centres across India remain open operating to the highest international hygiene and safety protocols in accordance with WHO guidelines.” Source: The Economic Times INDIA

RERA protects interests of homebuyers: Know its benefits

6/15/2021 12:18:00 PM

The purpose of the Real Estate (Regulation and Development) Act was to balance the interests of all stakeholders, and to address multiple systemic issues that existed in the sector. With the ever-escalating need for housing and infrastructure, the real estate sector is in more demand than ever. Nevertheless, the second wave of Covid has proven to be deadly and disastrous and real estate industry like several others has been ruthlessly hit by the same, but the demand still seems to be sky-rocketing. Albeit its growing importance, the Real Estate industry in India is considered to be an unorganised sector that lacks transparency and accountability from promoters and developers especially due to the delays in project completion and in pre-decided schedules, thereby, leaving such buyers in a lurch. Additionally, the existence of multiple state laws only makes the relief mechanism to be a grueling path for the consumers to seek. To lessen the plight of the consumers in the real estate sector, the Government introduced RERA in 2016. The purpose of the Real Estate (Regulation and Development) Act was to balance the interests of all stakeholders, and to address multiple systemic issues that existed in the sector. It primarily sought to bring uniformity in various state enactments and sought to ensure that the interests of buyers of commercial and residential real estate units were protected. Further, various relevant authorities were created and vested with the competence for enacting the provisions of the Act, setting up the machinery for administering and adjudicating its provisions and the Authorities were further empowered to make regulations and rules under the Act in a time bound manner. Also, under the Act, resolution of complaints and disputes by the Real Estate Regulatory Authority (RERA) and the real estate appellate tribunals are also time-bound which indicates the intention of the legislators to protect the interest of the consumers. Moreover, the Act contains several provisions that address the lacunae in the sector through strict liabilities for promoter irregularities and a disclosure framework, wherein, they are required to mandatorily register for real estate projects and without the necessary approvals, projects cannot be sold, advertised, or booked. Also, the Act imposes many legal and commercial restrictions on promoters and developers to inflict a sense of accountability upon them. Further, another prominent provision under the Act pertains to delays caused by the promoter while handing over the possession of the property, in such an event, according to the Act, the promoter would be liable to return the amount with interest or compensation and if the consumer does not want to withdraw, they would be entitled for the interest amount during the delay period. Lastly, to ensure that the Act is complied with and that the buyers are not the sole sufferers in the event of delays in the completion of a project, as a deterrent, stringent provisions were introduced and penal provisions are also prescribed for violations committed by buyers or real estate agents. Despite the ambitious provisions of the Act, non-compliance, deviations, and delays in the implementation are seeming and have led to a sluggish rate of progress. There are rampant delays by the States in setting up their relevant authorities, which further wrecked the situation. Such authorities also created rules in deviation from the Act, and failed to present any uniformity in its adjudication, which is against the letter and spirit of the Act. Further, the implementation of the Act is also hampered by the apparent bias towards buyers as though the aim of the Act is to protect buyers and their rights, the Act provided for many strict provisions, but to the dismay of the buyers, the same are perceived as draconian by many real estate promoters and significantly impacted their economic interest as well. Further, various inconsistencies, confusion and discrepancies are prevalent across the country which are persistently escalating due to the lack of dialogue amongst stakeholders and the inability to tap the appropriate machinery to resolve such deficiencies. The same could have been resolved had the Central Government invoked the provisions of Section 91 of the Act which provided for “… incorporation of provisions not inconsistent with the provisions of the Act, for removal of difficulty arising in giving effect to the provisions of the Act, within a period of two years from the date of commencement of the Act.” Moreover, despite the loopholes in the Act, the same cannot be enforced upon states as the Act is a toothless tiger which requires teeth to do the needful. Notwithstanding the emerging urgency of a robust real estate act in today’s pandemic struck country wherein the need for housing and infrastructure is undying, RERA has not been proactively spoken of and adopted in its true spirit and form which if done, would enable a smooth sailing transition from the inconsistent and ambiguous state of the Act to being a beacon of hope for all involved. Source: Financial Express INDIA

Model Tenancy Act expected to help improve rental yields over the medium to long term: ICRA

6/14/2021 10:48:00 AM

Low rental yields remain a key constraint in the development of the rental market in the country and the Model Tenancy Act is expected to support institutionalisation and improvement in rental yields over the medium-to-long term, an analysis by ICRA has said. India has a large vacant housing stock of over 110 lakh units and on the other, it has a huge housing shortage. One of the key reasons behind this paradox is the low rental yield in the country, which is one of the lowest across global markets. While the rental yields in India stand at 2-3%, the same in some key markets can go as high as 7-8%. Moreover, with the high taxation of 30% in India, the net benefit from rental income is low, especially when compared to housing finance costs of around 7-8%, the analysis said. “While capital appreciation used to cover this gap earlier, such appreciation has been muted over the last few years, thereby making the gap between rental yields and interest costs more detrimental. Thus, in order for the rental market to develop, returns would need to increase,” said Mahi Agarwal, Sector Head & Assistant Vice President at ICRA. Indonesia has a rental yield of 8.5%, amongst the highest in the world followed by Cost Rica at around 7%. Ireland and Columbia command a rental yield of around 6% and Bulgaria is around 5%, the analysis said. Other issues that have impacted the development of the Indian rental market include high age and poor maintenance of the vacant stock. Given these concerns, the implementation of the MTA as an effective rental housing framework, with it clearly spelling out the obligations of landlords and tenants with regards to property maintenance and upkeep, would be a crucial step towards aiding the development of the Indian rental market. India’s rental market is poised for a significant change and development, post the approval of the Model Tenancy Act (MTA) by the Union Cabinet last week. The new act replaces the Rent Control Act, 1958 and aims at bringing about a balance of interests between tenants and landlords. Specifically, it attempts to address some of the key conflicting issues between the parties by bringing about certain important changes, including the establishment of a rent authority and the mandatory requirement for a written rent agreement; and registration of the same with the authority. Moreover, it also provides clarification on the premise and process for eviction of tenants, maximum level of security deposit, rent revision and requires the establishment of rent courts for dispute resolution. The successful roll-out of the MTA is expected to have a positive impact on market functioning by creating a balanced legal framework, which would improve transparency and protect the interests of all key stakeholders, it said. Till now, the rental market has remained largely underdeveloped, despite the presence of vacant units in urban areas as well as the existence of a considerable housing shortage, primarily due to trust issues between landlords and tenants, low rental yields and lengthy dispute resolution mechanisms. “With the MTA in place now, housing stock can be used more efficiently, which would, in turn, support greater formalization and institutional of the sector over the medium-to-long term. The consequent development of new business models would aid improvement in return metrics. However, effective and broad-based implementation of the act, along with continued government support and initiatives aimed at reforming the rental market would remain key,” Agarwal said. Source: Money Control INDIA

Over Rs 3.5 lakh crore worth asset monetisation through REITs, InvITs likely in one year: Report

6/12/2021 12:30:00 PM

Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT) structures are expected to see healthy traction in the near to medium term, supported by the track record of entities that have already floated such structures, enabling regulatory developments and focus on attracting investments into the infrastructure space. Over 3.5 lakh crore assets likely to get monetised through InvITs and REITs over the next one year. Of this, assets worth over Rs.2.5 lakh crore are expected to be monetized through InvIT while 1 lakh crore worth monetisation is likely to be through REITs, said ratings agency NSE 3.36 % . In the last two years, the InvIT space had witnessed monetisation of assets worth Rs 85,300 crore. During the same period, all three REITs valued at Rs 77,100 crore were listed. With InvITs and REITs now recognised as borrowers under the SARFAESI Act, lenders to these trusts, shall have adequate statutory enforcement options, absence of which was earlier becoming a constraint for bankers to lend directly at trust level. Further, Insurance Regulatory and Development Authority of India (IRDAI) has recently allowed insurers to invest in debt instruments of InvITs and REITs rated AA and above as a part of their approved investments, which evidences growing comfort of lenders as well as investors around such structures. Clarifications on the tax-free nature of dividend distribution from these trusts (subject to certain conditions) have also resulted in them being viewed more favourably. “The supporting regulatory framework for various stakeholders attracted both In the last two years, the InvIT space had witnessed monetisation of assets worth Rs 85,300 crore. Over Rs 3.5 lakh crore worth asset monetisation through REITs, InvITs likely in one year: debt and equity investors towards these trusts. Till date assets worth Rs 2.1 lakh crore have been floated through these platforms – 64% through InvITs and 36% through REITs. Lenders are also increasingly becoming comfortable lending to such structures. InvITs and REITs together raised debt of Rs 70,800 crore so far majorly through NCD route (62%) and term loans (37%),” said Shubham Jain, Group Head & Senior Vice President, Corporate Ratings, ICRA. According to him, the capital raising by these trusts is also aided by the favourable view that investors have taken on the long-term revenue generation potential of such infrastructure and real estate assets in the country. “In the real estate space, there are various developers and asset managers who have steadily built-up large portfolios of REIT-ready assets which can be monetized through this route. Of such portfolios, assets worth over Rs 1 lakh crore are likely to be listed in the near to medium term. Infrastructure assets with 3 to 5 years of operating track record across various segments like, roads, gas pipeline, digital fibre, power transmission and renewables are ideal candidates for monetisation through this platform,” Jain added. With a track record of more than five years for InvITs and two years for REITs, supporting regulatory framework and the increase in comfort levels of various stakeholders on these platforms; the potential remains huge. Source: The Economic Times INDIA

Govt approves construction of 361,000 houses under PMAY-U scheme

6/11/2021 12:55:00 PM

Under Pradhan Mantri Awas Yojana - Urban (PMAY-U), the government has approved 708 proposals for the construction of 3.61 lakh houses. The decision was taken at the 54th meeting of the Central Sanctioning and Monitoring Committee (CSMC) under PMAY-U held in the national capital on Tuesday. According to the press statement by the Ministry of Housing and Urban Affairs, the meeting was attended by 13 states/UTs. These houses are proposed to be constructed across "Beneficiary Led Construction and Affordable Housing in Partnership verticals". In addition, 'PMAY- U Awards 2021 - 100 Days Challenge' was also launched by Durga Shanker Mishra, Secretary, Ministry of Housing and Urban Affairs (MoHUA). "The awards are given to recognize and celebrate the outstanding contribution and performances by states, Union Territories (UTs), urban local bodies (ULBs) and beneficiaries for successful implementation of the mission and create a healthy competition," said the release. This was the first CSMC meeting during the second wave of the Covid-19 pandemic. At the meeting, Durga Shanker Mishra said, "The demand for sanction has saturated in all states/UTs. Utilisation of unused funds and ensuring completion of the projects within the stipulated time is our prime focus now." The states/UTs also put in their proposals for revision of projects due to various issues such as, of land, topographical hazards, inter-city migration, change of preferences of verticals and loss of lives. In its press release, the Ministry of Housing and Urban Affairs said, "With this, as on date, the total number of sanctioned houses under PMAY(U) is now 112.4 lakh and so far, 82.5 lakh have been grounded for construction of which 48.31 lakh have been completed/delivered. Total investment under the mission is Rs 7.35 lakh crore which has central assistance of Rs 1.81 lakh crore of which Rs 96,067 crore of funds have been released." Addressing the participating states/UTs, secretary, MoHUA laid emphasis on Six Light House Projects (LHPs), the foundation stones of which were laid by the Prime Minister in January 2021. The LHPs are being constructed at Agartala, Chennai, Lucknow, Ranchi, Rajkot and Indore. "These LHPs should galvanize all concerned departments involved in construction. Use of cutting edge technology should be replicated and scaled up," he said. Source: Business Standard INDIA

Haryana Chief Minister Manohar Lal Khattar’s big push for development of Panchkula

6/10/2021 12:06:00 PM

Haryana Chief Minister Manohar Lal Khattar today announced the setting up of the Panchkula Metropolitan Development Authority (PMDA) on the lines of the bodies established in Gurugram and Faridabad. He said it would help in executing an integrated development plan. He said Panchkula was a part of the tricity, but lagged behind Mohali. Addressing the media in the presence of Speaker Gian Chand Gupta, the Chief Minister said Panchkula would be developed as a hub of medical, education and tourism facilities and industrial investment. He said to promote Panchkula as a destination for real estate, external development charges (EDC) and infrastructure development charges (IDC) were slashed by almost one-third in Panchkula, bringing these on a par with those in Mohali and Zirakpur. He said there were two sites for big hospitals, one in Sector 32 and the other in Sector 5-C, which would be auctioned soon. He said a food and drug testing lab was being opened in Sector 3 at a cost of Rs22 crore. “At Thapli in Morni, a panchkarma centre is being set up under the Ayush Department. A nursing college is also being planned for the city while the National Institute of Fashion Technology is coming up in Sector 23,” he said. He said efforts were being made to develop Barwala as an industrial township and the IT Park in Panchkula would be operated in collaboration with the Software Technology Parks of India (STPI). He said Morni would be developed as a tourist destination. He said paragliding activities would start at Morni on June 20. Besides, 10 trekking routes had been identified. “We are exploring the possibility of home stay or farmhouse stay facilities for trekkers,” he said. He talked about setting up Nakshatra Vatika, Sugandh Vatika and Rashi Van on 20 acres along the Morni road from Panchkula. Focusing on Pinjore, he said a film city was being planned on 60 acres. “It will comprise indoor studios,” he said. He said the government had decided to shift the Sector 23 dumping ground to Jhuriwala by December 31. He said the work to connect Panchkula with the Chandigarh airport was in progress. He said an air taxi service might start from Pinjore. WHAT’S IN THE OFFING 60-acre film city in Pinjore Two big hospitals in Sec 32 & 5-C Better education & tourism facilities, industrial investment Source: The Tribune INDIA

View: Growth of global PE funds in Indian Real Estate

6/9/2021 11:32:00 AM

Capital is global and real estate is local. The interplay of global capital in the local property market has never been so pronounced. Despite the pandemic, we have witnessed increasing participation and more interest from offshore investors in the Indian real estate segment. While large global investors have always remained invested in India despite various international and national regulatory, and economic shocks throughout, the last decade witnessed an enlargement in the investor base with the advent of new Canadian, European and Asian investors. This coupled with the growing exposure across newer asset classes like office space, stressed loans, impact housing, warehousing and data centres will have a far-reaching and salubrious impact which may fuel a paradigm shift in Indian real estate over the next ten years. The previous decade witnessed a resurgence of the real estate market. The first-ever regulator (RERA) was established, bringing back the buyer’s confidence in a sector that was plagued with a trust deficit. The revival in the fundamentals of the residential sector was also marred by the Non-Banking Financial Companies (NBFC) liquidity crisis emanating from an AAA-rated bond default in late 2018. The office leasing grew from 28 mn sft in 2010 to 45 mn sq ft in 2020, and also witnessed the listing of two office REITs in the Indian stock exchange. The Goods and Services Tax Act 2017 ushered in inefficiencies that attracted offshore capital looking to finance the development of warehouses to capture the consolidation and growth. Setting the stage for global investors While the sector witnessed a surge at the beginning of the last decade, it was hit by the liquidity crises in 2018 and the global pandemic in 2020. This is the backdrop as we enter the new decade in 2021. The new decade has begun with a huge scale down in real estate debt exposure by NBFCs. This has had a direct impact on residential development and has initiated a consolidation in the sector. The NBFCs exposure to real estate has been estimated to be reduced from Rs 200,000 crore as of March 2020 to Rs 130,000 crore in Dec 2020. The office demand across six cities dipped to 31.9 mn sft in 2020 and this will get further impacted as the second wave of COVID-19 unravels in India. The Indian real estate sector was undercapitalized and fueled by debt from NBFCs. The halt of debts from NBFCs and challenges brought on by the first, second and anticipated third wave of COVID-19 has created an opportunity for well-capitalized offshore investors to get more exposure with a risk-adjusted return. As per the report by Savills India, in the first quarter of 2021, all the investment into Indian real estate came from foreign institutional investors. Of the total, 58 percent share (Rs 78.3 billion) went towards commercial office assets while 42 percent (Rs 56.7 billion) were invested into residential real estate. The stress in the loan books and the Insolvency and Bankruptcy Act 2016 have enabled global Special Situations/NPL specialists from firms like Oaktree, Fallaron, Bain Capital, SSG ARES etc. to allocate over USD 2 billion for purchasing loan books from NBFCs since 2020. India-based fund managers like Kotak Realty Advisors, IIFL, Nippon India Alternative Investments, KKR, and DMI have raised commitments from offshore investors in recent times for investing through structured debt instruments. Besides, large global investment managers and investors including ADIA, Blackstone, Brookfield, GIC, Capitaland, Mapletree, etc have continued to make record investments in the office sector. The recent years have also witnessed new commitments from investors like Ivanhoe Cambridge, CPPIB, Mertiz of Korea, Sumitomo of Japan, Keppel Land of Singapore, APG of Netherlands, Allianz of Germany in the Indian real estate sector across strategies. Will more global investors continue to participate in Indian real estate? The Indian real estate across products offers one of the best risk-adjusted returns globally, in theory. Consistent performance by some of the large foreign institutional firms such as Blackstone, Capital and GIC in the India core assets space has proved global investors the scope of investing in India. This has reaffirmed the confidence of the global capital towards Indian real estate. In addition, global funds have continued to watch the Indian residential market that has been in a transformative phase thanks to various government reforms including the implementation of The Real Estate Regulation and Development Act (RERA) and Benami Property Act that have led to improving transparency and accountability in the sector. While the office segment has been generally favoured by global investors, residential real estate has received a fair share of investments as well, in recent times. As data emerges on the recovery of the residential sector and good returns to these new investors, more commitments will be made. With sales in the mid-income segment continuing to rise and the inherent demand for affordable houses staying strong in the country, foreign institutional firms are closely looking at this space as a potential investment opportunity in the long term. In the affordable housing space, where there is potential for volume growth, commitments have already been made by global Impact funds like IFC, REAL, CDC, ADIA etc. In due course, as the affordable housing delivery space becomes more institutionalized and scalable from an investment perspective, we will see more commitments from equity funds as well. Another important factor is the enormous dry powder allocated by global investors for the Asian markets. Data shows that over the last five years, funds dedicated to the Asian real estate market have only grown. For instance, dry powder allocated by Asia-focused private equity funds and venture capital increased from USD 119 billion in 2015 to USD 439 billion in 2020. Looking at this massive increase, and sustainable return possibilities in the Indian real estate segment, many more global investors will participate in the sector. In fact, the following decade will witness greater product-specific participation by Asian and global mainstream investors as Indian real estate undergoes transformation and consolidation. Our estimates suggest that deals or transactions worth Rs 30,000 to 40,000 crore are likely to take place between 2021 and 2022. The year 2022 will also witness newer foreign investors coming to India. Global investors have continued to invest in India and increase their allocations even while the sector dealt with various challenges. This decade will usher a paradigm shift in the supply side of the business, creating more sustainable platforms in tune with the needs of global investors. The participation by Korean and Japanese investors in Indian Real estate, for the first time, is noteworthy. These are highly liquid economies and traditionally export a lot of capital for real estate across the globe. The increased global investor participation across strategies, sectors and products will also help in further institutionalization of Indian real estate as it grows from strength to strength. Source: CNBC TV 18 India

Large listed residential developers record one of best quarters in January-March

6/8/2021 12:33:00 PM

The residential property sector has recorded one of its best quarters in the fourth quarter of the financial year 2020-21, with sales across the top eight cities nearing 85 million sq ft, reecting amongst the highest level of sales over the last twenty quarters, said ratings agency. . This comes after the sector witnessed one of the worst demand crashes in recorded history during the rst quarter of FY2021, triggered by the Covid-19 pandemic. As against the Q4 FY2021 record, the pan-India quarterly average sale in FY2019 and FY2020 stood at 84 million sq ft and 81.5 million sq ft, respectively. While policy roll-outs in the form of RERA and GST, together with developer focus on deliveries, had started supporting demand from FY2019 onwards, the onset of the liquidity crisis impacted sales in FY2020, and Covid-19 served as a double whammy thereafter. However, recovery post the rst wave was quick, with the increased importance of home-ownership after the start of the pandemic serving as a fundamental growth driver, given the extended period of work-from-home and consequent requirement for bigger/better housing. “Potential home-buyers, fence-sitters and home-renters increasingly took the plunge towards home-ownership, with the improvement in aordability over the past year further supporting their decision. The low home-loan rates, together with attractive discounts/payment schemes, resulted in improved aordability. Stamp duty reductions in Maharashtra and Karnataka (for units priced up to Rs. 35 lakhs) also stimulated house purchases,” said Mahi Agarwal, Sector Head and Assistant Vice President at ICRA. Now however, according to her, the second wave of the pandemic is impacting housing sales levels once again. While the essential underlying growth drivers have been reinforced by this wave, thereby supporting the likelihood of a quick recovery once the initial impact tapers o, continuation or extension of support measures such as interest rate and stamp duty reductions would remain key to reinstating the high recovery momentum in a timely manner. Many listed players also recorded high performance levels, with key players such as and declaring all-time high residential sales and collections during the quarter. In terms of demand, as per market reports, housing sales have declined by around 40-50% in April 2021, relative to pre-Covid monthly averages, thereby de-railing the strong demand recovery witnessed post the rst wave. Some of the key demand drivers that supported the recovery in the second half of FY2021 remain in place, including low home loan rates and income tax sops, particularly for affordable housing, and these are expected to support recovery going forward. However, the stamp duty reduction provided in the state of Maharashtra has now expired. This reduction had bumped up sales in key cities like Mumbai and Pune during August 2020 - March 2021. Other cities, such as Hyderabad and Chennai also recorded a fast pace of recovery, on the back of continued commercial real estate activity, which, in turn, supported residential demand, and high proportion of lower-ticket-size housing. According to ICRA, reinstatement of stamp duty measures in Maharashtra, extension of the same by other states, and developer focus on right-pricing and inventory liquidation would support a quicker recovery in sales once the initial impact of the second wave recedes, given that the fundamental demand driver relating to the importance of owned housing has been further strengthened now. The supply-side will also need more support, especially for the smaller developers, who make up around 80% of the market. Developers will need adequate liquidity and/or renancing exibility to tide over the disruption in cash ows and meet debt obligations, at least till demand recovers. During the rst wave, the moratorium on debt servicing had aided in conservation of liquidity, particularly for those developers with maturing debt obligations. Extension on RERA timelines by six-nine months provided additional exibility to defer outows in case of weakness in collections. Certain states also reduced approval costs/construction premiums etc. for developers for a limited period. However, no such measures have been extended post the onset of the second wave, thereby creating an increasingly challenging operating and nancing environment for developers. Source: The Economic Times India

Chandigarh administration plans to push for leasehold to freehold before centre

6/7/2021 11:23:00 AM

CHANDIGARH: The UT administration has planned to push for conversion of leasehold properties into freehold in Industrial Area, phases I and II, before the ministry of home affairs (MHA) next month. Sources said the administration will take up the issue with the ministry, with a senior official pointing out that they are already working on it. Last year before the coronavirus lockdown was enforced, the matter was discussed in the meeting chaired by UT adviser Manoj Parida with members of Industrial Advisory Committee of Chandigarh. The administration had last converted leasehold plots into freehold in 1983 in commercial category. The matter was also taken by up MP Kirron Kher with the MHA and the ministry of urban development. Industrialists have been demanding for conversion of leasehold property into freehold and leasehold to leasehold in Industrial Area for long. Recently, the administration had even conducted a survey in Industrial Area for checking leasehold plots. The administration had set up phases I and II of Industrial Area during the 1970s on an area measuring 147 acres. The plots are governed by zoning and architectural control, which were prepared according to conditions prevailing at that time. There are 1,884 plots in both phases, of which 700 are 1 kanal and above, while there are 443 and 180 plots measuring 10 and 15 marla, respectively. There are as many as 381 plots of 5 marla. Recently the UT had sought a report of violations in industrial plots, including leasehold and freehold. The report was later prepared by the estate office and put up before the committee formed to address pending demands of industrialists of the city. Thereafter, certain need-based changes in the architectural controls in accordance with modern day industrial requirements were allowed. The UT had said cycle stands could be used for other purposes such as storage of raw material and other industrial related functions. In addition to these changes, the UT had also stated that in wake of theft incidents in industrial areas and requirements of industry, partial covering of central courtyard with poly carbonate sheets for storage only was also allowed, subject to compliance of building bylaws and Fire no objection certificate from competent authority of the municipal corporation. Source: ET Realty Chandigarh

Haryana government withdraws proposal to levy cess on property registration

6/6/2021 11:58:00 AM

The state government has withdrawn the proposal to levy cess on property tax and on sale of new vehicles as a revenue generation source for the Gurugram Metropolitan Development Authority (GMDA). This decision was finalised last month, said GMDA officials as per directions from the state government. According to the officials, in view of the decisions taken in the matter of sharing of stamp duty and transfer of EDC funds to GMDA, the proposal was withdrawn. Regarding the proposal to levy a cess on the registration of vehicles in the city, the chief minister’s office said that there was no provision in GMDA Act, 2017, to impose a levy on vehicles and hence there was no need to consider any such proposal. GMDA chief Sudhir Rajpal when approached on the subject said, “These are revenue sources for GMDA but ultimately the state government takes the decision. Any such cess would add additional burden on the residents and hence the government has decided to not take these charges,” Rajpal said. TOI had earlier reported that chief minister Manohar Lal Khattar had in principle approved a bunch of revenue generation measures in a bid to make the metropolitan authority financially self-reliant. Besides the cess on property, a proposal for cess on registration of new vehicles had also been approved by the chief minister earlier. It was proposed that a cess of 5% may be levied on the registration of new vehicles in the GMDA area. Also, at least 50% of the amount of Road Tax collected by the transport department from the GMDA notified area should be remitted annually to the authority for road infrastructure work in the notified area. The measures had been proposed to generate funds for GMDA’s infrastructure work as the agency was seeing a big gap between its expenditure and revenue. With the EDC funds now being transferred straight to GMDA, officials are hopeful of a better revenue stream. However, even with the 1% stamp duty charges and EDC funds, the financial troubles for the metropolitan authority are far from over. The budget for the year 2021-22 has been estimated at Rs 1,848 crore whereas the expected receipts for the year are around Rs 1,200 crore. “There is a shortfall of around Rs 600 crore and we are looking for avenues for financing the gap amount,” said Khattar, while talking to mediapersons after the meeting. Source: ET Realty INDIA

RBI keeps policy rate unchanged at 4%

6/5/2021 10:02:00 AM

The Reserve Bank of India (RBI) on Friday decided to leave benchmark interest rate unchanged at 4 per cent but maintained an accommodative stance as the economy faces heat of the second COVID wave. This is the sixth time in a row that the Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das has maintained status quo. RBI had last revised its policy rate on May 22, 2020, in an off-policy cycle to perk up demand by cutting interest rate to a historic low. MPC decided to maintain status quo, that is keeping benchmark repurchase (repo) rate at 4 per cent, Das said while announcing the bi-monthly monetary policy review on Friday. Consequently, the reverse repo rate will also continue to earn 3.35 per cent for banks for their deposits kept with RBI. Das said MPC voted unanimously for keeping interest rate unchanged and decided to continue with its accommodative stance as long as necessary to support growth and keep inflation within the target. The central bank lowered its estimate for economic growth to 9.5 per cent for the current fiscal from earlier projection of 10.5 per cent due to the impact of the second COVID wave. This is the first MPC meeting after official data showed that Indian economy contracted 7.3 per cent in the last fiscal, weighed down by nationwide lockdown that pummelled consumption and halted most economic activities. With regard to inflation, the governor said that retail inflation is likely to be 5.1 per cent during the current fiscal. MPC has been given the mandate to maintain annual inflation at 4 per cent until March 31, 2026, with an upper tolerance of 6 per cent and a lower tolerance of 2 per cent. Source: ET Realty INDIA

Model tenancy act to strengthen organised rental housing in India

6/4/2021 11:46:00 AM

The development comes at a time when the country faces shortage of proper rental housing facilities, especially for the lower-income groups and migrant workers, while there are over 1 crore flats vacant in urban areas. The government on Wednesday cleared the model tenancy act (MTA), a major step towards institutionalisation of rental housing in India. The development comes at a time when the country faces shortage of proper rental housing facilities, especially for the lower-income groups and migrant workers, while there are over 1 crore flats vacant in urban areas. The Union Cabinet approved the MTA for adoption and enactment by states and UTs to promote rental housing in India, ministry of housing and urban affairs (MoHUA), said adding, “Making 1.1 crore vacant houses available on rent will complement the vision of Housing for All by 2022”. For comparison, Primus Partners and Guesture Co-living in a report last year said that India’s residential rental market touched annual figures of over $20 billion, or more than Rs 1.45 lakh crore (IMF). Of this, 68% ($13.5 billion) is in urban areas. As a proportion of all housing, rental comprises around 11.1% of the total. As per 2011 census, the share of households living in rented facilities was 5% in rural areas, but 31% in urban areas. More than two-thirds of the urban rental housing market is unorganised, it points out. Welcoming the act, Anarock Property Consultants chairman Anuj Puri said rental market has long been fragmented and underdeveloped, invariably creating pressure on the overall real estate industry. Leasing and renting of residential properties falls under the purview of Rent Control Act, with each state having its own version. Lack of proper legislation, tenant-landlord conflicts are quite common, leading to lengthy litigation. “MTA will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country. To ensure speedy redressal of disputes, the Act also proposes to establish separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing,” he noted. NoBroker CEO Amit Agarwal explained that MTA caps the security deposit to two months of rent and this liberates tenants from being forced to pay high and random deposit amounts to landlords. Besides, the landowner cannot cut power and water supply in case of disputes. They will also need to provide 24-hour notice to tenants to carry out repair work. Nod to SCO pact The Cabinet on Wednesday accorded an ex post facto approval for signing and ratifying an agreement on cooperation in the field of mass media between all member states of the Shanghai Cooperation Organisation (SCO). The pact aims to promote equal and mutually beneficial cooperation among associations in mass media. Approval for India-Japan collaboration The Union Cabinet on Wednesday approved a memorandum of cooperation with Japan in the field of sustainable urban development which is expected to create employment opportunities. According to an official statement, the memorandum of cooperation (MoC) will be signed between the Ministry of Housing and Urban Affairs and Japan’s Ministry of Land, Infrastructure, Transport and Tourism in supersession of an existing MoU of 2007 on urban development. Source: Financial Express INDIA

Cabinet approves Model Tenancy Act; govt says it will help overhaul legal framework

6/3/2021 10:17:00 AM

The Union Cabinet on Wednesday approved the Model Tenancy Act under which separate rent authorities, courts and tribunals will be set up in districts to protect the interest of both the owner and tenant. For residential premises, tenants will have to submit security deposit of maximum two months’ rent, while in case of commercial property, six months’ rent will have to be deposited. States and union territories can adopt the Model Tenancy Act by enacting fresh legislation or they can amend their existing rental laws suitably. The Act mandates for written agreement for all new tenancies, which will have to be submitted to concerned district ‘Rent Authority’. Union Housing and Urban Affairs Minister Hardeep Singh Puri said that the move will help overhaul the legal framework with respect to rental housing across the country. The government said that the MTA will be applicable prospectively and will not affect existing tenancies. Rent and duration of tenancy will be fixed by mutual consent between owner and tenant through a written agreement. The Act says that no landlord or property manager can withhold any essential supply to the premises occupied by the tenant. According to the ministry, tenant will not be evicted during the continuance of tenancy agreement unless otherwise agreed to in writing by both the parties. Under the Model Tenancy Act, unless otherwise agreed in the tenancy agreement, the landlord will be responsible for activities like structural repairs except those necessitated by damage caused by the tenant, whitewashing of walls and painting of doors and windows, changing and plumbing pipes when necessary and internal and external electrical wiring and related maintenance when necessary. On his part, tenant will be responsible for drain cleaning, witches and socket repairs, kitchen fixtures repairs, replacement of glass panels in windows, doors and maintenance of gardens and open spaces, among others. “Where the landlord proposes to make any improvement in or construct any additional structure on any premises, which has been let out to a tenant and the tenant refuses to allow the landlord to make such improvement or construct such additional structure, the landlord may make an application in this behalf to the Rent Court,” the Act stated. The Act stated that the state government and union territories, in consultation with the jurisdictional high court can appoint district judge or additional district judge as ‘Rent Tribunal’ in each district. In a statement, the government said that it is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage. “The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the Model Tenancy Act for circulation to all states/union territories for adaptation by way of enacting fresh legislation or amending existing rental laws suitably,” the statement stated. The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market, the government said. “The Model Tenancy Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country. It will enable creation of adequate rental housing stock for all the income groups, thereby addressing the issue of homelessness,” it stated. The Act will facilitate unlocking of vacant houses for rental housing purposes, it said, adding that it is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage. Source: Tribune INDIA

85 per cent first time buyers pave way for realty growth in 2021

6/2/2021 10:43:00 AM

The Indian real estate sector has always remained an investor’s favourite which has shown immense resilience against the pandemic. Continuing its uphill climb against all odds, the sector continues to attract potential buyers. These positive sentiments were reflected in a recent ANAROCK report which said that in the nine months between July 2020 and March 2021, 85 per cent of homebuyers in the NCR market were first-timers. “During volatile times, buyers pursue comfort and steadiness, and the prevalent demand for real estate has established that there is an appeal for stable assets in an otherwise unstable economy. The industry has shown indomitable resilience against the pandemic and has transformed it into a buyer’s market,” said Aakash Ohri, Sr Executive Director, DLF Home Developers Ltd. “2020 actually brought the fence sitters to the market. The pandemic directed the demand for residential real estate moving beyond the metros, to mini metros, and tier II and III cities. Catering to the demand beyond Delhi NCR region, we witnessed a sharp rise in sales of residential projects in key cities like Lucknow, Indore, Shimla, Kasauli and Tri-city in Punjab, with diverse offerings – from plots to ready-to-move-in units. Between November 2020 and January 2021 alone, we did three back-to-back successful launches in Gurgaon. These were all plotted developments – close to 150 independent floors sold for over 500 crores, followed by similar launches in DLF City Phase 1 to 4 in Gurgaon and in New Gurgaon region,” Akash Ohri further added. As per the total housing sales of 21,750 units in NCR during these nine months, around 90% buyers were end-users and 10 per cent investors. With these promising numbers, leading real estate developers are confident that the demand in the resilient real estate sector will get stronger once lockdown restrictions are lifted. “At present, affordability and financing cost are at the lowest point in this century, acting as a catalyst, reducing inventory overhang in not only ready inventory but also under development stage projects; while new launches have considerably reduced thereby bringing supply down. Not to mention, lockdown caused by COVID has made people realise the importance of a home including its size and amenities. Therefore, the experience of this pandemic (COVID) may make people invest heavily in real estate in the given time, increasing demand for housing, and coming years may witness revival of affordable luxury segment in real estate,” Rajan Gupta, Vice President – Business Development and Corporate Strategy, Omaxe Limited. As per the ANAROCK report there has also been a sharp incra4se in demand for an additional 1/2 room for creating a mini office, study room, yoga, gym etc. As movement is now restricted due to COVID-19 there is rise in demand for 2.5 BHK and 3.5 BHK homes where the homebuyers are looking to convert the additional space as per their need and requirements. “Homebuyers these days prefer residences that can accommodate ‘space’ for remote working, with more outdoor open spaces, and gated communities having state of the art amenities. Customization of space has been expanded to such an extent that developers are offering complete open floors and designing them as per homebuyer’s requirements from a range of standout design options. This shift in preference is largely because of the COVID-19 pandemic and its socioeconomic impact. First-time homebuyers who are now investing in residences not only for investment purposes but also keeping in view the safety and security aspects of their families. Work from home (WFH) as the ‘new normal’, has skewed homebuyers’ preference towards 2LDK + personal workspace that has led to the emergence of a ‘new asset class’ from an investment perspective. This new product offering is perfectly suited for the WFH lifestyle preferred by millennials, global professionals, and the expat communities,” said Ashok Kapur, Chairman – Krisumi Corporation & Krishna Group. According to ANAROCK, affordability, bottomed-out prices, stamp duty cut and low home loan interest rates have resulted in the increased demand. In addition, the NCR region where property prices are comparatively higher was the preferred choice among first-time buyers and attracted buyers from neighboring cities also. In the luxury segment, 75 percent preferred ready to move in spaces and 20 per cent went for spaces that are due to complete in two years. “Customer-centricity has taken a key position in the market which will ultimately result in better customer satisfaction. Buyers are now well-aware of the latest and global trends and are willing to go an extra mile for their dream house for an opulent lifestyle. Residential spaces that incorporate a dedicated workspace, large functional areas for exercises or entertainment, study rooms, outdoor spaces are on their wish list. Technology is playing a key role and developers are offering modern amenities like contactless sensors, hi-tech safety and surveillance systems, etc to match modern buyers’ expectations,” Ashish Sarin, CEO, AlphaCorp. “The developers are in a much better position and expect a rapid revival in customer sentiments with mass inoculation drives and lowering of infection rate. The homebuyers enjoy major capital gains on their investment in the long run and rentals are also a strong addition that adds value to their overall incomes. Interestingly, no prime market in the country has shown any downward movement in prices in spite of the severe pressure and it will bring more traction in investments. The real estate has always remained resilient and buyers look at the segment as a long-term investment. As soon as lockdown restrictions are lifted, the segment will continue its uphill climb in the near future,” said Mukul Bansal, Director, Motia Group. With new infrastructure upgrades, improved liveability index, and excellent connectivity, peripheral areas have also become attractive choices. Many homebuyers are now upgrading to larger homes in non-central locations. Amid the extended-work-from culture, a rise in tech-savvy millennial customers has changed the perceptions and has enabled developers to come up with offerings with modern amenities matching global standards, setting new benchmarks in the housing segment. Increased foreign investments have also buoyed sentiments of the residential segment. Source: The Print INDIA

Real estate sector will contribute 10% of the GDP by 2030: Housing secretary

6/1/2021 10:57:00 AM

Real Estate will contribute 10% of the GDP by 2030, according to Union Housing and Urban Aairs Secretary, Durga Shanker Mishra. Mishra was speaking on the launch of housing price index (HPI) in association with the industry body NAREDCO, which will enable homebuyers, investors, real estate developers and policymakers to track high-frequency price movement in India's key residential markets. “The Housing Price Index jointly developed by the Indian School of Business and has the potential to emerge as a good indicator of the country’s real-estate market health. The real-estate sector has been impacted due to the COVID-led slowdown and overall uncertainty. At this time, it is essential to track the growth via credible sources that will help authorities make quicker and informed decisions during such exogenous shocks,” said Mishra. According to the index, the cumulative price growth across the country has been 13 percent over 2017–2020. While the growth has been slow relative to the previous decade, the growth has further plummeted since mid-2019. Since the COVID-19 induced lockdown, there has been a minimal increase in the prices. Quantitatively, the prices increased by only 1 percent during 2020, and the growth rate still has not returned to the pre-pandemic levels. “We have observed that the demand has already picked up in Q1 2021 and the sector has started to show signs of recovery,” Mishra said. Online real estate portal with the global business school, Indian School of Business (ISB), said the HPI will provide monthly reports on price and quantity movement in various property markets across the country. According to the Gurugram-based digital real estate company, the HPI, created in association with the Indian School of Business’ (ISB) Srini Raju Centre for IT and the Networked Economy (SRITNE), aims to serve as a tool that tracks changes in residential home prices across India's eight major markets. “Buyers as well as policymakers are mostly forced to rely on market anecdotes and guesswork about property price movements in Indian cities in the absence of quality high-frequency data, especially locality specic data. The entire idea behind the launch of the Housing HPI is to address this issue. Aside from benetting buyers, investors and policymakers, data from our HPI will also be immensely valuable for real estate developers who are considering a new locality to launch new developments. For real estate builders, having access to information such as this has become more crucial than ever now, with the demand landscape rapidly evolving due to the emergence of the “work-from-home” concept in the wake of the COVID-19 pandemic,” said Dhruv Agarwala, Group CEO, By oering useful insights into price movement, the index could help a potential homebuyer assess the appropriate time to buy a property and at the same time assist sellers in knowing the most opportune moment to sell their assets. Policymakers and nancial analysts can also use it as a reliable estimate to keep track of the trends in the sector. Based on a survey of cities such as Ahmedabad, Bengaluru, Chennai, Delhi NCR (Faridabad, Ghaziabad, Gurugram, Greater Noida and Noida), Hyderabad, Kolkata, Mumbai and Pune from 2017 to the present, conducted every quarter, the Elara Technologies-owned company's HPI uses granular prices from localities and their corresponding weights based on transaction value share of that locality in India, basing its ndings on 1, 2, and 3-BHK apartments. Data collected for this purpose include information on price per square foot, quantity, and the total value of transactions in the previous three months for various sub-localities within each city. It also includes other details such as the number of bedrooms, construction status, and the number of inventory units. "It has been a long hauling grind for the Indian Real Estate sector to undergo a system reboot on the back of various structural policies introduced recently. In the current pandemic, the sector witnessed an increased use of and reliance on technology. The transition in the Digital Era has been quite phenomenal,” said Niranjan Hiranandani, National President – NAREDCO; Founder & MD - Hiranandani Group. Source: The Economic Times INDIA

Naredco seeks extension in building approvals and RERA timelines

5/31/2021 12:11:00 PM

Housing and Urban Affairs Secretary Durga Shanker Mishra chaired the webinar on ‘Ease of Doing Business - Construction Permit & Covid: Realty Check’ organised by Naredco. He enlightened the members about the extensive work that the government in the past seven years including development of 1.12 crore houses under the Prime Minister Awas Yojana (PMAY), the launch of the Affordable Rental Housing Complex scheme for migrant workers, the infrastructure status to affordable housing and 100 smart cities. Members of Naredco raised several concerns before the secretary to revive both demand and supply in the sector that has been badly affected by the pandemic. The association sought extension of timeline for completion of projects by 6-9 months under the realty law RERA, extension of all building permissions, rationalization of government taxes on real estate, and control of rising prices of cement and steel. Naredco has also sought reintroduction of interest subvention scheme, grant of input credit tax on GST paid in leased commercial real estate, suspension of insolvency law for some more period, and an online environment clearance system. Responding to the demand of extension of timeline for project completion, Secretary, Ministry of Housing and Urban Affairs assured that he will 'go in detail' to understand the matter and highlighted that if need be, we will take this matter to RAC (RERA Advisory Council),' he said. However, the Secretary did mention that this relief was given last year because of the imposition of the national lockdown. On high taxes levied by the central and state governments on real estate, Secretary directed the Ministry's senior officials to examine the matter in detail and mentioned, 'We will try to reduce government levies,' he said. Regarding a rise in prices of steel and cement, Secretary said he took up this issue with the Ministry's concerned and would discuss the issue again. On the PMAY, he said 1.13 crore houses have already been sanctioned and out of that, 48 lakhs have been completed and handed over to the people. The Secretary also informed the attendees of the webinar that India's ranking in ease of doing business related to construction activities improved to 27 from 186 and added that the new ranking is expected any time and expressed confidence that 'we will be in top-20'. Further, emphasizing on affordable housing, the secretary said the highest housing demand is in economically weaker section (EWS) and low-income group (LIG), and observed that the millennial also wants 2-3 BHK flats and not bungalows. The Secretary also spoke about the Central Vista Project and highlighted that the new Parliament building will be ready next year. He also rubbished criticism about this project. Commenting on the ease of doing business in real estate and challenges the sector faces due to clearance and approvals delay, Naredco National president Dr Niranjan Hiranandani said, “India has scaled up in the Ease of Doing Business Index over the recent years but much more needs to be done further to be effective. The Industry urges the government to expedite environmental and other essential building approvals through digitization and single window. The fast track of approvals can cut down project delays by nearly 18 months in Mumbai itself and help the industry to meet the deadlines targeted.” “The second covid wave has been detrimental to the recovery of the sector which geared up in H2 FY 20-21 in lieu of fiscal stimulus and booster dose to bolster the demand. Likewise, industry players suggest extending the RERA completion timelines on the back of inadequate skilled labour availability, dip in productivity as labour has to be staggered following social distancing norms and surging prices of essential raw material prices causing some delays. Lastly, the extension of PMAY schemes to benefit affordable homebuyers and bringing Rental Housing Act into force to build traction in that domain as well.” he concluded. Naredco chairman Rajeev Talwar further added that all permission related to the development of projects should be valid till March 2023. Webinar Guest of Honour, Kunji Lal Meena, principal secretary, Urban Development and Housing Department of Rajasthan, highlighted how the Rajasthan State Government has ensured that the construction work does not get affected due to the second wave of the pandemic. He informed the attendees and delegates that, in Rajasthan, advantage of a self-generated pass for the construction industry has been provided which is shared with the police so that labourers can move without any difficulty. He further added that, this has also ensured that developers in the state do not suffer due to containment zone related restrictions. Tata Housing MD and CEO Sanjay Dutt expressed concern about the abnormal price rise in cement and steel. He said steel prices have more than doubled while cement rates have gone up by 50-70 per cent in the past one year. Dutt also requested for reintroduction of subvention scheme, under which builders agree to pay EMI on the behalf of homebuyers for a certain period. Neel Raheja of K Raheja group put forward demand related to commercial real estate and sought inputtax credit benefit. Rajan Bandelkar from Naredco Maharashtra said the second wave has more impact on the sector than the last year's first wave. He requested extension of validity of approvals/NOCs including building permissions, civil aviation NOC, environment approval, etc. He also requested re-introduction of ITC in GST in real estate, removal of GST on slums/dilapidatedre-development and TDR. The webinar was attended by Ashok Mohanani, president, Naredco Maharashtra; Ashok Patni, president, Naredco Rajasthan; Suresh Patel, president, Naredco Gujarat; and Prem Kumar Polavarapu, VP, south, Naredco. Source: Construction Week Online INDIA

Real estate demand for data centres set to rise by 15-18 million sq ft by 2025, says report

5/29/2021 10:29:00 AM

Given India’s robust network connectivity, cost advantage, availability of skilled labour,low climate risk, and strong data protection laws, India is well positioned to serve as a regional data centre hub in Asia Pacic and is likely to attract signicant data centre investments, the property consultancy said in the report. Real Estate demand for data centres is set to increase by 15-18 million sq ft in the next 4 to 5 years across major Indian cities, as data centre demand is expected to touch over 2500 MW (Megawatt) across the country with the adoption of 5G, Internet of Things (IoT), Articial Intelligence (AI), increasing use of cloud services and in smart cities, said a Savills India’s report. Data Centers have been one of the real estate asset classes that has emerged as the least aected due to Covid-19 related crisis across the globe including in India, indicating their crucial role in supporting continued business activity. Indian data centre market is likely to exhibit a higher growth rate than the world average, the report said. Data centres in India currently occupy over 7.5 million sq ft area consuming over 650 MW power, while more than 8 million sq ft and 870 MW capacity of data centres are under-construction, and are likely to be online between 2021- 2025. With proposed development of over 10 million sq ft for 1200 MW, the country is on its path to achieve 3000 MW data centre capacity in near future. Given India’s robust network connectivity, cost advantage, availability of skilled labour, low climate risk, and strong data protection laws, India is well positioned to serve as a regional data centre hub in Asia Pacic and is likely to attract signicant data centre investments, the property consultancy said in the report. However, Indian data centre market is still at its nascent stage compared with some of the developed nations such as the USA, United Kingdom, Germany and Japan. As of February, India has 123 data centres compared with 2,653 in the USA, 451 in the United Kingdom, 442 in Germany and 199 in Japan. “The government’s proposed data centre policy is likely to augment investment in the sector, boost digital economy and improve the country’s required infrastructure to cater to the growing digital consumption. India’s data localization laws, increasing adoption of Cloud technology, and everincreasing use of E-commerce, digital transactions and social media will result in increased demand of data thereby, pushing the need for data centre and cloud services in the country,” said Niraj Karale, Director & Head, Data Centre Services , Savills India. At present, the data centre industry is buoyant in cities such as Mumbai, Chennai, NCR, Bengaluru and Hyderabad. Kolkata and Pune are some of the key upcoming cities with demand across these locations going up due to improved network connectivity, digital transformation, initiatives by the local governments and proximity to customers. India is increasingly seeing a big opportunity in Edge Data Centres. The Smart City initiatives, adoption of 5G, Internet of Things (IoT), Articial Intelligence (AI) will drive this demand. Savills anticipates tier II cities such as Ahmedabad, Bhubaneshwar, Coimbatore, Jaipur, Kochi, Lucknow Nagpur, Vizag, etc. to see investments towards Edge Data Centres. The high upfront costs, higher power taris, maintenance-related issues, security and high real estate costs are increasingly tipping the scale in favour of third-party data centre operators. Many data centre operators are investing in the development of data centres in India. Additionally, major cloud service providers are also exploring setting up their own data centres. India holds immense potential to become a data centre hub in APAC owing to its strategic location, availability of high bandwidth speed, lower power taris and presence of hyperscalers. Additionally, the availability of state-of-art infrastructure is likely to fuel the growth of India’s Data Centre market. New business models are likely to emerge including hybrid cloud services, pay-peruse utility model, built to suit, etc. Source: The Economic Times INDIA

Time For RERA 2.0 – Regulation And Development

5/28/2021 12:00:00 PM

The introduction of RERA revolutionised the sector, lets understand how and what is the way forward Introduction of RERA act was meant to disrupt the modus operandi of the unorganised real estate and regulate it as an organised industry. This revolutionary law helped form an intrinsic guideline for all the concerned stakeholders to adhere nationwide. Today, RERA has enabled us to build trust, brought transparency in roles and practices, and held the stakeholders accountable for their actions. The rule book has chalked out clear boundaries for promoters, developers, real estate agents and home buyers. It plays a pivotal role in the entire project life cycle from registration to delivery RERA’s aim: RERA aimed at laying down the blueprint to make real estate transactions more financially disciplined with compliance mechanisms in place. The goal was to protect the interest of home buyers and foster an investment friendly climate for the sector. Being the first regulator, it created a level playing field advocating the credibility of the industry globally. RERA aimed to assist customers with well informed decisions by directing the developers to exhibit correct information, define carpet area, streamline redressal system, display project amenities, mention the date of registration and possession, obtain approvals, standardise the agreement clause etc. The tech-savvy process of online uploads, registration, and filing even a complaint was a successful move in the digital world Financial Armour: Introduction of 70 per cent Escrow mechanism in RERA was a game changer. It primarily aimed to monitor financial checks and protect diversion of funds. This was a step in the right direction that ensured timely delivery of homes without any unduly delay. This regime has increased the need for liquidity by the developers Important Achievements: As a result, we have more than 59,600 Projects registered across the country, 46,700 Agents and more than 60,700 Complaints disposed. More than 59 lakh homes accommodating 2.4 crore citizens have been registered and are being monitored through RERAs across the country. Asymmetrical Implementation: Land being the state subject, RERA has been implemented dissimilarly across different States and Union Territories. Industry is made up of millions of micro markets spanned nationwide and each has its own stage of development, different way of functioning and transacting. Given these differences, adopting the new regulatory framework and system has been achieved at different velocity across different states. Practical Resolution Mechanism for Home Buyers: Home buyers in Maharashtra found the regulatory system advantageous to resolve disputes under an alternative platform of RERA Conciliation Forum. The legal remedies remain; but this fast option, which effectively, is an ‘out of court’ system under the regulatory framework, has worked out well. It has brought out in Maharashtra, a spirit of solving problems that impact home buying rather than finding fault and apportion blame – and that to my mind, is the best result anyone could have hoped for. This provision augurs well for both developers and the homebuyers. Scope of Improvement: RERA has become an integral part of the real estate sector and holds a huge potential and an equally great scope for growth. RERA is a work in progress evolutionary law, where industry stakeholders keep on improving with periodic reviews. Two foremost areas of improvisation would be to simplify the approval process with single window clearances and holding related planning and approval authorities whose acts of omission and commission delay projects as equally responsible. Future Roadmap: Now it is time for RERA 2.0, an act for not just Regulation but also Development of the Sector. It is now time for the authorities to drive implementation, facilitate the growth and promote a healthy, efficient and competitive real estate sector by, Ensuring time bound approvals and clearances Promote environmentally sustainable and green buildings Encourage investments in the real estate sector Get ancillary sectors in a formal network and encourage labour welfare. Identify policy gaps and drive those including encouraging Affordable Rental Housing, Conclusive Land Titling, Slum Redevelopment etc. India is witnessing large scale migration to urban areas. Cities enjoy economies of agglomeration, where higher density of population provides businesses with greater opportunities for growth. As the economy grows, the market opportunities grow for every strata of the society. Hence there is a skewed interest towards emphasising on the rapid urban development and affordable housing to accelerate growth of India’s economic cogwheel. As a multiplier effect, it shall help to achieve the objective of $5 trillion economy and ‘Housing for All’ RERA has been a dynamic regulatory regime; going ahead, it must be flexible to adapt to changes in sync with the economic scenario as also the industry. Real estate is one of the largest employment generating industry by employing nearly 15 per cent of the workforce and contributes about 7 per cent to the country’s GDP. The industry is poised for bullish growth in the long run as the GDP grows and improves the nation’s wealth creation with its ‘domino effect’ on 270 auxiliary industries. Source: Times Property INDIA

India's flexible space segment to grow by 10-15% in next three years: Report

5/24/2021 2:31:00 PM

The report highlights that as of Q1 2021, Bengaluru holds a flex stock of 11.6 million sq ft which is the maximum in the country, followed by Delhi-NCR at 6.6 million sq ft and Hyderbad at 5.7 million sq ft. NEW DELHI: India's flexible space stock is expected to grow by 10-15% year-on-year from the current 36 million sq ft in the next three years, according to a report by CBRE. The report highlights that as of Q1 2021, Bengaluru holds a flex stock of 11.6 million sq ft which is the maximum in the country, followed by Delhi-NCR at 6.6 million sq ft and Hyderbad at 5.7 million sq ft. While these cities, along with Mumbai will continue to see further demand, flex demand in cities like Pune and Chennai are also expected to see growth in the coming years. In 2020 alone, over 75,000 seats were leased in flex spaces across India. Anshuman Magazine, chairman, India & South-East Asia, Middle East & Africa, CBRE, said, "The pandemic influenced the way businesses function, and their overall strategies. Businesses are evaluating new working models that keep workplace flexibility at the centre, balancing employee benefits and business profitability. These models will not only ensure flexible working, but also ensure employee safety once offices resume normal operations. The demand for physical office spaces will continue to rise as employee look forward to normal work days; with mass vaccination propelling further sectoral growth." To improve their product offering, landlords may consider getting into ‘strategic’ partnerships with operators or creating their own brands to cater to the demand for flex spaces in their portfolio. Tier 2 and 3 markets are also expected to witness an increase in flex demand. Tier 2 activity is expected to be dominated mostly by domestic operators during the next couple of years. On the other hand, operators may emphasis on higher flexibility and innovative solutions/deal structures such as reverse officing, fit-outs as a service, pay-per-use models, all access products, etc. among others. Source: Economic Times INDIA

Pandemic has led to surge in NRIs buying homes in their native country:

5/23/2021 11:54:00 AM

The current pandemic has paved way for a lot of NRIs returning to their home countries. This has led to the need of owning a house in their native countries. With a weaker rupee and lower interest rates for housing loans there has been a surge in NRI investment in real estate sector according to the data available with To understand the trend of NRI home buying activity amid Pandemic, surveyed 700 NRIs using phone and email interaction. Through this survey it observed that the NRI’s prefer larger homes in integrated townships, which offer lifestyle features similar to what they have experienced while being expatriates in a foreign country. This populace is either investing in ready-to-move properties which reduce the construction risk. The survey data shows 40 per cent growth in interest in gated community in past one year in Mumbai city. As gated communities offer more security, ease of living. Nowadays, due to the pandemic that has spread, safety is paramount and gated communities are more in demand not just by NRIs but even by non-NRIs. Amit Agarwal, Co-Founder & CEO, NoBroker said, "Ever since the first wave of the pandemic, we have observed an increase in interest from the NRI community. Initially, it was due to the safety aspect as India was one of least hit companies in the first wave and later also because the government announced many policies and measures that made home-buying more affordable. Weakening of the rupee added another shot in the arm for NRI buyers." "Most NRI buyers are looking for a society accommodation due to the security and hassle-free living offered through society apps and also because these units are easy to rent out if end use is not the current priority. It is easier to do research on the project and the builder especially when one cannot physically visit to ascertain quality and credibility. Given the push by the government and the builders to revive the industry, this surge is estimated to continue throughout this year." The survey results further shows, in Mumbai, the preferred average ticket size ranges from 70-75 lakhs for 1BHKs; 1.2 to 1.8 Cr for 2BHKs and 2 Cr and upwards for properties with 3BHKs and more. Also, the platform has observed maximum demand from buyers in the USA. An NRI homebuyer named Nigama Varshney says, "It was a great experience using NoBroker for buying property in Mumbai. Compared to rent, there are many more questions and doubts when the decision is about buying the property. The platform helped us make the decision. We wanted to buy a house in Mumbai since we plan to return to India a few years later. Property prices have stabilised now and hence we took the decision to go for a gated community with amenities for us and our kids." Source: Free Press INDIA

Rural Housing demand for mid-range and higher ticket sizes continues to increase: Report

5/22/2021 12:06:00 PM

The housing loans market has grown at a 3-Year CAGR of 6.5 per cent. The Housing loan industry witnessed a 10.4 per cent growth in portfolio outstanding (PoS) in Dec'19 over Dec'18. Housing Loans sourcing witnessed strong growth in Q3 and Q4 of 2020. Almost 50 per cent of all loans sourced in the year was in the last 3 months of 2020. CRIF High Mark, leading credit bureaus in India has released the CRIF CreditScape: Housing Loans. The report provides insights on the home loans space and notable trends across geographies and yearly data. Some of the key trends that emerge from this study include, the housing loans market has grown at a 3-Year CAGR of 6.5 per cent. The Housing loan industry witnessed a 10.4 per cent growth in portfolio outstanding (PoS) in Dec’19 over Dec’18. Vipul Jain, Head of Products, CRIF High Mark says, “Housing Loans sourcing witnessed strong growth – Pent-up demand, lower interest rates, favourable government incentives and discounts from developers, helped in the sector’s growth. Home Loan lenders continue to be bullish about this sector. Affordable Housing (loans up to Rs 35 lakhs) contributed to 82 per cent of sourcing volumes with growth driven by Tier II and Tier III cities.” Housing Loans Market Despite the Covid19 pandemic, growth in Dec’20 over Dec’19 was 9.6 per cent. Experts say that the recovery was largely due to a huge rebound in originations in Q3 FY 2020-21. As compared to 6 per cent in Q3 FY 2019-20 (pre-Covid 19 level) Q3 FY 2020-21 witnessed 28 per cent Q-o-Q growth in disbursements. Industry experts believe that Q4 FY 2020-21 is also expected to end on a positive note with disbursements showing tremendous growth. Active housing loan borrowers base as of Dec 2020 stands higher than pre-pandemic levels in Dec 2019, Y-o-Y growth of nearly 5 per cent. Affordable Housing Segment As of December 2020 affordable Housing Segment constitutes 60 per cent of the market by value and nearly 90 per cent by volume. Affordable Housing Segment (ticket size up to Rs 35 lakhs) constitutes 90 per cent of the market by volume and nearly 60 per cent by value as of December 2020. The report stated, within the affordable segment, volume growth in loans of Rs 15 lakhs – Rs 35 lakhs over the last 4-5 years, coupled with an increasing share in overall originations across rural, semi-urban and urban segments indicate shifting preferences of buyers towards higher ticket sizes. Steep recovery has been seen in Q2 and Q3 FY 2020-21, with around 80 per cent of the demand (volume) coming in from the affordable segment. It also stated that rural housing demand for mid-range and higher ticket sizes also continued to increase over the last 5 years. Young borrowers and millennials According to the report, young borrowers and millennials (age group below 36 years), with high aspirations and commensurate disposable incomes are increasingly being seen as an attractive audience for housing loans, with a share of 27 per cent in the annual originations in FY 20-21 (till Dec 2020). Average ticket size of home loans given to millennials and young borrowers also continued to increase over the last 5 years, with a CAGR of 6.2 per cent. The report further states that the public sector Banks have retained the largest market share in housing loans. Over the last 3 years, public sector banks have been the largest players in terms of value and volume with a near 45 per cent share, dominating affordable and mid-range segments. On the other hand, private banks have a relatively smaller share of 17 per cent by value. As of December 2020, the top 5 private banks constitute 15 per cent of the HL industry book by value. Geographically, Mumbai, Delhi NCR, Bangalore were the top 3 housing loan markets. Mumbai and Delhi displayed high delinquencies as of December 2020. Tier II and III geographies had a higher annual growth rate in HL book compared to metros with a large part of the growth coming in from the affordable and mid-market segment. As of Dec 2020, within Tier-II cities, the top 10 cities by portfolio size constituted 37 per cent of the Tier II market, Surat being the largest market in Tier II. Vishakhapatnam and Coimbatore among the top 10 cities, had the largest Y-o-Y growth of over 10 per cent. Vishakhapatnam reported improving amount delinquencies (90+ DPD) by 11bps over the previous year while Coimbatore saw a jump of only 13 bps. Lucknow and Coimbatore state reporting the highest average ticket size of HL at Rs 18.03 lakh and Rs 17.17 lakh respectively. Source: Financial Express INDIA

Housing loan market grows by 9.6% in December quarter: Report

5/21/2021 12:39:00 PM

The portfolio outstanding of the sector stood at ₹22.26 lakh crore as of December 2020, as compared to ₹20.31 lakh crore as of December 2019 Mumbai: The housing loan market in the country witnessed a rebound and registered a year-on-year growth of 9.6 per cent in terms of portfolio outstanding (PoS) in the third quarter of FY2021, despite the COVID-19 pandemic, says a report. The portfolio outstanding of the sector stood at ₹22.26 lakh crore as of December 2020, as compared to ₹20.31 lakh crore as of December 2019, according to a quarterly report released by credit information bureau CRIF High Mark. The industry had witnessed 10.4 per cent growth in PoS in December 2019 quarter over December 2018 quarter. The report said the growth was flat in quarters ending March 2020, June 2020 and September 2020 due to COVID-19 pandemic, the resulting nationwide lockdown and suspension of most of the business and lending activities in large parts of the country. "However, there has been a rebound in housing loan originations in the quarter ending December 2020, leading to 4.52 per cent growth in portfolio outstanding," the report noted. Affordable housing segment (ticket size up to ₹35 lakh) constituted 90 per cent of the market by volume and nearly 60 per cent by value as of December 2020. Within the affordable segment, loans under ticket size of ₹15 lakh comprised 70 per cent by volume and 38 per cent by value. According to the report, young borrowers and millennials (less than 36 years), with high aspirations and commensurate disposable incomes are increasingly being seen as an attractive audience for housing loans, with a share of 27 per cent in the annual originations in FY20-21 (till December 2020). Public sector banks have retained the largest market share in housing loans by value and volume, with a near 45 per cent share over the last three years. As of December 2020, the top five public sector banks constituted nearly 30 per cent of the housing loan industry book by value, the report said. As of December 2020, top five private banks constituted 15 per cent of the industry book by value, the report said. Housing finance companies (HFCs) command an overall market share of nearly 37 per cent by value. The top five (out of the nearly 140) HFCs (including non-banking financial companies) as of December 2020 constituted 27 per cent of the pan-India housing loan book, it said. The report further said there is a steady increase in housing loan delinquency across borrower age groups. Default rates are lowest in above 45 year age groups followed by 26-45 year age groups. "Default rates are highest in less than 25 year age groups," the report said. Amount (in value terms) delinquencies by 90 DPD (days past due) in housing loan book stood at 2.49 per cent having increased across all segments of ticket sizes, the report said. Within the affordable segment, less than ₹10 lakh ticket size loans have the largest amount of delinquency at 4.44%, it said. HFCs, including non-banking financial companies, have the highest delinquencies, largely due to the stress in the less than ₹15 lakh ticket size book, the report said. Source: Mint INDIA

Resurgence of Indian real estate after a year of pandemic

5/20/2021 11:41:00 AM

Today, the second wave of coronavirus has imbued uncertainty in the sector resulting in a temporary pause, but developers are now better prepared and well-versed with the know-hows of a pandemic. India’s resilient and burgeoning real estate segment has always remained an investor’s favourite, and one of the most sought-after realty markets globally. The growth potentials are such that the segment is poised to account for 13% of India’s economy by 2025. A major wealth creator and one of the largest employment generating sectors, it has undoubtedly feared unwanted consequences at the onset of the pandemic last year, but predicting the challenges early and injecting quick reforms – which included financial assistance including loan moratoriums, stamp duty cuts and tax reliefs through conducive government policies and comprehensive and well-calibrated strategies — helped the sector continue its growth even after a temporary pause in 2020. The onset of pandemic followed by a stringent nationwide lockdown imbued huge challenges before the sector, bringing it to a temporary standstill. Same sentiments were reflected in a report that informed only 19,038 units were sold across India’s eight key property markets during Q2 2020. Similarly, only 12,564 units were launched during this period across the same markets. The sale of residential properties declined by 79% annually and new supplies dipped by 81% in 2020. Furthermore, a dip in sales and supply of commercial spaces was witnessed during the shutdown. Foreseeing the perils of the pandemic early, the governments made quick and important decisions and announced relief measures. The Prime Minister boosted the morale of the stakeholders by launching the Aatmanirbhar Bharat campaign, which was strengthened by RBI’s announcement of loan moratoriums. Stamp duty cuts, reduction in loan rates largely aided the developers during the volatile times. Strategies were re-envisioned quickly by adapting digitization and reaping benefits from emerging concepts like work-from-home model, remote offices, second homes, big spaces, etc. Ease in investment opportunities through flexibility in REITs and tax reliefs boosted market sentiments and today, the sector is on its road to recovery with homebuyers and investors returning to the market. A mix of factors like increased demand, low-interest rates, better household savings and government support catapulted growth. The top 7 cities of the country staged an impressive comeback post lockdown last year. A recent report also confirms the fact that housing sales in 7 cities increased by 29% and new launches by 51% during this quarter against the corresponding period in 2020. Delhi NCR, Mumbai, Bengaluru and Pune together accounted for 83% of the sales in the quarter. The performance of micro-markets in the Delhi-NCR region, including Noida and Gurgaon, witnessed a double-digit expansion in property appreciation prices with 11% and 13% growth respectively. Real estate has always remained resilient, and buyers look at the segment also as a long-term investment. Developers during this ideal time took advantage of the pent-up demand to clear most of the unsold inventories. With sensible pricing, buyers too stepped out to invest in homes. The demand picked up with them coming forward to reap benefits of the reduced demand and increased negotiation potential, and strong interest from sectors such as technology, banking, financial services, and others. Tech-enabled systems, increased momentum of operations, demand for bigger flat sizes and independent floors and new trends are making the market look promising for the next coming quarters. Today, undoubtedly the second wave of coronavirus has imbued uncertainty in the sector resulting in a temporary pause, but developers are now better prepared and well-versed with the know-hows of a pandemic. The Indian real estate sector is now a buyer’s market, and the ongoing inoculation program is boosting the confidence of homebuyers. It is most likely that the sector will resume its growth from Q2 of FY 2021-22. We will see a steady flow of investments that will ensure growth opportunities with higher returns. The halt will be short-term and cheers and confidence in the market will return as soon as we successfully bend the Covid curve. Source: Financial Express INDIA

All time-low home loan rates: A never before opportunity for homebuyers

5/19/2021 11:38:00 AM

If rising housing affordability is any indication, India's residential real estate market will see increased sales in the coming months. The current home loan rates are the lowest in four decades and are expected to remain low for another six to twelve months; thus, now is the best time for homebuyers to purchase. The growth in the economy and real estate has been sharp, but the second wave of COVID might affect the market. At this time, the magnitude of the impact cannot be predicted, but the chances of it being minimal are high. Factors such as the RBI injecting much-needed liquidity into the market, as well as numerous government and developer concessions such as stamp duty exemptions, have extended the best buying opportunity for homebuyers. For lending purposes, banks are now distinguishing between strong and poor developers, so improving balance sheet efficiency, avoiding over-leveraging, and remaining well-capitalized would help developers float well in the market. As India’s Coronavirus vaccination campaign continues, the benefits of the vaccination program can be seen in the country’s real estate market. Following a record low in the previous two quarters due to a drastic increase in the number of infections, home sales in India’s prime residential markets increased by nearly 70% in the third quarter, with new supply also increasing significantly. Despite the general gloom, housing prices in key markets have begun to recover, indicating that consumers have recognized real estate’s value and want to take advantage of low home loan interest rates. Interest rates indeed significantly impacted the sales growth since the end-user had been anticipating it and had received it. If rising housing affordability is any indication, India’s residential real estate market will see increased sales in the coming months. In 2021, the new housing supply will continue to be affordable and mid-segment as developers try to capitalize on high pent-up demand. However, there is speculation that the demand for residential real estate in India may be jeopardized due to the sharp increase in new coronavirus cases in India. As a result of the increase in cases, a large portion of India, especially Delhi, Maharashtra, Rajasthan, Odisha, and Gujarat, is now under restrictions, including part-lockdowns, weekend lockdowns, and night curfews, among other things. The second wave of the Covid-19 pandemic is causing concern in the sector. There would be no problem if logistics and supply chain support are available and migrant labor on site. Homebuyers can currently get home loans for as low as 6.65 per cent annual interest, despite the RBI’s decision to keep the repo rate unchanged. In January 2020, the average home loan interest rate was 8%, which is a significant difference. However, buyers should make a quick decision of purchasing a home because the situation could change if the banking system’s stance changes. Despite the RBI’s decision to keep policy rates unchanged on April 7, 2021, SBI increased home loan interest rates in April, indicating that banks might be moving away from the current historically low-interest rate regime. Due to the effects on demand, price growth in residential has also slowed in the last year. Even though they are feeling the heat of rising raw material costs, developers have refrained from raising prices. Overall, the market is ideal for homebuyers to realize their dreams before the market returns to the old interest rate regime and developers raise prices, which is expected to happen in the next 6-12 months. Source: Financial Express INDIA

High Court upholds reallotment of plot in Aerocity scheme

5/18/2021 12:41:00 PM

The Punjab and Haryana High Court has upheld the reallotment of a residential plot in the Aerocity scheme to an allottee, who could not deposit the initial amount following unfortunate circumstances. The judgment is significant as one of the grounds taken by Greater Mohali Area Development Authority (GMADA) to challenge the order of reallotment after condoning the delay in the payment of initial money was that the property prices had escalated. The Bench of Justice Ritu Bahri and Justice Archana Puri ruled that increase in the price of a plot was no ground to act against the allottee. The matter was brought to the High Court’s notice after the GMADA Estate Officer filed a petition for quashing an order dated December 24, 2015, passed by the Revisional Authority-cum-Additional Secretary to the Government of Punjab, Department of Housing and Urban Development. The Bench, during the course of hearing, was told that the Additional Secretary had set aside the cancellation of letter of intent by condoning the delay in depositing 15 per cent of the tentative price of the plot. The Bench was also told that a letter of intent was issued to Bachittar Kaur after she was successful in the draw of lots for a plot measuring 125 square yards. She was required to deposit 15 per cent of the total amount within 30 days from the issuance of the letter. In an affidavit, she specifically stated that her husband was bitten by a stray dog, following which he was treated at Government Multi-Specialty Hospital in Sector 16. Thereafter, she met with an accident and suffered grievous injuries. The Bench observed that the competent authority, GMADA, accepted a demand draft dated January 13, 2020, for Rs29,93,378 after reallotment of the plot and during the pendency of the writ petition. The Bench added: “A perusal of the order shows that the authority had taken the right decision in condoning the delay in depositing 15 per cent of the tentative price of plot…. No ground to interfere in the order dated December 24, 2015, is made out as the competent authority exercised its power to condone the delay in exceptional circumstances and restore the plot”. Source: Tribune PUNJAB & HARYANA

Rajasthan housing department fixes norms to ensure homes for poor

5/17/2021 11:19:00 AM

The urban development and housing (UDH) department has tightened its noose around those developers who are hesitant to provide houses to the Economically Weaker Sections (EWS) and Lower Income Group (LIG) in their schemes as per the mandatory norms. Now, it will not be easy for developers in the state to not construct houses for the EWS and LIG in their schemes. As per the township policy rules, builders or developers launching a group housing scheme or high-rises must construct houses for EWS and LIG categories. Till date, no project has been cancelled and developers who have defaulted have not initiated construction. Sources said, developers had shown apprehension to construct houses for the poor on premium land and in schemes. Following this, relaxation was provided to construct houses for EWS and LIG category on some other project land. However, many have not adhered to the policy. After the new rules, developers cannot construct EWS and LIG houses at distant locations. An official said, the civic body provides relaxation in land conversion, building map approval and other charges to developers for constructing houses for EWS and LIG category. In return, the private builders have to develop schemes and invite applications through lottery in the presence of representatives of local bodies. “If a developer was constructing apartments in a posh locality, then he would provide houses to EWS and LIG sections in far-flung areas. However, as per new rules, it would be mandatory to provide houses in 800 metre periphery of the main project,” said the official. After receiving several complaints, the Jaipur Development Authority (JDA) also constituted a panel of chartered accountants to audit the houses and plots constructed under various provisions of the Chief Minister Jan Awaas Yojana. The zone commissioners were directed to monitor the houses and plots constructed under the scheme. Strict rules were framed after it was observed that many developers are not constructing houses. Source: Economic Times RAJASTHAN

NAREDCO urges UP CM to provide relief to real estate developers amid pandemic

5/16/2021 11:20:00 AM

Noida (UP), May 12 (PTI) Real estate body NAREDCO on Wednesday said it has requested Uttar Pradesh Chief Minister Yogi Adityanath for an 18-month interest-free period for developers for clearing outstanding land dues, lease rent and other payments amid the second wave of the COVID-19 pandemic. The National Real Estate Development Council (NAREDCO) has also sought extension of time period for completion of projects, among other relief measures to mitigate problems in completing construction and handing over possession of flats to allottees. In a letter to the chief minister, NAREDCO UP Chairman R K Arora said the real estate industry, in spite of its vast potential and capabilities to support the economy, has been "neglected" at all levels and has been the "victim of all adverse situations". "Construction at the real estate projects has always been the first casualty for the environmental issues, ground water level issues, Master Plan issues, legal issues, labour exodus, and now the pandemic COVID-19, as a result of which almost all the projects are delayed causing cost escalation, liquidity crisis, defaulted land payments and the project loans becoming NPA," he stated. Arora said the delay in completion of these projects have resulted in agitation by homebuyers and large number of complaints in different fora like RERA, consumer forums and civil courts, which are imposing heavy fines on developers. Putting forward NAREDCO UP''s demands, he urged the chief minister to issue directions to the industrial development department/authorities to allow relief to the sector, treating the pandemic as a "National Natural Calamity". The demands included an 18-month interest-free period (zero period) on the dues to the Noida, Greater Noida and Yamuna Expressway Authorities from allottee developers against construction days lost on account of the pandemic. "Withdraw the demand of time extension charges on all projects which have obtained occupancy certificate of minimum requirements of total FAR of allotted plot as per building bye laws," the NAREDCO letter stated. The industry body also batted for tagging of authorities dues with sub-lease permission flat-wise on pro-rata basis, besides withdrawal of increase in rate of lease rent. PTI KIS ABM ABM Source: Outlook NOIDA

Maharashtra offers 1% stamp duty concession for women buyers

5/14/2021 11:19:00 AM

The Maharashtra government, in its budget for 2021-22, announced a concession of 1% over the prevailing stamp duty rate on property transactions, if the transfer of house property or registration of sale deed, is done in the name of women. The announcement was made by deputy chief minister Ajit Pawar, on March 8, 2021. Consequently, women buyers will now pay only 2% of the property value as the stamp duty. The move has been welcomed by the industry. “Majority of women are buying homes now, not only as an investment but also for financial security. This step by the government, ratifies their support towards female home buyers. It will also help provide security to dependent women, as more men will buy houses in the name of the women in their families,” said Ram Raheja, director, S Raheja Realty. “Modern-age women portray strong desirability to own a home and the rebate in stamp duty is a great move that will boost housing sales and make women take the leap from being home-makers to bread earners and now, proud home owners,” said Raunika Malhotra, president, marketing and corporate communications, Lodha. “Women have long been recognised as an important part of the decision-making, when it comes to selecting a home. Today, women are independent, empowered, educated and employed. The state acknowledging this and making way for women to be more empowered, is a move in the right direction. The announcement in the state budget, on reduction in stamp duty for women home buyers, has come as a perfect celebration for Women’s Day, which will encourage them to invest in real estate,” said Shraddha Kedia-Agarwal, head, marketing and sales, Transcon Developers. “The government has taken measures to encourage women to invest in real estate, by providing concession on stamp duty, if any house is purchased solely in the name of the woman. It is a pleasant coincidence that the measures given to women in real estate came on Women’s Day,” added Himanshu Jain, VP, sales, marketing and CRM, Satellite Developers. However, in spite of the intense demand from the industry, to continue with the temporary stamp duty rate reduction that expired on March 31, 2021, the state has withdrawn the benefit. Consequently, buyers will now pay 5% stamp duty on property purchases, beginning April 1, 2021. The 1% reduction offered to women buyers will, however, continue. Recall here that during the period for which the stamp duty reduction remained in effect, housing sales increased month-on-month in the state. Data available with the Inspector General of Registration (IGR), Maharashtra, show that during the period between September 2020 and March 2021, when the stamp duty cut was effective, as many as 80,718 properties were registered in Mumbai alone, a growth of 114% against the same period last year. “On behalf of the real estate fraternity, we urge the government to extend the reduced 3% stamp duty charges for another two quarters, so that we can continue to encourage the home buyers to invest in their dream homes,” Ashok Mohanani, president, NAREDCO-Maharashtra had said earlier. Source: Housing.Com MAHARASHTRA

Strong, Well-Structured, Protective: Real Estate, As It Should Be!

5/13/2021 11:50:00 AM

Real Estate, often dubbed to be one of the safest investments in the world, has shown exactly why it has garnered the reputation it holds despite several industries suffering from Covid’s conquest of the market. Be it land, residential, industrial or commercial spaces, Real Estate agencies believe that the industry has the potential to persist its customary pace, if not experience a boost in the present times. Talking about residential estate, the most familiar one; offering houses for a nuclear family, residential apartments, townhouses and condominiums, is expecting a hike given the unrest in the residential preferences in the lives of people post Covid-related agitation. On the other hand, the sudden surge in the increasing demand for Covid-care facilities, hospitals, isolation centres, drug manufacturing units, oxygen plants, logistics warehouses etc has significantly turned the Industrial and the Commercial estate into go-to places for both, the state and the capitalists. Conversing the emerging trends in the residential estate, the preferences has substantially shifted recently. For instance, living spaces with ample amount of basic amenities attached are being demanded keeping Covid protocols in mind. Similarly, workspaces have been redesigned and rearranged, keeping both the employers’ and employees’ welfare in mind. Given the economic crisis the nation experienced recently, it was understandable that the Real Estate saw a marginal downfall but now that the masses have started to live with the pandemic while taking ample measures to protect their loved and dear ones, they’ve finally started investing in better residential spaces that’ll offer much more protection than their orthodox counterparts they’ve been residing in lately. In a nutshell, keeping no doubts over the potential the real estate possesses, it has been noted that while there’s a steady recovery in the demand for residential spaces, a boost has been experienced in the demand of services offered by land, commercial and industrial spaces despite the unusual times. Stats show, around 15% of the total jobs in India are generated by the real-estate sector. Also, this implies, every one of the auxiliary businesses that take into account building homes or anything, indicating a surge of demand among the middle-income and the upper-middle-income groups as they prepare to purchase their fantasy houses. Because of plans like Pradhan Mantri Awaas Yojna and the splendidly made RERA endorsed projects, which act like the catalysts in the entire process! Additionally, the Indian rental real estate market will undoubtedly develop with the developing flood of transients from non-metro to metro urban communities. This has definitely expanded interest for moderate rental spaces in vicinity to the functioning spaces or instructive organizations and the development of the idea of co-living. It will not be wrong to presume that the property costs will doubtlessly see a hike and move the market development through 2025, particularly in the setting of Tier 1 urban communities. Source: Business World INDIA

Demand for luxury housing improves in Delhi-NCR amid price fall, low interest rates

5/12/2021 4:17:00 PM

The circle rates in Delhi should be rationalised as market prices are 30-40% lower than the circle rates, say industry experts The demand for luxury housing properties in the national capital has improved in the last six months on low prices and home loan interest rates, but there is a need to reduce stamp duty to give a further boost, according to industry experts. Addressing a webinar on luxury housing market of Delhi-NCR, India Sotheby's International Realty CEO Amit Goyal said the circle rates in Delhi should be rationalised as market prices are 30-40% lower than the circle rates. Rahul Bhargava, Joint General Manager, HDFC Ltd, Anubhav Jain, CEO, Silverglades Group and Ravinder Singh Ahuja, CA, Founder RS Ahuja & Co also participated in the webinar. “In the last 8-9 years, property prices have only come down. So, it’s high time that the circle rates are rationalised now. I wish there is a stamp duty cut, just like how it was done in Maharashtra and some other states. Even internationally, countries such as the UK and Malta did the same," he said in a statement. Maharashtra and Karnataka governments have reduced the stamp duties on registration of properties. Last month, the Delhi government had reduced the circle rates of residential, commercial and industrial properties by 20% for the next six months, but industry players made a case for further rationalisation. Goyal said demand is much greater than supply in the market today, due to pent-up demand, low interest rates, an all-time high equity market. "There is some amount of profit-booking happening from other asset classes, and money is flowing into real estate," he said. Goyal said property prices have not appreciated over the last decade and rather have come down. “Location has become important post lockdown because people are putting emphasis on upgrading lifestyles. They don’t want to travel too much for work and leisure," Jain said. Bhargava said the loan disbursements have surpassed pre-COVID numbers. "April-May disbursement was negligible, but now, we have surpassed our pre-COVID numbers, and we can see this trend will continue," he added. Ahuja said the property prices and interest rates are at the lowest, which has created a very attractive and positive environment. Goyal said the maximum demand is in ₹15-25 crore bracket and the top three markets are Sundar Nagar, Jorbagh and Shantiniketan in the national capital. HDFC Home Loans and India Sotheby's International Realty are jointly organising Delhi Luxury Home Fair 2021, an online property show from March 6-21. The show will exhibit luxury properties including ready-to-move-in homes and new developments across Delhi NCR in a price range of ₹5 crore to ₹150 crore. Source: MINT DELHI-NCR

Banks line up offers for buyers amid scramble for home loans

5/10/2021 11:04:00 AM

Low interest rates and shift to remote working have driven the growth of home loans Indian banks are jostling to disburse home loans, having tasted success on this front in a tough economy. The aggregate home loan portfolio of banks grew 9.1% in the year till 26 March to ₹14.59 trillion. While this was lower than the 15.4% growth seen a year ago, it marks an improvement after the plunge in the first few months of the pandemic. Senior bankers attributed the growth in home loans to low interest rates and the shift to remote working. As work-from-home becomes the norm, people can buy houses far from expensive office centres. Banks are increasingly focusing on the segment, sensing the opportunity and realizing the need for more secured loans on their books. After the collapse of Dewan Housing Finance Corp. Ltd (DHFL), there has been a stronger movement of home loans towards banks, C.S. Setty, a managing director at State Bank of India (SBI), said. The central bank had referred DHFL to the insolvency tribunal in November 2019, following mounting stress at the mortgage lender. The Piramal group recently won a bid to take over the lender and is now awaiting regulatory clearances. “So, it is a combination of banks willing to do more secured loans, and the underperformance of some of the major non-banking financial companies (NBFCs) that has led to an increase in the portfolio of bank home loans. This asset class will definitely be pursued by everyone as they see value and security in it," Setty said. SBI has a 35% share in home loans among all commercial banks. The lender, which has a home loan portfolio of ₹5 trillion, plans to double it in the next five years. At private sector lender Axis Bank, home loan disbursements jumped 73% year-on-year (y-o-y) as of 31 March, the sharpest disbursement growth within the secured segment. “Our home loan logins and disbursements for Q4FY21, touched highest ever quarterly numbers, driven by improved rigour and rhythm and reduced turnaround times as a result of project initiatives," Amitabh Chaudhry, chief executive, Axis Bank told analysts on 27 April. Kotak Mahindra Bank, another privately held lender, saw a 13% growth in home loans and loans against property (LAP). It has reduced the relative size of its unsecured book to 5.8% of the loan book in FY21 from 7.5% a year ago. Source: Live Mint INDIA

RBI's decision well-timed: Industry

5/9/2021 12:44:00 PM

The RBI's decision on supporting small businesses and priority loans to COVID-related health infrastructure are well-timed and propitious as the pandemic is posing new challenges for the economy, according to industry. The RBI on Wednesday allowed certain individual and small borrowers more time to repay debt and allowed banks to give priority loans to vaccine makers, hospitals, and COVID-related health infrastructure as it announced support measures to cushion the pandemic's blow on the the economy. Industry chamber CII said that opening of on-tap liquidity of Rs 50,000 crore till 31 March 2022 for health care sectors is encouraging as the health care and allied sectors are facing tremendous stress of increased demand, supply constraints, and liquidity scarcity. "At a time when the pandemic is posing new challenges for the economy, the well-calibrated first tranche of measures announced by the RBI today pertaining to supporting the small businesses and incentivising lending to the healthcare sector is indeed well-timed and propitious," it said in a statement. Hailing the decisions, the Federation of Indian Export Organisatrions (FIEO) said that it will help in expanding the health infrastructure in the country, which is in distress due to increasing coronavirus infection. "The federation together stands with the government in all its efforts to control the surge in COVID-19 pandemic and support the economic growth of the country," it added. Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said these are timely measures to prop up the much-needed COVID-related healthcare infrastructure in India. The loan restructuring, he said, will be a timely help for many MSMEs (Micro, Small & Medium Enterprises), he added. Apart from the loan restructuring facility, the decision to allow banks to extend the moratorium under restructuring frame 1.0 for a period of up to two years will provide breathing space to many MSMEs trying to recover from the impact of pandemic," Sakthivel said. Assocham said that these are important confident-building announcements by the RBI. ''The targeted policy response and easy credit promised to the entire healthcare value chain, in the government and private sector including the vaccine manufacturers are the most apt measures at this point of time'' it said. The RBI has "most correctly" recognised how small businesses and financial entities at the grassroots are bearing the most considerable burden of the pandemic and has thus unveiled measures to help them, it added. Niranjan Hiranandani, National President, NAREDCO said that these "pro-active moves" are positive for India's beleaguered economy, which was on the path to recovery from the impact of the pandemic in 2020 but is facing the challenge of the second wave. The focus of the announcements "were small businesses, individuals and MSMEs; real estate as an industry looks forward to supporting in form of measures which will help tide over the challenges posed by the second wave," he said. Source: Economic Times INDIA

Haryana cabinet approves new policy for sale of shops of civic bodies

5/8/2021 11:58:00 AM

The Haryana government on Thursday approved a policy for sale of those shops or houses by municipal bodies where the possession of such properties for a period of 20 years is with entities other than these bodies and transfer ownership to them. On certain terms and conditions, it has been decided to transfer the ownership of these properties to such persons who are currently in "justified possession of these properties". "To encourage monetization of locked properties of the municipal bodies, Haryana Government has made a policy for sale of shops or houses by these bodies, where possessions of such properties for a period of 20 years is with entities other than the Municipal Bodies," a state government statement said giving details of the decision of the state cabinet, which met here under the chairmanship of Chief Minister M L Khattar. The policy for sale of those shops or houses by municipal bodies will come into force on the date it is notified by the government. Giving details of the policy, the statement said there are a large number of properties in the shape of shops or houses which, though are presently owned by the municipal bodies but are in the possession of entities or individuals other than these bodies for a period of 20 years or more. "The municipal bodies find managing such properties difficult, particularly in view of the fact that the ownership or possession of such properties have, in several cases, changed hands on numerous occasions and the Municipal bodies lack authentic documentation in this regard. Further, several municipal bodies are unable to even recover the rentals of such properties. "On a careful consideration, it was decided to transfer the ownership of these properties to such persons who are currently in justified possession of these properties," the statement said. The statement said this policy will not only strengthen the financial position of the municipal bodies but will also grant the small shopkeepers and others in possession the ownership of the properties. Giving details of terms and conditions of the policy, where the entire structure constructed by the municipal body is raised on the land and the land is to be transferred to a single occupier (irrespective of number of floors constructed there upon) base rate would be the chargeable price. Similarly, where the structure constructed by the municipal body is two storied and each of such storey is to be transferred to different occupier, then the chargeable price would be 60 per cent of base rate for the occupier of ground floor and 40 per cent of the base rate for the occupier of first floor. Furthermore, where the structure constructed by the Municipal Body is three storied and it is to be transferred to more than one occupier, then the chargeable price would be 50 per cent of Base Rate for the occupier of ground floor, 30 per cent of the Base Rate for the occupier of first floor and 20 per cent of the Base Rate for the occupier of second floor. The applicant or occupier in whose favour the property is to transferred by way of execution of conveyance deed shall also be liable to make payment of all the established taxes and arrears thereof. The cabinet also approved another policy named Homeless Abandoned and Surrendered Children Rehabilitation Initiative for providing employment, educational and financial benefits to such children who are abandoned and who have completed the age of 18 years from child care institutions of the state and were abandoned before the age of 5 years or "surrendered" before the age of 1 year. The aims and objectives of the policy includes to provide jobs on compassionate grounds and Economically Weaker Section (EWS) status to "abandoned and surrendered children", upto the age of 25 years, and who possess the required qualification. Such children will also be provided free school and higher education including technical education, rehabilitation and financial assistance upto age of 25 years or marriage, whichever is earlier, and one time interest-free loan for purchase of a house in Haryana. Source: ET Realty HARYANA

Uprising NRI investment in Indian real estate market

5/7/2021 11:02:00 AM

The real estate industry has always been an ever-evolving sector. It is not only one of the major employment generator markets but also contributes 7 percent to the country’s GDP and it is expected that it might end up contributing 13 percent to the country’s economy by 2025. The occurrence of the pandemic last year brought about major disruptions in the Indian real estate market. As per a survey by Magicbricks, one of the leading online property marketplace, real estate prices in top metro cities witnessed a dip by 2-9 percent in the first quarter of 2020-2021 due to lockdown. However, since the onset of 2021, the sector is walking on the path of revival. While the journey does seem tough, but the shift in the consumer psyche has played a pivotal role in the sector’s growth. COVID-19 brought about a lot of instability and hence consumers are now considering real estate to be the ideal and stable investment solution. Rising NRI investment in Indian real estate market While the domestic consumers are inclined towards this trend, even NRI investments have been growing significantly. As per a report by 360 Realtors, Non-Residential Indians invested $13.1 billion in the Indian real estate market in FY 21. It further states that the investments are expected to reach $14.9 billion in FY22 and will grow at 12 percent. Earlier, NRIs used to purchase properties with an aim to invest or use them for rental purposes. However, the pandemic came as a wake-up call for them and they have now realized the value of having a home in their homeland with a vision to settle in the future. Hence, property buying has become both a lucrative and sentimental solution for NRIs. As per CII-Anarock’s Real Estate Vision study, 38 percent of the bookings of the Indian properties were done by NRIs last year and various factors have contributed to the surge in this trend. Be it increased transparency, eased investment norms, depreciation in the Indian rupee, a significant dip in property rates, or stringent regulations, all of these have paved the way for NRIs to invest in the Indian real estate market. The provision of attractive payment plans and the correction in the value of the Indian rupee has further given a boost to this trend. NRIs now prefer spaces that are open, lush, spacious, and are in close proximity to the health and wellness amenities along with offering accessibility and safety. Additionally, they go for ready-to-move-in or on the verge of completed projects at the outskirts of the city so that there are no delays in possession. Technology has also played a major role to bridge the gap between NRIs and domestic buyers. The developers are organizing virtual tours, a digital inspection of properties, processing documents, finalizing the paperwork, and purchasing the properties without making any physical visits by making use of the online space. Additionally, the construction of smart homes and the incorporation of eco-friendly features has also led to the increased attention of the NRIs in the Indian real estate segment. The implementation of RERA has further escalated the sale of properties by NRIs. Since there are no delays in projects, developers can't divert funds from unannounced projects and are answerable for all the glitches, and hence RERA has emerged as a boon for NRIs. Additionally, the interest rates on home loans have been as low as 6.5% in certain banks and one can avail of a loan of up to 80% of the total property value. There are also options of using NER accounts when applying for loans to invest in Indian properties. All of these regulations have made the process of purchasing properties smooth and seamless for NRIs. Source: CNBC INDIA

Structural Shift In Residential Real Estate In India

5/5/2021 9:50:00 AM

From Q4 2020, residential real estate has witnessed a resurgence. There are divergent views on whether the momentum is here to stay or is just a temporary phenomenon. The doubt casts deeper when the sales dwindle in cities where the Covid surge is high. Therefore, the real question is, what is the long-term prospect of Residential real estate in India? If we look at residential sales performance across the top seven cities in India, the annual figures have consistently dipped from 355,000 units in 2011 to 255,000 units in 2019. In 2020, the figure was 160,000 units while nearly two quarters wiped off. In contrast, the population in India grew from 1.21 billion to 1.35 billion in this time frame. Many theories were floating around over the sluggish market; some blamed it on the demonetization, some said millennials are renting and not buying a home. But if we take a closure look at the data, the facts changed drastically. NCR and MMR, which contributes nearly 50% of the house sales among the seven metros, forced the numbers' nosedive. NCR fell from 100,000 sales in 2011 to 28,000 by 2020. MMR also slipped to a great deal. On the contrary, the southern cities like Hyderabad and Bangalore sales grew at almost 8-9% of the compounding rate during this period, while Kolkata remained stable. It shows that demographic fundamentals were not at fault. For NCR, it was the over-leveraged, insolvent developers who could not deliver projects. Disputes, litigation, deceit, and lack of approvals created a sense of despair in the entire north India market. On the other hand, the MMR region went too far on the extremes of affordability, fuelled by swelling ready reckoner rates, hefty premiums for FSI, and perpetual high land cost. Thus, we need to wait and watch whether the market will roll back to the previous era or has something positive to look at in the new decade at 2021. Three fundamental changes are going to prevail in the current decade. First is the change in demographic structure. In India, nearly 60% of all home purchases occur in 35 to 55 years. That is where stability in income and growth takes place. This age group is also known as the prime consuming class. According to the July '20 population report of Census of India, about 268 million were in the exceptional consuming age group in 2011, which swelled to 337 million in 2021 and will grow to 400 million-plus by 2031. Even within this cohort, the 35-45 years of age group will dominate with a 55% share. In the previous decade, the 25-35 years used to be the dominant cohort. Therefore, it is the sheer size and the presence of more stable income groups that indicate that housing will be in demand for a long time. The second important aspect is the rise in per capita income. With positive thinking that the world will return to Pre -Covid level by 2023, India is expected to grow between 6-8% per annum, taking the GDP to nearly USD 8Trillion by 2030. With this GDP number, the per capita income will also grow 2.5 times from the current USD 2000 per person. It means people will have more money in their hands. The third shift is in the social structure. According to the Technical group's report on 'Population Projection' in July 2020, the dependency ratio will decline from 6.5 in 2011 to 5.3 by 2031. Within the dependent group number of children is also going to be lesser. This indicates that more and more families will be smaller, having less dependent people meaning more significant savings and disposable income. The decade of 2021 to 2031 started ominously, but it is certainly not the way to look at the new decade. The three structural shifts indicate that the prime consuming class in India will swell in number; they will be economically better off and have more disposable income. There is good news for many sectors, including real estate. Another notable fact is that UP, Bihar, MP, and Rajasthan will account for nearly 50%population growth for the next 15 years, indicating that the metro cities in India will continue to see migration from these states. While the fundamentals speak unequivocally about a buoyant residential market in India for the next decade, a lot will depend on how the developer community curates their product and price to match the ever-changing patterns of need. The markets and stakeholders who would take cognizance of the factual positions and evolve strategies to make the most of the demographic dividend emerge as the winner. Source: Business World INDIA

Almost half of housing sales in January-March 2021 contributed by affordable housing segment: Report

5/3/2021 12:21:00 PM

Nearly half of the total housing demand in primary residential market across eight major cities is for two bedroom apartments costing up to Rs 45 lakh, says a study by digital real estate brokerage firm In its latest Real Insight report for January-March 2021 quarter, PropTiger research revealed that housing sales across eight major cities declined only by 5 per cent year-on-year at 66,176 units, indicating that demand is inching back to pre-COVID level. When compared with the Q1 2020, Mumbai, Pune and Bengaluru witnessed fall in sales, while other five cities -- Delhi-NCR, Kolkata, Chennai, Hyderabad and Ahmedabad--- saw growth in demand. While analysing the sales numbers of these eight cities, it was found out that around 45 per cent of sales in January-March 2021 were contributed by affordable housing segment --- apartments priced below Rs 45 lakh. Around 26 per cent of the sales were in Rs 45-75 lakh price bracket, 10 per cent in Rs 75.lakh to Rs 1 crore and 19 per cent above Rs 1 crore ticket size, the report said. As much as 44 per cent of the total demand was for units with 2 BHK configuration. In line with expectations, the share of ready-to-move-in flats in total sales increased compared to preceding quarter. "Affordable housing segment has been a top performer since the last few years. The government is providing tax incentives and interest subsidy to boost demand in this segment and achieve its target of Housing for All," said Mani Rangarajan, Group COO,, and On the overall market scenario since the outbreak of COVID pandemic last year, he said: "After a huge setback during the April-June quarter of 2020, India's residential property market has been recovering month-on-month on pent up demand, festival sales and rising importance of having home ownership." Housing sales in January-March this year almost reached to pre-COVID level driven mainly by low interest on home loans and stamp duty cut by the Maharashtra government, he said. However, Rangarajan feels that the recent outbreak of second wave of COVID-19 and semi-lockdown in many states may put a brake on the revival of the housing demand seen during the last nine months. "Though It is too early to assess the impact, we need to keep in mind that real estate industry is more prepared this time to handle the situation. The sector has taken a giant leap in adoption of digital tools for marketing and sales during the last one year," he observed. On the supply side, PropTiger research showed that new supply rose by 49 per cent year-on-year to 53,037 units across these eight cities during the first quarter of this calendar year. In line with demand trends, new supply continues to be concentrated in less than Rs 45 lakh category, with 45 percent share from the overall pie. The mid-segment (Rs 45–75 lakh price bracket) recorded a share of 27 percent of the total supply in the first quarter. More than Rs 75 lakh price bracket accounted for 28 percent of the total supply. "Weighted average prices for new launched projects in a majority of India’s top cities remained muted in the past few quarters, with prices appreciating marginally in the range of 1–3 percent annually," the report said. Hyderabad and Ahmedabad witnessed 5 per cent growth in January-March this year compared with the year-ago period. Source: Money Control INDIA

India's first 3D printed house inaugurated at IIT-Madras

5/1/2021 10:57:00 AM

CHENNAI: India’s first 3D printed house built by IIT-Madras startup Tvasta was inaugurated on the campus Tuesday The house, which has a built-up area of 600 square feet, has a bedroom, a hall and a kitchen. The entire house was designed using software and printed using concrete 3D printing technology. Using this technology, a new house can be built in five days against four or five months in conventional mode. Further, the cost of the house is reduced by around 30% and life of the building can exceed 50 years. Concrete 3D printing is an automated manufacturing method for constructing three dimensional real-life structures (at all realizable scales). The technique utilizes a concrete 3D printer which accepts a computerized three- dimensional design file from the user and fabricates a 3D structure in a layer-by-layer manner by extruding a specialized type of concrete specifically designed for the purpose. While inaugurating the first 3D printed house virtually on Tuesday, finance minister Nirmala Sitharaman said, "India definitely needs such solutions which do not require much time. Conventional housing requires timing, material, logistics, transporting of material, and so on. But if this technology can produce houses in different locales at five days per house, it would not be a big challenge to build 100 million houses by 2022." IIT-Madras director Bhaskar Ramamurthi said, "The machine for constructing this house can be rented, like borewells rented by farmers. It provides for large-scale, high quality and also, price assurance for the customers.” “This technology can enable deep personalization of construction for the individual. It also can ensure that affordable, good quality housing is available to all Indians with a technology that is built in India," said Adithya VS, Co-founder and chief executive officer, Tvasta. Besides providing housing, it can also solve problems like sanitation, disaster-time rehabilitation, and projects to construct military bunkers, among others. The house was developed in collaboration with Habitat for Humanity’s Terwilliger Centre for Innovation in Shelter. Source: ET Realty India

Indian real estate sector attracts $922 m investments in Q1

4/30/2021 12:29:00 PM

With 42% share, Hyderabad tops Indian cities Institutional investments continued the momentum during the first-quarter (Q1) of calendar 2021, registering a 21 per cent growth in volumes at $922 million ($763 million), indicating sustained investor interest in the domestic real estate market. According to JLL’s Capital Markets Update for Q1 2021, among the cities Hyderabad saw investments with 42 per cent share, followed by Mumbai at 21 per cent. Hyderabad witnessed the highest capital flows of $384 million ($100 million), Mumbai $193 million ($54 million), Delhi NCR $107 million ($171 million), Pune $7 million ($8 million), Bengaluru - - ($385 million) and Chennai ($35 million). “Investments during the quarter were driven by more activity from funds and closed development stage deals and were further supported by external macroeconomic factors. However, the pandemic surge during the second-half of March 2021 is expected to delay the investment pipeline in the second quarter,” revealed JLL’s Capital Markets Update. “The remarkable resilience of the office market and confidence in its long-term growth led investors to chase quality assets available at the core and development stages. We also see the maturing listed REIT market providing an alternative to other asset classes, which lacked income stability,” Samantak Das, Chief Economist and Head of Research & REIS (India), JLL, said. Commercial office space Commercial office assets dominated deals with $864 million transacted, translating into 94 per cent of the total value in the first quarter. Office space developers liquidated their portfolios to deleverage or raise growth capital for the next phase of expansion. In addition, investors are actively scouting for warehousing assets at present and deals are likely to be concluded in the coming quarters. The housing sector, meanwhile, continues to experience an infusion of last- mile funding for project completion. Source: Business Line India

Haryana RERA issues regulations to sell flats only on carpet area

4/28/2021 4:14:00 PM

The Haryana Real Estate Regulatory Authority on Tuesday said it has issued regulations for the sale of an apartment or a building in any real estate project on carpet area basis regulations only.The Gurugram-based regulator warned that penal proceedings would be initiated against the promoter or the real estate agent violating the instructions. The sale on super area basis shall be treated as fraudulent and an unfair trade practice by the promoter, said a statement quoting Chairman K.K. Khandelwal. The conveyance deed shall be executed only on carpet area basis. The sale of apartment or building is only on the carpet area basis. So the sale of super area or any other basis is illegal, it said. Khandelwal said the "definition of super area as provided in various builder-buyer agreements is vague and there are wide variations in the definitions". "The property in real estate projects is not properly described by way of mentioning super area without specifically giving details and breakup of the components included in the super area. The practice of sale of the real estate on super area basis is misleading, ambiguous, opaque, and gives rise to confusion and complexities and at times result into avoidable litigation," he said. These regulations have been made by the authority to ensure sale of plot, apartment, or building, as the case may be, or sale of real estate project, in an efficient and transparent manner and to protect the interest of consumers in the real estate sector, he said. Noting that before Real Estate (Regulation and Development) Act of 2016 came into existence, there was lack of a legal description for the term 'carpet area', he said the Act has provided specific and concrete definition of carpet area which now has addressed the vagueness and uncertainty in this regard. Source: ET Realty Haryana

Co-working spaces flourish in Kochi during pandemic

4/27/2021 10:45:00 AM

KOCHI: Though the office space market is hit hugely by the Covid pandemic, the coworking space providers are finding an increased demand for small spaces from corporates, who are scaling down their operations either temporarily or permanently in Kochi. “We are getting nearly 25 inquiries every month from the corporates who want to move to our business centre. Corporates are finding it as an attractive solution to bring down their overheads. Also, if the economy is sluggish, they could move out of a business centre, without any liabilities,” said Monlash Business Centre chief executive Jackson Mathew. A British academic publishing house and the credit card division of one of the largest nationalized banks have decided to leave their own offices and move to Mathew’s business centre. “This trend started just after the first wave of the pandemic, sometime in September,” said Centre A Offices director Joe Francis Alapatt, who introduced the concept of a premium business centre in Kochi. Since then, a French electrical giant and a German pressure-cleaner company moved to Alapatt’s business centre on MG Road. A couple of the existing players have decided to scale up during the pandemic itself. During the third week of April, Incuspaze, a co-working space provider, added 500 seats at their Kakkanad facility, while Vistaara, a similar provider of managed office space, added 12,000 sq ft at their Cannon Shed Road facility. Vistaara CEO P G Gopakumar said that two leading brands in the country — an airline and a credit-card company — moved to his facility, ditching their rented offices. According to Mathew, the concept of business centre or coworking spaces is going to catch up further in Kochi market. “Now there are only five or six organized players in this segment and in the coming years, many might set up facilities here,” he said. When asked whether the corporates are permanently scaling down their operations in Kochi, Incuspaze business partner Sanjay Chatrath said, “The corporates are not scaling down their operations; it is just that due to the pandemic the market has become a little vulnerable. This takes a toll on their businesses, due to which they turn towards coworking spaces to seek more flexible options. We all know the short-term commitments as well as the little investments needed in terms of commercial expenses in the coworking spaces. In such times, these factors make managed offices and coworking spaces a viable solution for several businesses. They provide easy scalability, offer flexible commitments, wider reach, and good facilities even in tier-2 cities”. Source: ET Realty Kochi

Chennai’s residential sales rise by 30% in first quarter

4/26/2021 1:02:00 PM

Residential sales in the first quarter of the year in Chennai saw a 30 per cent increase when compared to same period last year, highlighting growing home-ownership sentiment amidst Covid exigencies, according to an Anarock Property Consultants (APC) report. According to Sanjay Chugh, City Head-Chennai, APC, buoyed by housing sales growth over the last two quarters (fourth quarter of 2020 and first quarter of 2021), average property prices in Chennai recorded a 1% jump in the first quarter this year, against the same period last year. This shows developers saw this period as an opportune time to increase prices, the report stated. This is backed by A Shankar, Chief Operating Officer, Strategic Consulting, Jones Lang LaSalle (JLL). He says in Chennai, the first quarter of 2021 (January, February, March) saw very good traction in home sales when compared with other cities in India. Also, Chennai witnessed an increase in new launches (of homes). Cities including Chennai, Hyderabad, Kolkata and Pune surpassed the sales volumes of the first quarter of 2020 with overall sales increasing by 17 per cent on a sequential basis. However, the intensity of Covid second wave will reduce this momentum to an extent, though with increase in vaccination, the outlook in the coming quarters is likely to be positive, says Shankar. S Sridharan, chairman, Urban Development/Affordable Housing Committee, Credai National, told Express that sales had been good in the first three months of the year. “There has been an increase in prices. It can’t be quantified. The price rise could be attributed to other factors like rise in prices of raw materials,” he said. As per ANAROCK Research, average property prices in Chennai stood at `4,990 per square feet in first quarter of 2021 against `4,930 in first quarter of 2020. The top five markets in Chennai witnessing this upward trend for average prices in the first quarter of 2021 include OMR, Guduvanchery, Padur, Porur and Madhavaram. The reason for the price rise could be that these areas had maximum housing demand and sales in the last two quarters. All these localities have properties in the affordable and mid-segment categories the two major segments driving demand. Given the good sales, developers have increased average property prices. Also, average prices in these localities have jumped between 12% to 19% over the last six years. Top 5 markets The top five markets in Chennai witnessing this upward trend for average prices in the first quarter of 2021 include OMR, Guduvanchery, Padur, Porur and Madhavaram. Source: The New Indian Express CHENNAI

Housing sales in Delhi NCR improved by 10% QoQ in January-March 2021

4/22/2021 3:59:00 PM

While residential enquiries remained stable, conversions increased QoQ amid the pent up demand, resulting in around 10 percent surge in housing sales in the quarter. Reduction in guidance values in Delhi and banks softening the home loan interest rates helped lift the home buying sentiment in Delhi NCR in Jan-Mar 2021. While residential enquiries remained stable, conversions increased QoQ amid the pent up demand, resulting in around 10 percent surge in housing sales in the quarter, according to The average property prices, however, failed to register any growth, QoQ. New launches improved in the review period; while the market still needs to cover a lot of ground to reach the pre-COVID-19 momentum. Around 16 new and redeveloped projects/ phases were launched across zones, with maximum share in the affordable segment. Barring a few builders such as Godrej Developers, Express Builders and Trident Builders, many deferred their launches. Besides, developers played defensive owing to the recent surge in COVID-19 cases in the capital and the ongoing liquidity crunch. The rental market continued to be the worst-hit across zones, as many companies continued to operate with a limited workforce. Rentals also plummeted by about 15-20 percent YoY, and amid the rising COVID-19 cases, it’s unlikely to see normalcy any time soon. Unsold inventory in Delhi NCR stood at over 1.5 lakh units around March 2021-end. Around 65 percent of unsold residential stock is in Noida, followed by Gurgaon at 22 percent and Faridabad at three percent. The remaining is spread across Delhi and Ghaziabad. Speaking on the report, Maneesh Upadhyaya, Chief Business Officer,, said, “The first quarter of 2021 witnessed a resurgence in sales volume across metro cities, particularly in Pune and Mumbai, amid a stamp duty cut till March. In line with the recovering market sentiment, site visits and sales, pricing power returned to the sellers. Based on properties listed on 99acres, none of the eight metro cities recorded a downward revision in average listing prices of residential apartments in Jan-Mar 2021 against the previous quarter. Buyer responses also reported a 7% surge in the same period on 99acres. Owner listings posted on 99acres also went up by 20% in Jan-Mar 2021 against Oct-Dec 2020.” “The green shoots of recovery seen so far will have to stand the test of the time with a steep surge in COVID-19 cases and the resultant lockdowns in many parts of the country, impacting project construction timelines and buyer site visits. Nevertheless, measures such as reduction in stamp duty and a downward revision in circle rates could help counter- balance the impact of these adversities.” The range of property prices may vary by 10 percent depending on the age and furnishing status of the residential apartments The housing market in Noida, Greater Noida and Ghaziabad remained positive in Jan-Mar 2021. While enquiries were stable, residential sales improved QoQ amid the lower home loan interest rates, fresh housing supply and people’s continued affinity for homeownership. Greater Noida West, and Sector 150 and 43 in Noida near the commercial hub of Sector 137 remained popular for 2 BHK and 3 BHK units, respectively. Growth propellers included availability of housing units priced Rs 35-50 lakh in Greater Noida West. For Sector 150 and 43 in Noida, direct connectivity to the planned Jewar Airport and projects by popular builders are seen as demand stimulators. Residential units priced in Rs 80-85 lakh budget were most popular in the sectors. Authority-approved plots along Noida-Greater Noida Expressway and Yamuna Expressway attracted buyers; however, the latter captured higher traction amid the proposed Film City and Furniture Park. Residential plot rates along Yamuna Expressway have surged by around 10-15 percent in the last six months to Rs 18,000-25,000 per sq m. Residential enquiries in Gurgaon went south by around 15 percent QoQ in Jan-Mar 2021 due to the limited number of new home buyers in the market. Transactions, nevertheless, improved by over 10 percent amid the spillover demand from the previous quarter and developers extending flexible payment schemes. The speedy development of Dwarka Expressway, improved supply of ready homes and the presence of reputed builders, including Tata Housing, ATS Group and Mahindra Lifespaces, boosted enquiries in residential Sectors 102-115 along the stretch. Housing plots also garnered traction; but nearly 60 percent of demand in Gurgaon was recorded for resale homes priced between Rs 1 crore and Rs 1.5 crore. New Gurgaon and Golf Course Road Extension remained popular owing to the news around the Khekri Daula Toll Plaza removal, ample residential choices and proximity to Southern Peripheral Road and NH-8. The average advertised rates of residential apartments in the areas were around Rs 7,000-11,000 per sq ft. A reduction in the guidance value and cut in home loan interest rates helped lift the residential sales in Delhi in Q1 2021. Premium localities of South Delhi and North West Delhi witnessed maximum traction, with around a 7-10 percent hike in the advertised values of property amid demand outpacing supply for ready homes with new payouts and parking. High-net-worth Individuals looking for luxury homes and leading edge amenities preferred the VIP addressed of Vasant Vihar, Greater Kailash, Vasant Kunj, Pitampura, and Punjabi Bagh. Units configured as 3 BHK and priced around Rs 3-3.5 crore posted maximum demand. Source: Financial Express Delhi

Market share of banks in individual housing loans up: NHB report

4/20/2021 10:39:00 AM

The market share of banks in individual housing loans has gone up from 62 per cent in 2017-18 to 67 per cent in 2019-20, while that of housing finance companies (HFCs) has come down from 38 per cent to 33 per cent. According to the National Housing Bank’s latest Trend and Progress of Housing in India report, the pace of growth of banks remained higher than that of HFCs, partly supported by portfolio buyouts, leading to increase in their market share in individual loans. In 2018-19, the market share of banks and HFCs in individual housing loans (IHLs) was at 64 per cent and 36 per cent, respectively. The overall growth in IHLs of banks and HFCs combined stood at 10 per cent in 2019-20 compared to 16 per cent in 2018-19. The report said: “The real estate and Housing Finance Sector in India began to witness a moderation in growth after the IL&FS crisis in September 2018. However, with proactive measures and various other initiatives of the Government, RBI and NHB, the sector started to gain momentum.” The total outstanding IHLs of HFCs and banks combined was around ₹20-lakh crore as at the end of March 2019-20 compared to around ₹18-lakh crore in 2018-19. Outstanding IHLs of Banks and HFCs registered year-on-year growth of 8.5 per cent and 3 per cent, respectively, NHB said. Slab-wise analysis Slab-wise analysis of total IHLs of scheduled commercial banks (SCBs) and HFCs combined shows that around 44 per cent of the total IHL as on March 31, 2020 (against 47 per cent as on March 31, 2019) was towards 124 lakh housing units (119 lakh as on March 31, 2019) within IHL slab of ₹25 lakh. Fifty six per cent of the total IHL (53 per cent as on March 31, 2019) was towards 30 lakh housing units in the IHL slab of over ₹25 lakh, the report said. Referring to growth in the number of housing units financed within IHL slab of ₹25 lakh, NBH observed that affordable housing continues to grow on account of robust demand and various support measures towards this segment. Source: Business Line India

PE inflows in India real estate up 19% in FY21, investors eye portfolio deals across cities

4/19/2021 12:18:00 PM

Despite the COVID-19 pandemic, Indian real estate witnessed over $6.27 billion being pumped into the sector in FY21, as against $5.8 bn in FY20 - an increase of 19 percent in one year, a report by Anarock titled Flux – FY20-21 Market Monitor for Capital Flows has said. Though FY21 was an unprecedented year due to the pandemic, foreign PE funds showed much optimism for India. As much as 93 percent of the total PE investments pumped into Indian real estate was by foreign investors. In actual terms, investments by foreign PE funds almost doubled from $3 billion to $5.8 billion in FY21. In contrast, domestic PE funds invested merely $300 million compared to $420 million in FY20, it said. FY21 saw private equity investors focus majorly on portfolio deals across multiple cities and assets, rather on specific projects or cities. Such portfolio deals constituted 73 percent of the overall share, with approximately $4,583 million invested via portfolio deals in multiple cities, the report said. The average ticket size of PE deals rose by 62 percent in the fiscal year – from $110 million in FY20 to $178 million in FY21. Both structured debt and equity witnessed strong growth during the year at 84 percent and 15 percent respectively. Structured debt was largely towards portfolio deals instead of project-level assets. "Foreign funds are evidently very upbeat about India. High-grade rental-generating assets have attracted foreign investors in a big way during the year. Moreover, India has a strong underlying demand for office space with quality workforce and average rentals available at less than a dollar per sq. ft. per month,” said Shobhit Agarwal, MD & CEO - ANAROCK Capital. "Alongside, the successful REIT listings have provided a good monetising option for PE investors, leading to a stronger demand for good quality rental earning office and retail assets," he said. "Good entry valuation coupled with the option to accumulate a healthy mix of portfolio assets have also driven this surge in foreign PE investments. During the year, PE funds like Blackstone and Brookfield have added a lot of assets to their existing portfolios, while others have takeover loan portfolios of NBFCs.” Among other significant trends, the share of asset classes like commercial, retail and hotel has been very good. While the asset class-wise bifurcation shows lower percentage, when considered along with portfolio deals (where bifurcation is not available), the share of these asset classes is strong. Nearly 66 percent of the total inflows ($6.27 bn) in FY21 was across portfolio deals in multiple asset classes. In contrast, in FY20, out of the total $5.28 billion total inflows, just 8 percent of the total comprised portfolio deals. The top 10 deals alone contributed nearly 78 percent of the total PE inflows in FY21 as against 67 percent in FY20. Also, among the foreign PE investors that remained major contributors for overall PE inflows in India, Canada and US-based investors pumped in more than 50 percent of the total foreign PE investments in FY21. The industrial and logistics sector had strong investor support. Key emerging trends in this sector - rise of automation, urban multi-level warehousing, de-centralization, increasing business consolidation, and high demand for Grade A assets. Data centres are becoming the new sunrise sector, gaining more attention from PE investors and strategic investors, the report said. Source: Money Control India

Metro corridors led to a 15-20% rise in land prices in cities: JLL Report

4/15/2021 12:56:00 PM

NEW DELHI: Metro corridors led to a 15-20% rise in land prices, within 500 metres of such facilities, as per a report from JLL. A fall in cost of commute and improved job opportunities led to a 20-25% increase in commercial property prices, the report added. Over the past two decades, metro rail transport has seen tremendous growth covering a total of 760.62 km across the country, with another 578.34 km under construction. Cities including Kochi, Chennai, Bengaluru, Nagpur and Nashik have seen significant expansion of new metro lines. As per the report, prices of residential properties in south Delhi rose 15-20% in the past five to six years., while the micro-market of corridor-I and corridor-III in Hyderabad saw rates rise 15-20% from 2018 to first quarter of 2021. Many pockets of Chennai witnessed an increase in land prices closer to metro stations by 15-35%. The micro-market in Bengaluru of CBD along with few SBD locations like Indiranagar, CMH Road, Jayanagar, Malleswaram, Yeshwanthpur, Rajajinagar, etc. saw rates rise 8-10% as soon as the east-west and north-south corridors opened for public use. Depending upon the location, land use, and micro market’s overall use, the value of properties are expected to go up 10-15% from current values with the launch of a metro corridor. The deployment of the metro corridor directly impacts real estate sector as it increases land value, land use change and densification alongside the metro corridor. Also, mass transit systems such as metros and monorails significantly contribute towards solving traffic problems. Thus, projects which are planned around the vicinity witness an increased urban real estate value, since consumers are willing to pay more for convenience. A Shankar, head, strategic consulting and valuation advisory, India, JLL, said, “The real estate market has seen a steady growth along the metro corridors, owing to increase in developments alongside the routes. Furthermore, on an average, the land value within 500 m of metro corridors has increased by 15-20%, especially in residential and commercial areas. Additionally, it has been observed that appreciation in land value has been on a rise after the metro operation and increase by 2-5% annually over other locations, compared to the construction and planning phase." Source: Mint New Delhi

New Gurgaon: The new growth corridor of National Capital Region

4/14/2021 11:31:00 AM

New Gurgaon is characterized by a cosmopolitan population, state-of-the-art office spaces, integrated retail and entertainment spaces. Dotted by towering skyscrapers, plush malls, tech-enabled office spaces, top-notch entertainment and recreation options, Gurgaon has rightfully earned the distinction of the Millennium City. Over the years, it has emerged as the new business capital and the hub for next-generation startups. It indeed is looked upon as the epitome of commercial development, especially in the National Capital Region (NCR). Gurugram, as it has been rechristened for being the abode of Guru Dronacharya in Mahabharat, has witnessed a dramatic urban transformation in the past few decades, becoming one of the leading growth corridors on the world map. The success of Gurugram resulted in growth of adjoining areas, New Gurgaon in particular. New Gurgaon is characterized by a cosmopolitan population, state-of-the-art office spaces, integrated retail and entertainment spaces and much more. Riding on the twin waves of the strategic location and planned infrastructural development, New Gurgaon is the most promising commercial and industrial hub that will add a new dimension to the Indian realty sector. This area can be further divided into two main clusters along the Dwarka Expressway – Sectors 102 to 113 and Sectors 76 to 95 & 95A. With excellent connectivity to Delhi on the one side and Manesar (Haryana) and Neemrana (Rajasthan), major commercial hubs, on the other, it is also accessible to prominent landmarks such as Indira Gandhi International Airport, New Delhi Railway Station and the Huda City Center Metro Station. The Kundli- Manesar- Palwal (KMP) Expressway and the Southern Peripheral Road (SPR) have emerged as two major nerve centres of connectivity. The KMP Expressway has eased decongestion by serving as an alternative link between the northern and western as well as the southern parts of India. Meanwhile, SPR has bolstered connectivity in New Gurgaon by connecting to the Golf Course Extension Road, Gurgaon-Sohna Road, NH-4 and the Dwarka Expressway through National Peripheral Road (NPR). The large-scale projects such as the Delhi-Mumbai Industrial Corridor and Dedicated Freight Corridor will herald a dramatic transformation of the region and entail a multiplier effect in terms of enhanced connectivity, industrial development, employment generation, real estate development, thereby augmenting the contribution to Haryana’s GDP. New Gurgaon is also witnessing infrastructural developments at a very fast pace. The opening of the Dwarka Expressway will connect Dwarka with NH48 and ease traffic congestion on the Delhi-Gurgaon Expressway. Moreover, the proposed Greater SPR Road linking IMT Manesar to South Delhi will be a shot in the arm for connectivity and reduce the travel time by 30 minutes. Furthermore, GMDA’s plans to turn SPR into an arterial road under the New Gurgaon-Sohna Master Plan 2031 through metro connectivity and the link to the Gurgaon- Faridabad Road will open floodgates of economic opportunities and propel the region onto a higher growth trajectory. The development of a new industrial township and 6 sub-cities along the KMP Expressway will further fuel commercial development and accelerate real estate growth in the region. The government of Haryana is also undertaking infrastructural up-gradation and improvement at a rapid pace in New Gurgaon. These initiatives include the revamping of SPR, shifting of the Kherki Daula toll plaza and the opening of a cloverleaf interchange at the intersection of Central Peripheral Road (CPR) and Southern Peripheral Road. All these initiatives will play an instrumental role in facilitating a seamless movement of traffic in New Gurgaon, further enhancing its liveability and prospects as a real estate hub. The mobility landscape in New Gurgaon is also witnessing a rapid change. Proposed next-generation mobility systems such as Regional Rapid Transit System (RRTS), Gurgaon- Manesar-Bawal Mass Rapid Transit System (MRTS), the Orbital Rail alongside the Kundli-Manesar Expressway, Delhi-Faridabad Metro Rail Link and the ISBT will aid decongestion, reduce carbon footprints, make travel convenient and hassle-free and enrich the development story. These infrastructural developments are being accompanied by the strengthening of social infrastructure with the rising number of schools and higher educational institutions, banking and financial institutions, commercial and retail spaces, restaurants and food and beverage outlets, entertainment, and recreation spaces, among others. A robust social infrastructure combined with availability of huge open green spaces, and walking areas within residential projects, enable a holistic living. A lot of families living in different parts of Delhi NCR for generations are now considering New Gurugram as preferred choice to invest in for end usage. As a result, today, New Gurugram is home to some of the finest residential offerings in NCR with state-of-the-art facilities, amenities and experiences that a well-travelled millennial years for. With proximity to industrial hubs of Manesar, Neemrana, Bawal, Dharuhera and Bhiwadi on one hand and Cyber Hub, Sohna Road, Udyog Vihar on the other, New Gurgaon is home to burgeoning millennial population, including UHNIs, HNIs, expatriates and corporate professionals. It is a sought-after residential address owing to its strategic location, planned infrastructure and the presence of vast swathes of green and open spaces. Amid ‘the walk to work’ concept gaining currency, corporate professionals are increasingly choosing New Gurgaon for owing their dream home. Taking a cue from the buyers’ overwhelming response, real estate developers are increasingly vying on New Gurgaon and undertaking unique innovations to attract and build a loyal customer base. The COVID-19 has invariably refined the focus towards organized players with an excellent track record who embody customer- centricity as their core philosophy. With health and wellness becoming paramount concerns, integrated and gated townships in New Gurgaon characterized by customized residential offerings with state-of-art amenities, robust facility management and superior customer experience are witnessing increasing traction from buyers. These properties exemplify meticulous planning and are uniquely tailored to customers’ tastes and preferences. Best-in-class amenities, tranquil living amid verdant greenery and a blend of privacy and community are the hallmarks of these properties. A combination of robust infrastructure, the presence of commercial and retail spaces has positioned New Gurgaon as a prominent real estate hub. The prospects of economic growth due to proposed infrastructure projects and favorable policy landscape augur well for New Gurgaon to write a new chapter in the history of Indian real estate. Financial Express New Gurgaon

Central government is likely to extend CLSS benefit for MIG categories

4/13/2021 11:18:00 AM

NEW DELHI: The government of India is likely to extend the Credit Linked Subsidy Scheme (CLSS) for MIG categories as the deadline for CLSS had expired on March 31, 2021. In May 2020, the Finance Minister had announced the extension of the deadline for the affordable housing Credit Linked Subsidy Scheme (CLSS) till March 2021 for middle income families. Amrit Abhijat, joint secretary and mission director, Housing for All, Ministry of Housing and Urban Affairs (MoHUA), says, “The government is most likely to consider the extension of the CLSS benefit further as we have put in a requests based on our assessment from bankers and a large number beneficiaries which get benefit under the scheme.” He said that the government is monitoring the policy diligently and ensuring the benefit of the scheme goes to the eligible beneficiaries. “We have some cases where people have tried to tweak in but Aadhaar and biometric are very important to keep a track of all the discrepancies. In fact, we also have a strong MIS system in place for checking discrepancies,” said Abhijat. Over 10.75 lakh houses have been constructed under the Pradhan Mantri Awas Yojana (Urban) during the COVID-19 pandemic, and Uttar Pradesh tops the chart with more than 2.55 lakh such units. PMAY (U) is in its sixth year of implementation. So far, against the assessed demand of 112 lakh houses, the ministry has sanctioned 111 lakh houses; out of which, 73 lakh are grounded and over 43 lakh have been delivered. The Ministry of Housing and Urban Affairs seeks to provide ‘pucca houses’ to all eligible beneficiaries of urban India by 2022 when the Nation will celebrate 75th Independence. With the vision of ‘Housing for All’, the emphasis has been to accelerate construction, completion and delivery of houses across the country within stipulated time under PMAY(U). Source: ET Realty India

Top eight property markets Q1 sales grow 44%, launches rise 38%: Report

4/9/2021 10:40:00 AM

Residential property markets across top 8 cities in India have witnessed a steady rise in both sales and launches in the first quarter ending March led by lower interest rates, discounts offered by developers and government sops including stamp duty reduction in key markets. While launches rose 38% on year to 76,006 units, sales grew 44% to t 71,963 units in these markets including Mumbai Metropolitan Region (MMR), Delhi-NCR, Bangalore, Pune, Chennai and Hyderabad, showed a Knight Frank India report. The healthy growth in sales has encouraged developers to launch new projects which is reflected in the growth. Property markets of Mumbai and Pune have led the table in both launches as well as sales on account of significant regulatory impetus in the form of discounts in stamp duty charges that led to significant improvement in sales velocity. While end users were keen on taking advantage of the reduced stamp duty regime, developers also thought it right to take advantage of the said growth to launch new projects. In the last few weeks of the first quarter, Karnataka also doled out stamp duty sops to home buyers for residences costing up to Rs 45 lakh. However, the impact of this may only be seen in the subsequent quarters. “The first quarter of 2021 saw a significant rise in sales across the key markets, led by Mumbai and Pune – the two markets that received substantial backing from the state government in the form of reduced stamp duty. Other cities also recorded a rise in sales of homes due to a shift in attitude in homebuyers that has now started to prefer ownership,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India. “That coupled with home loan interest rates at multi-decade lows of sub 7%, a substantial correction in apartment prices, as well as increase in household savings, seems to have convinced homebuyers that this was an opportune time to purchase their properties.” The increasing sales volumes have also arrested the intensity of the on-year fall in residential prices of most markets while Hyderabad and the NCR have seen a marginal growth in prices compared to a year ago. The incidence of developers giving indirect discounts or freebies has been a key factor in spurring sales in 2020 but this has been observed to have reduced significantly in Q1 2021. According to Knight Frank, on a sequential basis, housing prices have remained stable in most cities and recorded an increase in the case of the southern cities of Chennai and Hyderabad. Homebuyers were inclined to acquire ready or near-ready inventory to minimise completion risk. This is reflected in the average age of inventory which stayed at 16.7 quarters in Q1 2021 compared to 15.9 quarters in the year ago period. This is also in line with developers focusing on liquidating older inventory before launching new products which has consistently helped reduce unsold inventory levels to 0.44 million units in Q4 2020, 2% less than a year ago. Source: Economic Times India

Fractional ownership giving a boost to Commercial Real Estate

4/7/2021 1:05:00 PM

Fractional ownership in commercial property has given an opportunity to retail investors to invest smaller sums in India’s booming commercial real estate market. If this pandemic has accomplished anything, it has forced us to reconsider how we make financial decisions, especially how we save and invest. As if wage cuts and layoffs weren’t bad enough, many people lost their stock market savings in 2020, and some had to split their fixed deposits or sell property to meet their requirements. The question is: How to make a pandemic-proof and reliable investment that offers daily and liquid returns that could go straight to our pockets, as well as provide long-term capital appreciation? In the past year, one form of investment stood out on all these counts: fractional ownership of commercial real estate. Fractional real estate is a unicorn investment because it offers a rare combination of high returns and low risk. It makes the attractive returns of commercial real estate (CRE) available to the average citizen. “Making investment in commercial real estate is gaining traction because of increased volatility in the stock market and reduced returns in bonds and fixed deposits. Fractional ownership in commercial properties has given an opportunity to retail investors to invest smaller sums in India’s booming commercial real estate market, thereby helping them open an alternate source of income flow. The future of fractional investment looks bright and sustainable and therefore retail investors have jumped on this bandwagon to ride the wave of safe and healthy returns and also as a means to diversify their investment portfolio,” says Mohit Goel, CEO, Omaxe Ltd. Fractional ownership is predicted to be the real estate market’s future because it addresses one of the most significant issues with commercial property: the high entry barrier or necessary capital investment. “Consider a luxury office space worth Rs 90 crore. Normally, such a large investment will only be accessible to those with a high net worth (HNI). However, with fractional ownership, an individual can now invest as little as Rs 10 lakh to become a part-owner of a piece of property and can earn rental returns of up to 6%-10% per annum. In comparison, a similar investment in residential property would have yielded just 1.5 per cent to 3 per cent,” says Ashish Bhutani, MD, Bhutani Infra. Unlike the rest of the financial market, commercial real estate only endured a modest recession in the early months of last year’s lockdown and rapidly recovered in Q3. As compared to the previous quarter, net absorption of CRE has increased by 63 per cent, while new completions have increased by 59 per cent. “Though real estate in other countries suffered due to the Covid-19 outbreak, office leasing in India grew during the same time due to the country’s strong outsourcing industry. This should serve as a good reminder to Indian investors, both residents and non-residents, that it’s time for them to get a piece of the real estate pie, too. In reality, now is the best time to invest, as CRE prices are expected to skyrocket in the future,” says Achal Raina, COO, Raheja Developers. Tenants of residential property tend to vacate the property regularly, resulting in a loss of rental income before a new occupant can be found. The rental lease on commercial property is usually three-year long, although it can be longer in some cases. The tenants of Grade A property are usually multinational corporations, banks, or information technology firms with deep pockets; such tenants do not default on rent but pay on time. They often like to decorate the space themselves, according to their tastes. Furthermore, because of the time, resources, and effort they put in converting the property into their offices, such tenants are more likely to extend their rental lease. For better returns, it’s best to invest in a property that has already been rented. The rental returns will be credited to your bank account every month. Unlike bank deposits or bonds, where you must wait for the investment to mature and the lock-in period to end before you can access your earnings, you can access your earnings immediately. “Fractional ownership guarantees a rising rate of return — rental yield and capital appreciation. In India, commercial property has grown at a 16 per cent compound annual growth rate (CAGR) over the last five years. Apart from the increase in capital appreciation, you can also expect a rise in rental returns if you invest in a reputable real estate firm. This increase is built into the rental agreement to protect your investment from potential inflation and keep it steady over time,” says Sagar Saxena, Project Head, Spectrum Metro. Investors, however, must perform due diligence on the property in terms of venue, rental yield, capital appreciation potential, and the types of tenants it would attract. Source: Financial Express India

India’s Tier-2 Cities: What is the Appeal for Foreign Businesses?

4/6/2021 10:48:00 AM

India’s Tier-2 cities are often well-connected to major metropolitan centers and have a higher quality of life. Indian cities are classified into tiers on the basis of population density and not levels of development. Increasingly, younger Indians are choosing to relocate to Tier-2 cities due to congestion and pollution in Tier-1 locations, thereby spreading out the talent market. India Briefing briefly spotlights Tier-2 cities in the country and the opportunities available to foreign investors in these areas. India’s Tier-2 cities are steadily becoming the preferred destination for businesses, both in the manufacturing and services sectors. The drivers for this shift include the availability of larger and more open spaces in comparison to the metropolitan Tier-1 cities, besides lower costs of operation. Moreover, the COVID-19 pandemic has accelerated concerns regarding overpopulation in Tier-1 cities, rising levels of pollution, and thereby deteriorating standards of living despite the high costs. Health and wellness will become major considerations for where younger Indians live and work – both, unmarried and with young families, as remote work, flexible working hours, and rapid inter-city and inter-state mobility become the norm. The availability of cost-effective infrastructure, affordable real estate, better transport connectivity, presence of education hubs, and opportunities in various industrial sectors are among key advantages that several Tier-2 cities in India can offer. Advantages of Tier-2 cities in India Labor pool The pandemic accelerated changes to the working culture across various industries where remote work is possible. This in turn motivated many Indian professionals to positively consider shifting to smaller cities, often located in the hometown or close to the hometown. The trend to move out of Tier-1 cities has also been building up for awhile due to rising air pollution concerns and high costs of living. Foreign companies looking to set up in India should therefore consider Tier-2 locations more seriously as prospective hires can be sourced relatively easily – both from within these cities and from Tier-1 cities. Advanced infrastructure India’s 2021 Union Budget announced a boost for infrastructural development in the country to develop office buildings that will match global standards and be equipped with all necessary facilities that will enable a comfortable work environment. Since Tier-1 cities are densely populated and have higher living expenses, foreign investors can expect growth in economic activities in turn leading to more infrastructural development in lesser populated cities like Meerut (Uttar Pradesh), Karnal (Haryana), Amritsar (Punjab), Jaipur (Rajasthan), among others. The 2021 Budget has also given impetus to improving the transport connectivity of Tier-2 cities, by building and upgrading metro/subway lines as found in Tier-1 cities, but at a lesser cost. A key motivation here is to provide more premium housing in these areas. Education Several industrial sectors located in Tier-2 cities across manufacturing, automotive, pharmaceuticals, and information technology (IT) are skills-based or have legacy experience, resulting in the organic growth of informal enterprises and increasingly, corporate enterprises. Many of these cities have traditionally grown their economic and industrial base supported by the presence of education and research hubs, or turnkey foreign investments, which lower costs of hiring and talent sourcing. Prominent Tier-2 cities in India Haryana – largest producer of passenger vehicles and motorcycles Quick facts Haryana ranks #3 in the ease of doing business in India. The state government has a single roof clearances system set up through the Haryana Enterprise Promotion Board. Haryana’s focus sectors include auto and auto components, agro and food processing, textile and apparels, footwear and accessories, electronics, IT/ITeS, defense and aerospace, renewables, pharmaceuticals, and chemicals. Major investment opportunities are available at the KMP Global Corridor, Global City at Gurugram, Integrated Multi Modal Logistics Hub, MRTS between Gurugram Manesar Bawal, Industrial Model Townships, and the Integrated Aviation Hub. Overall, the state is a mature base for automobile manufacturing, IT, and biotechnology. Haryana state comes under the influence zone of two industrial corridors – Delhi Mumbai Industrial Corridor (DMIC) and Amritsar Kolkata Industrial Corridor (AKIC). Thirteen districts from the state are part of Delhi’s National Capital Region (NCR), a major trade and consumption center. Prominent Tier-2 cities in the state are: Chandigarh Chandigarh is a union territory and is directly controlled by the federal government. It is renowned for being one of India’s earliest planned cities, the master plan for which was prepared by Swiss-French architect Le Corbusier. Its quality of social infrastructure and many green spaces make it an ideal destination to do business. The city has one of the highest per capita incomes in the country and is among the cleanest in India. The neighboring cities of Panchkula and Mohali along with Chandigarh make up the prominent Tricity area. Chandigarh is home to over 56,000 micro, medium, and small-scale units, 40 percent of which are involved in manufacturing components for tractors. Its well-connected airport was responsible for handling over 4,500 tons of freight in 2015-16. Chandigarh has an emerging IT industry – its infrastructure, proximity to Delhi, Haryana, Punjab, and Himachal Pradesh, and the resultant IT talent pool has attracted leading MNCs. Major IT multinational companies that have set up here include Quark, Infosys, EVRY, Dell, IBM, TechMahindra, Airtel, Amadeus IT Group, and DLF. Industries Manufacture of tractor components IT/ITeS Electronics Pharmaceuticals Machine tools Key economic zone Chandigarh IT Park (also known as Rajiv Gandhi Chandigarh Technology Park) Educational institutions Panjab University Punjab Engineering College Postgraduate Institute of Medical Education and Research Connectivity National highways Chandigarh Transport Undertaking (CTU) – buses Chandigarh International Airport Chandigarh Junction Railway Station Greater Noida The Greater Noida Industrial Development Authority (GNIDA), which is responsible for the overall development of the city, has taken the steps to provide it with a quality urban environment and developed metro system that now attracts economic activities towards it. The establishment of quality infrastructure and the EcoTech industrial area, that ensures an effective single window system to provide clearances to projects, has now made Greater Noida a favored location for MNC investments. Industries Automotive parts Electronics Special economic zones Moser Baer SEZ NIIT Technologies Limited SEZ Wipro Limited Educational institutions Tata Institute of Social Sciences Skyline Institute of Engineering & Technology Indraprastha Law College Connectivity Cab aggregators Metro system Source: India Briefing India

All properties in Haryana to have unique ID

4/2/2021 10:56:00 AM

CHANDIGARH: Now, every property in Haryana including private, government and even the controversial properties would have a unique ID. It has been planned to ensure that in future no dispute is created over such property. An information in this regard was providing by Haryana chief minister, Manohar Lal Khattar while presiding over the review meeting of Haryana Large Scale Mapping Project and SVAMITVA scheme held at Chandigarh on Thursday. Khattar said that the consolidation work should be done again after every 50 years and a separate cadre should be made for the consolidation work. He further directed that the land should be assessed on the basis of acreage rather than village. He said that a digital platform e-Bhoomi portal has been provided for people voluntarily giving land for government projects. The CM directed Panchkula deputy commissioner to complete the drone mapping work in Morni block of the district within a month. For this, if any kind of assistance is required, then it will be provided immediately by the concerned department. He further directed the officials that 10 more drones should be provided for this work so that atleast one drone is available in every district. During the meeting, the CM was apprised that out of total 7187 villages in the state, drone based imaging work of 5554 villages has been completed. Drone imaging of all Lal Dora villages in district Rewari has been completed. Bhiwani and Mahendragarh districts have also performed well. Besides this, 11 districts of Haryana will soon be free of Lal Dora, while the remaining districts will be free of Lal Dora in around six months. In addition, 345 villages have been declared Lal Dora free and 43166 title deeds have been registered till March 30 for Lal Dora areas. Registration through web portal is now available for the sale and purchase of these properties. Passport for registration of properties of NRIs The Aadhaar number has been made mandatory for taking appointment for new deed appointment and registration. Since the NRIs were facing difficulty in booking the appointment because they did not have the Aadhaar number, therefore passport number has been made mandatory in their case. If the seller is an NRI, then he has to fill the details of his passport number while booking his appointment. Source: ET Realty Chandigarh

How Delhi-Dehradun Expressway will give a boost to real estate

3/31/2021 12:18:00 PM

The real estate sector on the stretch is going to benefit from the development, and realtors are upbeat about the development. The new economic corridor between Delhi and Dehradun was announced by the Union Minister of Road Transport and Highways Nitin Gadkari in February. The 210-kilometer, six- lane express highway project, which is expected to be awarded by August 2021, will be completed by 2023. The Delhi-Dehradun Expressway will reduce travel time from the national capital to Dehradun from five to two hours. A new six-lane road will be built from the Sahranpur bypass to connect with Haridwar in the new economic corridor. This route would cut the existing six-hour journey time between the national capital and Haridwar to just two hours. The real estate sector on the stretch is going to benefit from the development, and realtors are upbeat about the development. “Delhi-Dehradun Expressway is going to benefit real estate on the stretch; it will make more reputed developers come up with projects in tier II cities falling on this stretch as many buyers would love to have homes at places where prices are little less than Delhi. The travel time matters these days, and only 2.5 hours to Dehradun will help people buy second homes or holiday homes in this Hill city,” says Harvinder Singh Sikka, MD, Sikka Group. Real estate development along corridors has become a trend and offers a lot of potential across India. Transport corridors like National Highways and State Highways across India have witnessed significant realty development during the real estate boom. The government has also helped in boosting and promoting industrialization in these areas. A combination of production units, public utilities, logistics, environmental protection facilities, residential areas, social infrastructure, administrative services and few industrial areas has been systematically planned along the corridors. These have further helped and accelerated economic growth. Haridwar is one of the popular destinations, which will benefit from the Expressway. The city is already on the radar of people looking for holiday homes, and now more people will invest there. “People have always been worried about the time taken to move from Delhi to Haridwar, but with this Expressway, the frequency of travel will increase. The serene atmosphere of Haridwar helps people rejuvenate and get charged up for the hectic professional life. We hope that work completes on time, and with this real estate around this Expressway will prosper, which will add value to people’s lives,” says Nagaraju Routhu, CEO, Hero Realty. Talking about the development, Abhishek Bansal, Executive Director, Pacific Group, says, “Weekend travels to Dehradun mean that retail sector, especially, malls will benefit from it. People love to shop and enjoy at places that are away from their work cities, and with only 2.5 hours of travel, people would throng Dehradun for the perfect getaway that it promises. We foresee a new wave of mall culture in the city as there would be a huge increase in footfalls, especially on weekends.” Another boost for the real estate in Uttarakhand is the Metro rail corridor planned from Nepali Farm to Vidhan Sabha in Dehradun district. The 73-kilometer Deharadun–Haridwar– Rishikesh Metro Rail corridor in Uttarakhand was authorized by the Unified Metropolitan Transportation Authority (UMTA) in June 2020. Source: Financial Express Delhi

Unique ID for all land parcels by March 2022: Centre

3/30/2021 12:58:00 PM

The Centre plans to issue a 14-digit identification number to every plot of land in the country within a year’s time. It will subsequently integrate its land records database with revenue court records and bank records, as well as Aadhaar numbers on a voluntary basis, according to a Parliamentary standing committee report submitted to the Lok Sabha last week. The Unique Land Parcel Identification Number (ULPIN) scheme has been launched in ten States this year and will be rolled out across the country by March 2022, the Department of Land Resources told the Standing Committee on Rural Development. One Department official, who did not wish to be named, described it as “the Aadhaar for land”, a number that would uniquely identify every surveyed parcel of land and prevent land fraud, especially in the hinterlands of rural India, where land records are outdated and often disputed. The identification will be based on the longitude and latitude coordinates of the land parcel, and is dependent on detailed surveys and geo-referenced cadastral maps, according to a presentation the Department made to States in September 2020. This is the next step in the Digital India Land Records Modernisation Programme (DILRMP), which began in 2008 and has been extended several times as its scope grew. It’s due to come to an end next week, but the Department has proposed a further extension to 2023-24, to complete its original targets as well as expand its ambit with a slew of new schemes. “This Department has taken new initiatives under the programme like NGDRS [or the National Generic Document Registration System], ULPIN, linking of court to land records, integration [of] consent based Aadhaar number with land records etc. which necessitated its further extension beyond 2020-21 till 2023-24,” the Department told the parliamentary panel. “Unique Land Parcel Identification Number (ULPIN) is proposed to be rolled out in 10 States during FY 2020-21 and by 2021-22 in the entire country,” it added. The Department’s presentation to the parliamentary panel listed the proposed cost for some of the new initiatives. Linking Aadhaar with land records through ULPIN would cost ₹3 per record, it said, while seeding and authentication of landowner Aadhaar data would cost ₹5 each. It added that the integration of the Aadhaar numbers with the land record database would be done on a voluntary basis. Creating a modern land record room in every district would cost ₹50 lakh per district, while the integration of land records with the Revenue Court Management System would cost ₹270 crore. It also added that DILRMP’s next phase would include “linkage of land record database with banks”. “These components will enhance the service deliveries to the citizen of the country and will also function as inputs to the schemes of the other sectors like Agriculture, Finance Disaster Management etc,” the Department told the panel, adding that ULPIN has been recommended by the Sectoral Group of Secretaries. Source: The Hindu India

Airport Road is the latest investment hub

3/26/2021 12:40:00 PM

When it comes to buying or investing in a property, people look for the best of places. Just like highways remain in demand for commercial properties, airport roads also come in the same league. With an attraction of getting a different class of travelers the properties on airport roads offer lucrative returns. The same holds for PR7 Airport Road near Zirakpur where people are investing in large numbers. The PR 7 Road is nearly 310 feet wide that makes it capable enough to handle high traffic. It is undergoing a widening of internal roads that will connect it with the main city and Chandigarh International Airport. The newly built road offers connectivity to Chandigarh, Zirakpur, Mohali, and in some time with Panchkula; this is going to be attracting investments from NRI, Punjab and Himachal residents. The commercial developments built in large numbers are currently an attractive destination for the people living nearby but will also provide an opportunity for Chandigarh residents to venture into the newly built part of the city more frequently than ever. With Chandigarh being on the map of NRIs, the opening up of properties here has given them an option to expect bumper returns on investment. Moreover, it has fabulous connectivity to key locations, nearby tourist destinations, and quality of life make it a much-desired place to buy/invest. Moreover, investment in property is safe as the returns are guaranteed on your capital either through rental returns or investment return. In the short term, capital appreciation is expected to be anywhere around 10-12 per cent. With Chandigarh International Airport providing operations round the clock and also introducing new international flight routes, the rentals will be good enough to make the property worth leasing. The catchment area of 1 million people guarantees a fruitful venture. The scope for retail spaces, especially those that have restaurants and entertainment zones, is the winning combination. Many international brands are showing interest to have their presence here as they see an extensive footfall of mid-segment to high-end strata across all ages. As more developers and investors are enticed to enter this upcoming business center, real estate in this area is seeing a substantial increase. The opportunities are vivid and will open doors for new brands and stores to enter the Tricity market. It will also be providing already established brands in Chandigarh and Mohali region to multiply their presence and reach a wider consumer base. With increasing migration, the developers are coming in with a mixed bag of projects; this further increases the need for more commercial complexes. The Airport Road is providing the best model to the buyers/investors within the budget. Currently, the area, being in a rapidly flourishing state, has just rental and possession prices. It is also in need of multiple and diverse real estate projects to meet the residents’ needs. Investing in this region promises quick and long term returns, with the added advantage of establishing a monopoly by being the pioneer real estate players. PR 7 Airport Ring Road is changing the socio-economic situation of investors and buyers, deviating the crowd towards the periphery, and promising them easy entry and exit from Delhi, J&K and Himachal Pradesh. Market mapping for this area has clearly shown the best results for every commercial player. Therefore, investing in this location will bring prosperity to real estate investors. Source: APN News Chandigarh

Mumbai: Realtors want reduced property stamp duty rate to be extended

3/25/2021 11:16:00 AM

Following a surge in the sale of houses recorded in the last one year due to the stamp duty cut offered by the state government, now developers want the existing offer to be extended for some more time, so that homebuyers remain encouraged. Dr. Niranjan Hiranandani, National President, NAREDCO said, "The positive impact of the concession has been very apparent in terms of uptick in sales and property registration momentum in past few months. The industry stakeholders in the state expect the extension of these booster doses in order to sustain the drive that yields more volumes of transaction. Given that the move has been a game-changer, it will further incentivise the fence sitters to convert into the actual home buyers and see more traction with augmented consumption demand. Currently homebuyers pay three per cent stamp duty fees which was five percent earlier. The concessional stamp duty charges will remain effective only till March 31st as announced by the Mahavikas Aghadi government. The reduction in stamp duty besides other incentives was announced to revive the realty sector especially in Pandemic time. Hiranandani added, "In the post-Covid-19 world, owning a house has gained significance in the ‘new normal’. Real estate also offers the buyer/ investor a safe and steady yield generating asset, and favourable market factors will positively impact sales across the next few months. Not just in Mumbai and the MMR but across the state, the pent-up demand coupled with proactive government measures will fuel the scenario of home seekers bringing their dream home to reality. This will foster revival of the sector benefitting all stakeholders in a win-win scenario." Similarly another developer Chintan Sheth, Director, Ashwin Sheth Group expressed, "The real estate sector has been witnessing recovery due to timely reforms introduced by the government, amongst which stamp duty reduction has worked out positively, to regain confidence of potential homebuyers, resulting in increased sales growth. We hope the government extends the timeline so that it will further benefit the recovery of the sector." While Ashok Mohanani, President - NAREDCO Maharashtra has urged the state government to extend the reduced three percent stamp duty charges for another two quarters so that home buyers continue to invest in their dream homes. Meanwhile the reduction in stamp duty has resulted in monthly sales of nearly 10,000 units for Mumbai consistently. According to the stamp duty registration office records, over 11,666 houses have been sold out in Mumbai alone till March 23rd, 2021 generating revenue of Rs 490.55 crore approximately. Similarly, in state over 1,47,533 houses have been sold out and revenue made is of Rs 8,100.85 crore. Source: freepressjournal India

Indian PE/VC investments close at all-time high of $47.6 billion in 2020: Report

3/24/2021 10:35:00 AM

Indian private equity (PE) and venture capital (VC) investments touched a record $47.6 billion last year on the back of a spate of deals closed by Jio Platforms and Reliance Retail, showed a joint report published by Indian Private Equity & Venture Capital Association (IVCA) and EY on Friday. However, excluding the PE investments worth $17.3 billion bagged by the Reliance Group entities, the total PE/VC funding garnered by companies in 2020 stands nearly 36% lower compared to 2019. In fact, investments in the first two months of the year have been rather sluggish. Funding in the January-February period stood 11% lower year-on-year at $3.72 billion. “The pandemic has led to the rapid adoption of technology. Sectors like edtech, life sciences, technology and some sub-sectors of financial services have demonstrated resilience to the disruptions caused by the pandemic and ensuing lockdowns and thus gained prominence over the traditionally favourite sectors for PE/VC investors like infrastructure, real estate,” analysts said in the report. Infrastructure sector investments dipped to as much as $4.9 billion last year from $13.8 billion in 2019. Consequently, there has been a sharp decline in buyout activity, which recorded a decline of 28% in terms of value and 30% in terms of volume. Although there were merely 66 (excluding Reliance) deals of over $100 million as against 108 in 2019, given that investor sentiment remained subdued for almost a third of the year, sectors like technology, pharmaceuticals, edtech and enterprise SaaS fared well. Going forward into the new decade, analysts expect “these new favourites to continue attracting higher than before PE/VC investments”. “Based on recent trends, early movers in technology-enabled business are expected to corner a disproportionate share of the market. As such, companies that are on the forefront of technology will most likely have the competitive advantage, and PE/VC funds are realising that,” they said. In percentage terms, start-up investments recorded the steepest decline of 40% year-on-year to $4.8 billion across 557 deals in 2020. Investments in the sector stood at $7.9 billion in 2019. Overall deal activity, though, picked up significantly in the last quarter of the year. Investments during the period stood at $18.5 billion compared to $10.9 billion in Q42019. Source: Financial Express India

COVID-19 impact: Real estate developers to focus on customised offerings as per consumer preferences

3/19/2021 12:00:00 PM

The COVID-19 crisis has brought the spotlight back on real estate as it is the most tangible asset for investment in these uncertain times. With the emergence of work-from-home culture, homebuyers are now looking for in-built amenities that understand the needs of families and cater to different needs of the future. Lockdown has resulted in a structural shift in the way businesses and institutions work. From digital options to flexible planning developers are now focussed on consumer led offerings that let you stay ahead of the cut-throat competition. In the path to the next normal, some of the changes in consumer preferences that will be an inherent part are likely to include Transition from rental homes to owned homes – the mindset change The pandemic spurred a new home-buying frenzy. The importance of owning a physical asset has gained much more prominence during these challenging times ever since ‘stay at home’ became the new norm. As we learn to co-exist with COVID-19, people who were comfortable with the rental concept are now driven towards owning their own home, primarily for the sense of security that it brings along. Need for larger homes A portion of the demand is driven by the want to raise the standard of living and the need for a ‘bigger and better’ space. Homebuyers across the country are leaping for homes with additional space. With the aspect of owning a home is becoming a priority, the demand for spacious homes will witness a strategic uptake. The trend is here to stay this year and there is a rising need for more space within the homes. Staff rooms and washrooms, home office, and children’s rooms are few of the prerequisites from most homebuyers. Flexible planning There is no one size fits all. The global lockdown led the buyers to re-think about their future investments. Instead of settling for a 1-BHK flat, they were seeking a 1.5 BHK unit if given an option. Buyers are open to stretch themselves for half-a-bedroom for the extra space with the idea of living in a bigger and spacious home. Developers are now open to flexible planning i.e. offering 1.5/2.5/3.5 BHK models where the ‘half bedroom’ house models help the buyers to plan and alter/convert spaces according to their desire and requirements. Studio apartments The target audience looking at studio apartments are young professionals, young couples, students etc. Especially in a city like Mumbai, people want to live in the city’s centre and enjoy the vibrant culture. Keeping in mind the high cost of residential real estate in premium locations; studio apartments offer great value to acquire space to fit in the budget and the flexibility to live in a premium neighbourhood. Also, with walk-to-work culture gaining prominence, homes around office hubs are witnessing demand. Future proofing It is crucial to be able to adapt to unforeseen situations and be future ready i.e. to opt for self- sufficient amenities. Looking forward to the residential market, customers are demanding spacious projects and all-inclusive in-built amenity. From customised floor plans to in-house workspaces, there are new changes in the customer preference that are coming up. From bigger and better spaces to homes with fully loaded amenities, buyers now seek a future proof modern home that is flexible to cater to different needs of the future. Having identified the need-state, developers are steadily adapting to this concept and this will be one of the strongest value-propositions to the homebuyers in 2021. Better neighbourhoods Buying a home in a good neighbourhood is an investment. Irrespective of the pandemic, homebuyers in metros have always been on the hunt for properties that are close to their offices. Additionally, they also look for homes that are well connected to health-care centres, schools, essential stores and services nearby. In metros like Mumbai, the areas that are close to important micro-destinations within the city like corporate hubs, airports, and other public transport along with other social amenities like malls, schools hold a greater demand amongst homebuyers. Areas like Bandra, Santacruz, Lower Parel and Vile Parle in Mumbai are now in high demand owing to the accessibility to prominent corporate hubs, airports and other important locations in the city along with the quality of lifestyle and social amenities. Source: Money Control India

Cabinet approves bill to set up Development Finance Institution

3/18/2021 11:51:00 AM

In a move that could speed-up the process of infrastructure development in India, the union cabinet, on March 16, 2021, approved a bill to set up a Development Finance Institution (DFI), to offer long-term capital support for the sector. “The Cabinet has cleared this bill, through which we will have an institution and institutional arrangement, which will help in increasing long-term funds,” finance minister (FM) Nirmala Sitharaman said, in a press briefing after the cabinet meeting. To be started at an initial paid-up capital of Rs 20,000 crores, the proposed DFI will also receive an additional grant of Rs 5,000 crores from the government. The institution will raise funds from the pension and insurance sectors, for investment in new projects, while also offering tax incentives – the centre will provide a 10-year tax exemption to funds investing in the DFI, to attract long-term players. To lower the cost of funds from the DFI, the government will also provide the institution with some securities. “This decision has been taken by the government, to increase spending on roads, ports and energy and other infrastructure projects, which were pending for completion. It will speed up major infrastructure projects and give a push to the real estate sector in a big way. This is positive news for the real estate industry and all other allied industries,” said Prasoon Chauhan, founder and CEO, BlackOpal Group. The cabinet’s approval, follows an announcement made by the FM on February 1, 2021, in her Union Budget 2021 speech, in which she spoke of setting up the DFI. The industry lauded the announcement, stating that the DFI could go a long way in securing long-term debt financing for the sector. “The DFI is expected to provide ease of access to finance for infrastructure projects and will aid the developers, who are finding it difficult to raise finance with long gestation and tenures, from the banks,” said Vipula Sharma and Nirav Shah of Brickwork Ratings. About 7,000 projects have been identified under the National Infrastructure Pipeline (NIP) with a projected investment of Rs 111 lakh crores during 2018-19 to 2024-25. Work on 1,766 projects has started. The DFI will initially be owned by the government but it will gradually lower its stake in the institution to 26%. Also, half the directors of the DFI will be non-official. Source: India

Part ownership is new realty for Indians

3/17/2021 11:31:00 AM

Fractional real estate, as the concept is known, allows investors to buy, say, 2% of a vacation home for a minimum of ₹2 lakh and use it for their weekend getaways in addition to earning rental income. A growing number of Indians are acquiring slices of rent-yielding residential and commercial properties, owning a tiny portion of expensive property, in a way that is somewhat similar to investing in stocks of a company. Fractional real estate, as the concept is known, allows investors to buy, say, 2% of a vacation home for a minimum of ₹2 lakh and use it for their weekend getaways in addition to earning rental income. The more expensive commercial real estate space is attracting wealthy Indians and non-resident Indians (NRIs). “The pandemic has actually created the catalyst and the stimulus for people to invest. Till now, a weekend property was important but not urgent. But covid-19 has changed that," said Vijay Naraayanan, co-founder and chief executive of Allspace Ventures, a provider of custom-designed super luxury villas, apartments and farm-spaces. For instance, if an investor wishes to own a portion of a one bedroom-hall-kitchen property in Lonavala, the minimum investment starts at ₹2 lakh for 2%. Investors can, of course, buy more. Many NRIs, Naraayanan said, are picking up stakes in multiple properties across India. For any property, multiple owners form a special purpose vehicle (SPV), which buys the asset, and the owners get shares proportional to their investment in the SPV. The SPV has a maximum of 50 investors. The property, when let out, is expected to bring in an annual rental yield of 8-9%. When an investor wants to exit the property, he can sell his share to other investors. In the commercial real estate segment, grade A office real estate is becoming a favourite with investors. “Many white-collar professionals and NRIs are investing in grade A office properties," said Shiv Parekh, chief executive and founder of hBits, a platform providing fractional ownership in commercial properties. The pandemic, Parekh said, has accelerated the pace of fractional real estate as it has forced many developers to sell their grade A commercial properties. Though the minimum investment in commercial properties is ₹25 lakh, an owner is free to sell his stake at any time as there is no lock-in period for the investment. While the rental yield is around 8-9%, if clubbed with property appreciation, it can go up to 15-18% annually. Both real estate investment trusts (Reits) and fractional realty investments help investors earn rental yields while also benefiting from capital appreciation. However, for high networth individuals who would prefer direct ownership in prime real estate, say, a commercial building in Mumbai’s central business district, fractional ownership is the better option as Reit investors have little control over the choice of property that they are investing in but depend on fund managers who decide where the capital is deployed and when to sell an asset. According to Anuj Puri, chairman of Anarock Property Consultants, even though some tech platforms have warmed up to this concept, fractional ownership is still at a budding phase in India and lacks awareness. “Lack of standardization prevented many investors—both global and national—to come forward and opt for this model. With more tech innovations happening, the model is slowly gaining ground, and it certainly has potential," said Puri. Source: Mint India

Chandigarh: Floored by floors in City Beautiful

3/16/2021 11:59:00 AM

Sometimes one wonders whether the recent evaluations of cities befitted an ideal living, or for that matter any rankings have an impact on our civility or our undaunted love for the City Beautiful? While civility I wish was taken as seriously by the citizens as they take notice of the white uniform-clad traffic police of Chandigarh or when they are defending the city in drawing room discussions in Sainik farms and Brampton and New Jersey. Chandigarh has witnessed a sea change in the last decade or so from just being a tier 3 city known for its gardens, parks and tarmac-laden gleaming roads to now being a comfortable mini-cosmopolitan cousin of Delhi. And not only in the culinary diaspora or the slowly impending arts avenues but also architecturally where what was once unthinkable is doable for owning a pad in the city north and south of the Madhya Marg, the defining line between Chandigarh’s version of Lutyens’ Delhi or Corbusier’s Chandigarh and then the rest. The independent floors which are now fulfilling a daydream that many Chandigarh lovers had to own a place in the city can now see it realising with floors mushrooming everywhere with avant garde constructions, elevators, terraces, vertical gardens and basements and parking. The preferred location charges of course are now not limited only to the big real estate players but have extended their reach to the kothi owners too beginning with park-facing corners and, of course, proximity to the lake. Guranchal Sethi, a real estate consultant who has witnessed the change in selling and buying dynamics owing to the family being in the profession from the very beginning, says, “Floor-wise construction helps increase the density of the same plot and gives more options to people who cannot afford to buy full houses in case of family settlements. Floor-wise construction helps in keeping intact the family harmony amongst brothers and sisters as it’s an opportunity to be independent yet living in the same place. There has been an upsurge in sectors like Sector 11 which is now being considered the new defence colony with its increasing floor options and proximity to the lake and probably also because the sector has more one kanal options than any other in that side of town. Yes, there are drawbacks and major issues like parking but since our city was designed for four lakh people and we are a million living here, now this will be an ongoing issue unless we go the Singapore way.” Parking, yes, is an issue the world is battling with and then for a city that has the highest density of privately owned vehicles faces yet another challenge there with its open hand open enough to constantly tweak and revise its parking policies. Surbhi, a young engineer with interests in architectural planning, says, “Levying a charge for congestion and linking availability of parking space with vehicle registration can be done. Who will decide how much is to be charged and when? Also, can a person be denied his or her right to own a vehicle? Community parking is also recommended in each sector by using neighbourhood commercial and institutional parking lots on a rental basis. Interestingly, these lots are to be run by the registered residents’ welfare associations (RWAs).” As long as the green spaces are being maintained, parking etiquette within the neighbourhood and within a floor- wise house is maintained, it’s an idea that is welcome, also because nuclear families within joint families of late have been on a rise. That too because of independent kitchens, lifestyle habits. But then the Sunday lunches are always there to be with the grandparents or the chachas and tayas. Arun Dhir of Dhir Constructions, a firm behind many of the recent reinventions in architectural nuances and options in the Tricity area, sums it up: “Let’s face it. A very minuscule percentage of the population can afford to buy an independent bungalow in Chandigarh. Why shouldn’t a young couple if they can afford to buy a floor, maintain the house and the green spaces? They are probably more agile and economically more open to spending for neighbourhood welfare and upkeep and maintenance. Most of the large houses in town are owned by NRIs or aged parents who find it a challenge to maintain these big lots where the floor culture comes in useful. So, I think it’s an ideal harbinger for changing the mindset of “oh, no we can never buy a house in Chandigarh”. To quote Le Corbusier, “The city of Chandigarh is planned to human scale. It puts us in touch with the infinite cosmos and nature. It provides us with places and buildings for all human activities by which the citizens can live a full and harmonious life. Here the radiance of nature and heart are within our reach.” Now maybe the heart too is. Source: Indian Express Chandigarh

Infrastructure impetus giving rise to remote homes

3/13/2021 12:14:00 PM

The year 2020 was marked with immense changes and transitions in every sphere of human life. With the virus outbreak, offices adopted work-from-home an option which was usually not popular with most businesses. As months passed and the pandemic continued, the culture of remote working seemed here to stay. Before the lockdown, who among us could have imagined that the idea of working will transform so dramatically? During the FY 20-21 Union Budget, the government allocated Rs 20,000 crore to set up and capitalize a Development Financial Institution (DFI)—to act as a provider, enabler and catalyst for infrastructure financing. The higher budgetary allocations offer more scope for growth which helps in boosting the economy. With work-from-home becoming a norm for most companies, homebuyers today are no longer chasing offerings, which are surrounded by commercial buildings, have extremely high rates and provide limited space. Initially, professionals with families would opt for 2BHK-3BHK housing options, with scanty carpet size, just to avoid hours of commute. However, the current events have made the presence of in-house work stations mandatory, motivating people to choose those properties that have the suitable infrastructure and facilities to ensure smooth work from their homes. Through this development of ‘remote homes’ there have been structural changes in business continuity, which will notably accelerate the process of market penetration in the realty sector. Steered by the thrust on digitization, and as an aspirational destination, remote cities are now leading the way in promoting luxury sectors like fashion, cars, and jewellery, as well as necessities like schools and recreational facilities. As the country eased the lockdown across cities, the growth of virtual demand for residential properties in smaller cities has grown by almost three times in August 2020, compared to the same period in 2019. According to an analysis by, interest parameters suggest that there has been a significant increase in interest levels for both buying and renting a home in remote cities. In cities like Mumbai, where residential accommodation is known to leave a massive hole in the buyer’s pocket, the availability of remote housing options has emerged as a great boon. These offerings are located away from the hustle and bustle of congested commercial areas and promise an improved quality of life at budgeted rates. Shifting to a house in an off-beat locality does not mean living far-away from the main city. These upcoming residential projects are centrally located, providing easy connectivity to all parts of the city via road or rail. The realty industry has welcomed this transformation with open arms. It has skillfully leveraged the work-from-home format and has come up with innovative ways to offer home buyers everything they desire at the best price possible. In this new era, affordability and real-estate investment seem to walk hand in hand. Source: Construction Week Online India

Demand for luxury housing improves in Delhi-NCR amid price fall, low interest rates

3/12/2021 10:54:00 AM

The demand for luxury housing properties in the national capital has improved in the last six months on low prices and home loan interest rates, but there is a need to reduce stamp duty to give a further boost, according to industry experts. Addressing a webinar on luxury housing market of Delhi-NCR, India Sotheby's International Realty CEO Amit Goyal said the circle rates in Delhi should be rationalised as market prices are 30-40% lower than the circle rates. Rahul Bhargava, Joint General Manager, HDFC Ltd, Anubhav Jain, CEO, Silverglades Group and Ravinder Singh Ahuja, CA, Founder RS Ahuja & Co also participated in the webinar. “In the last 8-9 years, property prices have only come down. So, it’s high time that the circle rates are rationalised now. I wish there is a stamp duty cut, just like how it was done in Maharashtra and some other states. Even internationally, countries such as the UK and Malta did the same," he said in a statement. Maharashtra and Karnataka governments have reduced the stamp duties on registration of properties. Last month, the Delhi government had reduced the circle rates of residential, commercial and industrial properties by 20% for the next six months, but industry players made a case for further rationalisation. Goyal said demand is much greater than supply in the market today, due to pent-up demand, low interest rates, an all-time high equity market. "There is some amount of profit-booking happening from other asset classes, and money is flowing into real estate," he said. Goyal said property prices have not appreciated over the last decade and rather have come down. “Location has become important post lockdown because people are putting emphasis on upgrading lifestyles. They don’t want to travel too much for work and leisure," Jain said. Bhargava said the loan disbursements have surpassed pre-COVID numbers. "April-May disbursement was negligible, but now, we have surpassed our pre-COVID numbers, and we can see this trend will continue," he added. Ahuja said the property prices and interest rates are at the lowest, which has created a very attractive and positive environment. Goyal said the maximum demand is in ₹15-25 crore bracket and the top three markets are Sundar Nagar, Jorbagh and Shantiniketan in the national capital. HDFC Home Loans and India Sotheby's International Realty are jointly organising Delhi Luxury Home Fair 2021, an online property show from March 6-21. The show will exhibit luxury properties including ready-to-move-in homes and new developments across Delhi NCR in a price range of ₹5 crore to ₹150 crore. Source: Mint Delhi

Loans to real estate developers see an 81% increase on improvement in housing sales

3/11/2021 12:10:00 PM

A total of 506 loans worth Rs 1.16 lakh crore have been sanctioned during 2020. There was a 81 percent year-on-year increase in the number of loans sanctioned to real estate developers during the December quarter of 2020, and an almost 180 percent growth in the sanctioned loan amount at Rs 37,921 crore, showed data shared by Propstack. With housing sales picking up on the back of record-low home loan rates and stamp duty cuts in many states, several developers have considered refinancing their existing loans. Banks too have come forward to lend on account of increased cashflows for some developers, the real estate data analytics firm said. After a sharp drop in 2019, there was a further 8.5 percent year-on-year drop in the loan amount sanctioned in 2020 versus 2019. If 641 loans were sanctioned in 2019, only 506 loans were sanctioned in 2020 a year that was marked by the COVID-19 pandemic, the analysis showed. A total of 506 loans worth Rs 1.16 lakh crore have been sanctioned during the year 2020 and this is 8.5 percent lower than Rs 1.27 lakh crore loans sanctioned in 2019, the analysis showed. There was a strong recovery in the fourth quarter of 2020 with a 81 percent year-on-year increase in the number of sanctions despite an overall 21 percent drop in 2020 versus 2019. There has also been an 1.8 times year-on-year growth in the loan amount sanctioned in the fourth quarter of 2020 driven by sales recovery and refinancing at lower rates. If loans worth Rs 13,569 crore were sanctioned in 2019, loans worth Rs 37,921 crore were sanctioned in the fourth quarter of 2020, it said. There was an overall decline of 80 bps in interest rates in 2020 compared to 2019. Interest rates, charged by financial institutions, came down to 10.8 percent in 2020 from 11.6 percent in 2019, following repo rate cuts announced by the Reserve Bank of India, the Propstack analysis said. The average interest rate charged by the non-banking financial companies (NBFCs) decreased from 13.8 percent in 2019 to 11.9 percent in 2020. Banks saw a decline from 10.3 percent in 2019 to 9.9 percent in 2020, the analysis said. Propstack covered loan sanctions to over 1,000 real estate developers spread across the country and their SPVs based on their charge filings with the MCA. Source: Money Control India

Affordability of residential real estate improves dramatically

3/10/2021 11:18:00 AM

Falling loan rates and stagnant real estate prices mean that you can get a better loan deal than ever When home loans fall by 100bps, they are as effective as a 5% price cut from the affordability perspective There was never a better time to buy a house than today. According to data from multiple sources, property affordability is the highest ever if you consider real estate prices, falling home loan interest rates and incomes. Home loans from top banks are at rock bottom. Kotak Mahindra Bank has the lowest rate at 6.65%. State Bank of India and ICICI Bank offer home loans starting at 6.70%. For HDFC Ltd, the lowest interest rate is 6.75%. Property consultants and lenders point out that incomes have risen faster than real estate prices, at least in the past decade. According to a research report from broking firm Jefferies India Pvt. Ltd, since 2013, property prices have shown a compounded annual growth rate of 1-2%, significantly below inflation, and are also trailing growth in income levels. “Except for a few pockets, property prices have remained stagnant since financial year (FY) 2013 as volumes started declining. During the same period, we have seen an average income growth of 8-10% a year," said Piyush Bothra, co-founder and CFO, Square Yards, a property portal for buying, selling and renting. When home loans fall by 100 basis points, they are as effective as a 5% price cut from the affordability or home loan servicing perspective. They were around 8% at the beginning of January 2020. Let’s look at how falling interest rates affect a home buyer. AFFORDABILITYHAS GONE UP HDFC Ltd tracks affordability based on the customer’s profile, property rates and other incentives available for a buyer, including tax deduction. In FY2000, property prices, on an average, were 5.9 times the annual income of a buyer. In FY2020, the price of the property that a person purchased was on an average 3.3 times the annual income. According to JLL India, home purchase affordability among the top seven metros is on the rise. The cities include Mumbai, Delhi NCR (National Capital Region), Bengaluru, Chennai, Pune, Hyderabad and Kolkata. Kolkata has the best affordability, followed by Hyderabad. Mumbai was at the bottom among the seven metros. WHAT AFFORDABILITY MEANS FOR BUYERS With affordability rising, you can buy a bigger property with your current income. Home loan rates are down by about 1.2-1.3 percentage points compared to last year alone. Assume a buyer earns, say, ₹1 lakh net salary a month. He/she takes a loan for 20 years. At 8% interest rates, the buyer could get a loan up to ₹59.78 lakh. At current rates of say 6.7%, he/she can get an additional ₹6.24 lakh loan. If the loan amount is the same, your monthly outgo reduces considerably. Say, a borrower wants to avail a ₹50 lakh loan for 20 years. A 1.3 percentage point difference in interest rate can bring down the equated monthly instalment (EMI). A borrower would pay an EMI of ₹37,870 at 6.7% rates, whereas the monthly outgo works out to be ₹41,822 at 8% rates. But home loan interest rates are just one part of affordability. “In the latest consumer sentiment survey, we discovered that attractive deals offered by developers was the top factor driving housing demand (for at least 36% of the respondents). Availability of cheaper loans was the second factor in their property purchase (for 25% respondents) decision," said Anuj Puri, chairman, Anarock Property Consultancies. SHOULD YOU BUYA HOUSE NOW? Due to better affordability, many people have already started buying homes. “Among those who are buying properties, many are first-time buyers. A portion is also those who are looking at bigger houses. Due to work from home, many have realized that they need separate working space in the house," said Raoul Kapoor, COO, Andromeda, an intermediary for loans with different banks. While affordability is at its best for an average buyer, there is no right time to buy a house for consumption—where the purchaser will reside. If you have been planning to buy one, go for it. But don’t rush to buy a house just because the loans and prices are attractive. It’s best to plan for a big purchase like home. You will need to contribute around 20% of the purchase price even if you are planning to finance it. For those looking to invest in property, most experts advise against it. “There won’t be any dramatic increase in the prices any time soon for investors to start looking at the residential real estate market," said Bothra. Added Puri: “Investors with the financial wherewithal can consider expanding their portfolio into other options like real estate investment trusts (Reits), which are yielding a good return on investments. Reits are seen to be a stable income generator, especially since it is driven by strong demand and occupancies in India’s Grade A office market, further backed by lease commitments from big corporates." So, buy a house if you intend to stay in it, not for investment. Source: Mint India

Real estate sector welcomes 1% stamp duty discount for women

3/9/2021 12:12:00 PM

The real estate sector in the Pune Metropolitan Region on Monday expressed optimism over finance minister Ajit Pawar’s announcement of a 1% concession of women homebuyers during his budget speech. Large real estate players and collectives in the region felt that the reduction in stamp duty would give a much needed fillip to the sector, which went through a rough patch due to the pandemic last year. While the market enjoyed a purple patch of sorts in the last quarter of 2020, due in large part to the 3% reduction in the stamp duty, the rate was increased by 1% from January. The concession is to be phased altogether from March 31, an uneasy prospect for some in the real estate sector. In his budget speech on Monday, Pawar said the 1% concession — coinciding with International Women’s Day — was an empowerment measure. The move is expected to cost the the exchequer Rs1,000 crore, and the government has raised taxes elsewhere, particularly on Indian-made foreign spirits, , to make up for this. “This (the concession) will not only help the construction sector, but is also an important step towards women’s empowerment,” Poonam Gokhale, director of Gokhale , director of Gokhale Constructions, said. Credai-Pune Metro also lauded the proposal and noted that this had been a long-pending demand. “In fact, Credai-Pune Metro had earlier requested the state government to offer a discount on stamp duty if a flat is registered in the name of a woman. So, in a sense, our demand has been accepted,” Suhas Merchant, president of Credai-Pune Metro, told TOI. Source: Times of India Pune

Ease of Living Index: Bengaluru, Shimla adjudged best among 111 cities

3/5/2021 12:52:00 PM

Bengaluru emerged as top city on government's Ease of Living Index 2020 that was released by Housing and Urban Affairs Minister Hardeep Singh Puri on Thursday. Pune was second and Ahmedabad was ranked third among 111 cities. Puri announced the release of the final rankings of Ease of Living Index (EoLI) 2020 and the Municipal Performance Index (MPI) 2020 in an online event. The rankings under Ease of Living Index 2020 were announced for cities with a population of more than a million, and cities with less than a million people. 111 cities participated in the assessment exercise that was conducted in 2020. The analysis categorises them into Million+ populated cities (those with a population of more than a million) and Less than Million populated cites (those with a population of less than a million) along with all the cities under the Smart Cities Program. Bengaluru emerged as the top performer in the Million+ category, followed by Pune, Ahmedabad, Chennai, Surat, Navi Mumbai, Coimbatore, Vadodara, Indore, and Greater Mumbai. In the Less than Million category, Shimla was ranked the highest in ease of living, followed by Bhubaneshwar, Silvassa, Kakinada, Salem, Vellore, Gandhinagar, Gurugram, Davangere, and Tiruchirappalli. Similar to the EoLI index, the assessment framework under MPI 2020 has classified municipalities based on their population- Million+ (municipalities having over a million population) and Less than Million Population. In the Million+ category, Indore has emerged as the highest ranked municipality, followed by Surat and Bhopal. In the Less than Million category, New Delhi Municipal Council has emerged as the leader, followed by Tirupati and Gandhinagar. The MPI examined the sectoral performance of 111 municipalities (with Delhi being assessed separately for NDMC, and the three Municipal Corporations) across five verticals which comprise of 20 sectors and 100 indicators in all totality. The five verticals under MPI are Services, Finance, Policy, Technology and Governance. The Ease of Living Index (EoLI) is an assessment tool that evaluates the quality of life and the impact of various initiatives for urban development. It provides a comprehensive understanding of participating cities across India based on quality of life, economic-ability of a city, and its sustainability and resilience. The assessment also incorporates the residents' view on the services provided by city administration through a Citizen Perception Survey. "he Municipal Performance Index (MPI) seeks to examine local government practice in municipalities across areas of services, finance, policy, technology and governance. It seeks to simplify and evaluate the complexities in local governance practice and promote the ethos of transparency and accountability.Both the indices represent an attempt to gauge the performance of cities across India on various parameters of urban living. The Ease of Living Index encapsulates the outcome indicators while the Municipal Performance Index captures the enabling input parameters. These indices provide a holistic assessment of cities based on their efforts to cultivate better quality of life, create infrastructure, and address challenges of urbanization," said Ministry of Housing & Urban Affairs in a statement. "The Municipal Performance Index is an effort to assess and analyse the performance of Indian municipalities based on their defined set of functions. The responsibilities of a municipality span across a range of verticals that include provision of basic pubic services to more complex domains like urban planning. The salient features of MPI are given below. The framework covers 20 varied sectors vis. Education, Health, Water & Wastewater, SWM & Sanitation, Registration & Permits, Infrastructure, Revenue Management, Expenditure Management, Fiscal Responsibility, Fiscal Decentralisation, Digital Governance, Digital Access, Digital Literacy, Plan Preparation, Plan Implementation, Plan Enforcement, Transparency & Accountability, Human Resource, Participation and Effectiveness," the Ministry further said. India

Post-covid-19, women prefer real estate more than men, finds survey

3/4/2021 12:04:00 PM

Women’s preference for real estate has risen post-covid-19—from 57% votes in a pre-covid-19 consumer sentiment survey to 62% in the current edition of the survey by ANAROCK Property Consultants. Their main sentiment drivers include affordability, offers and discounts, and home loan rates. Women tend to prefer real estate more than men. While 62% of women prefer to invest in real estate, only 54% of men chose it over the stock market, fixed deposits and gold . The company had surveyed 3,900 survey participants. Of these, 36% of respondents were women. Other key findings of the survey are as under: > At least 82% of women respondents will buy a home for end-use, 18% for investment. In contrast, 68% of men will buy for end-use and 34% for investment. > Over 70% of women respondents consider this to be an ideal time to buy a property. > At least 66% of women respondent home seekers will buy within affordable and mid-segment housing (below Rs90 lakh) > Most women prefer bigger configurations—46% favour 3BHKs while 30% are scouting for 2BHKs. About 10% also looking for 4BHKs. > The security of physical assets influences 31% of women homebuyers, 28% are attracted by cheaper home loans, and 22% by available offers and discounts. > While most women preferred properties priced within Rs90 lakh, 5% voted for ultra-luxury real estate priced (Rs2.5 crore) “The survey reveals that many Indian women now consider housing not just the bedrock of financial security but also essential to diversify their investment portfolios," said Prashant Thakur, director & head of research, ANAROCK Property Consultants. According to the survey, women homebuyers prefer ready-to-move-in homes, reflecting a strong aversion to under-construction properties. Nearly 71% of women respondents want to buy ready homes, followed by 11% each for homes that will be available for possession in the next six months and newly-launched projects. Various government policies support and promote women homeownership in India. For instance, to avail homes under the government’s flagship scheme Pradhan Mantri Awas Yojna (PMAY) introduced in 2015, homes have to be mandatorily registered either in a woman’s name, or with women as co-owners. It was done to empower women of the lower-income segments. Lower stamp duty is another benefit that women enjoy while buying a property. Stamp duty charges are lower if property registration is executed in the name of a woman, although these charges vary from state to state. The exemption for women varies between 1-2% across different states. To avail of certain tax benefits, a woman can also become the joint owner of a property with her husband and, if she has a separate source of income, both can claim tax deductions individually. Source: Mint India

SBI reduces home loan rates to 6.70%

3/3/2021 12:34:00 PM

The country's largest lender State Bank of India on Monday said it has reduced interest rates on home loans by up to 10 basis points (bps) and is offering loans starting from 6.70 per cent rate. The new rates are based on loan amount and CIBIL score of the borrower, and are available till March 31, 2021, according to a statement. The bank said the home loan interest rates will start from 6.70 per cent for loans up to Rs 75 lakh and 6.75 per cent for loans in the range of Rs 75 lakh-Rs 5 crore. The bank's Deputy Managing Director (Retail Business) Saloni Narayan said, "We want to take advantage of the festive season, especially Holi. This being the last month of the year, we are looking at a good number." The lender is also giving a 100 per cent waiver on processing fees. Customers can also apply for home loans using Yono app to get an additional interest concession of 5 bps, the bank said. It is also offering a special 5 bps concession to woman borrowers on the eve of International Women's Day. Narayan said the bank does not see much challenge in terms of repayments in the home loan segment. "We are mindful of whatever stresses are there and we are reaching out to the customers. "We are taking several steps within and outside the bank and also giving options to borrowers on how they can repay the loans. We are monitoring closely and, as of now, I don't see much of a challenge," she said. The lender's gross non-performing assets in the home loan segment is 0.67-0.68 per cent, its Chairman Dinesh Khara had said last month. ET Realty India

One out of five Indian UHNWIs planning to buy a new home in 2021: Report

3/2/2021 12:56:00 PM

One out of five of India's ultra-high-net-worth individuals (UHNWIs) plan to buy a new home in 2021 compared to one out of 10 in 2020, according to Knight Frank's Wealth Report 2021. An UHNWI is defined with $30 million (about ₹217 crore) or more. The preferred investment locations for ultra-wealthy Indians are largely concentrated in domestic market followed by preferences in international markets of the United States, the United Kingdom, Singapore and the United Arab Emirates. Globally, about 26% of the ultra-wealthy also plan on purchasing a home in 2021, up against 20% of 2020. The pandemic-induced residential mini-boom is expected to continue through 2021. Knight Frank estimates this demand to fuel price rises of up to 7% this year for key markets globally. In terms of attributes while choosing a new home, transport links, internet connectivity and leisure amenities close-by are of prime importance to Indian UHNWIs. Office and logistics emerged as the top two real estate sectors of interest to UHNWIs for investments in India, while globally it was the residential private rented sector and logistics, which are the top two asset classes of choice. Indian UHNWIs have 17% of their wealth allocated to property investments compared to 21% globally. "The pandemic is super-charging demand for locations that offer a surfeit of wellness -- mountains, lakes, and coastal hot-spots," said Liam Bailey, global head of research at Knight Frank. "Demand is especially strong for rural and coastal properties, with access to open space being the most highly desired feature." Source: Hindustan Times India

Bengaluru, Pune, NCR In High Demand For NRIs Eyeing Luxury Homes: Survey

2/27/2021 11:44:00 AM

In an interesting twist in the post-COVID-19 real estate landscape, NRIs are once again scouting for Indian luxury homes. As per ANAROCK’s latest consumer survey, at least 73 per cent NRIs now prefer properties priced between INR 90 lakh to INR 2.5 Cr. In the pre-COVID survey (H2 2019), just 41 per cent preferred properties within this price bracket - most favoured affordable and mid-segment homes. 3 and 4 BHK options currently top their wish-list. The IT hubs of Bengaluru (24%) and Pune (19%) are seeing the highest NRI demand. Collectively, these two cities saw approx. 48,370 homes sold in 2020 - accounting for a 35% sales share among the top 7 cities. Prashant Thakur, Director & Head - Research, ANAROCK Property Consultants says, “The COVID-19 pandemic has increased NRIs' emotional association of long-term security with physical assets. A total of 63 per cent of the polled NRIs state this as their reason for buying homes in India now. They are also driven by the uncertainties posed by COVID-19. Luxury properties have emerged as a hot favourite with NRIs because of the depreciating rupee value translating into greater buying power, coupled with ongoing developer discounts and offers. A majority of NRIs is buying for end-use, not as investments.” Top Preferred Cities for Investment Bengaluru 24% Pune 19% NCR 16% MMR 14% Hyderabad 12% Chennai 10% Kolkata 5% Source: ANAROCK Survey According to the survey, at least 67 per cent of the polled NRIs are looking for ready-to-move-in homes. If we consider the overall survey trends (including NRIs and resident Indians) just 29 per cent preferred to buy RTM homes, with another 27 per cent respondents preferring under-construction properties that will be delivered within a year. Of the total 24 per cent survey respondents who already booked properties in the last six months, at least 38 per cent were NRIs looking to make the most of the prevailing market conditions in India, including discounts, offers and lowest-best home loan rates. The survey results shows that 86 per cent of the polled NRIs will only consider properties by branded developers who have the highest project completion capabilities, resulting in the lowest execution risk. Another reason for this choice is NRIs' desire to buy into projects with international-grade amenities. Preferred Construction Stage RTMI 67% To be ready in 6 months 14% New-launches 10% To be ready within a year 9% According to the survey, most of the polled NRIs seeking property in India are aged between 35-45 years of age. Among all NRI respondents who participated in the survey, close to 68% considered real estate as the best asset class for them at this time. Regarding their outlook on residential property prices, at least 44% of respondents felt that prices will remain stable in the short-term (i.e. 12 months), while 27% feel they will increase during the year. Over the long term (i.e. in 5 years), 92% NRI respondents think prices will increase. Source: Business World India

Chandigarh railway station revamp project: IRSDC invites bids for four land parcels

2/25/2021 12:40:00 PM

Indian Railway Stations Development Corporation Ltd (IRSDC) on Saturday, February 20, invited Request for Proposal (RFP) to lease vacant land parcels for mixed-use development as part of the Chandigarh Railway Station redevelopment project. The bids have been invited from "interested entities for mixed-use development of land parcels on lease rights basis up to 99 years," IRSDC said in a release. The bids are for four land parcels, "12,427 sqm; 15,027 sqm; 17,890 sqm and 11,347 sqm spanning across 56,691 sqm. of land, with a total allowable Built-Up Area (BUA) of 2,32,341 sqm". According to IRSDC, interested parties can bid for all four land parcels or can also bid for individual land parcels, as per their choice. Alternate Investment Funds (AIF), or Foreign Investment Funds, can also participate in the bid, the release added. The pre-bid meeting will be held on March 12, 2021, and the deadline for bid submission is April 16, 2021. "Chandigarh Railway Station will be developed into a world-class transport hub to offer a superior travel experience to passengers. These vacant land parcels, which are part of the Chandigarh railway station redevelopment, are suitable for a mixed-use development that will accentuate real estate prospects in the vicinity. The redevelopment will also boost tourism, generate employment and have a cascading impact on the local economy," said SK Lohia, Managing Director and Chief Executive Officer, IRSDC The Ministry of Railways has initiated the redevelopment of railway stations programmed across India, driven by the participation of private players as a part of PPP projects. Currently, the redevelopment of 123 stations is in progress, out of this, IRSDC is working on 61 stations and Rail Land Development Authority (RLDA) is working on 62 stations. As per current estimates, the total investment needed for the redevelopment of 123 stations along with real estate development is about Rs 50,000 crore, according to IRSDC. Source: Business Today Chandigarh

Noida airport: Residential growth along expressway likely in 4 yrs, say developers on UP budget

2/24/2021 1:16:00 PM

The various highways and expressways will see real estate development around them, said Mahagun Group director Dhiraj Jain UP govt's 2021-22 budget has made a provision of ₹2,000 crore for the upcoming Noida International Airport. After Uttar Pradesh government presented the state budget 2021-2022, dedicating a huge chunk of it for the development of Noida airport, real estate developers expressed hope that the region around the airport could see good interest in residential development in four years. The comments come after the UP government earmarked ₹2,000 crore for expanding airstrips from two to six at the upcoming Noida International Airport in Jewar and also announced establishment of an 'electronic city' near it along the Yamuna Expressway. "Earmarking such large amounts and clearly articulating the vision for Jewar airport are welcome. Jewar Airport will inject jet fuel in the regional economy of the area. Already manufacturing companies are actively considering the Yamuna expressway area because of the upcoming airport. Warehousing companies will follow," CREDAI NCR president Pankaj Bajaj said. "Residential developments along the expressway will see good interest in the next four years," Bajaj said. CREDAI is the apex body of real estate developers with its chapters across the country and regions like the NCR. Ajnara Group CMD Ashok Gupta said the budget has given impetus to all-round development, which includes infrastructural development and is a good sign for the real estate sector in the state. "In fact, the announcement of the electronic city near Jewar will give a boost to the projects on Yamuna Expressway, which is already getting the attention of the buyers and investors," Gupta said. Mahagun Group director Dhiraj Jain said the state government has been showing its intention for development, and the budget is an extension of that thought process. "The focus on infrastructure and employment will help the real estate sector grow. The various highways and expressways will see real estate development around them," he said. Sikka Group MD Harvinder Singh Sikka hoped the announcement about the 'electronic city' will push infrastructure development along the Yamuna Expressway. "The expressway is the centre of attraction since the time Jewar airport was announced and got further boost when the work started here recently. In the coming few months, the appreciation on this stretch will be good, and hence it is an opportunity for the investors as well as the end-users," Sikka said. The Uttar Pradesh government's 2021-22 budget presented on Monday made a provision of ₹2,000 crore for the upcoming Noida International Airport and also announced establishing an ‘electronic city’ near the airport. A decision has been made to increase the number of airstrips at the airport from two to six and ₹2,000 crore has been earmarked for this project, according to the budget proposals presented by Finance Minister Suresh Kumar Khanna in the presence of Chief Minister Yogi Adityanath. Work on the first phase of the Noida International Airport is underway. The airport, being built at an estimated cost of ₹29,560 crore, is touted to be the biggest in India upon completion. The district also found favour from the government in the IT and Electronics category in the last budget of the Yogi Adityanath-led government before the state assembly polls next year. Earlier, a top senior government executive told news agency PTI that work on the upcoming Noida Airport is progressing as scheduled and the first flight is expected to take off by December 2023 or January 2024. Also, the resettlement and rehabilitation of over three thousand families who are getting displaced due to the mega greenfield project is likely to be completed by May 2021, Noida International Airport Limited (NIAL) CEO Arun Vir Singh said. Source: Mint Noida

Residential real estate witnessing K-shaped recovery on accelerated consolidation, better credit availability: ICRA

2/23/2021 11:34:00 AM

The residential real estate sector is witnessing a K-shaped recovery with large listed players recovering at a much better pace than smaller, unorganised players, as per an ICRA analysis. But with smaller players making up around 80 percent of the market, the adverse impact on those developers will weigh heavily on the sector as a whole, it said. Recovery after a recession is called K-shaped when different parts of the economy recover at different rates or times. Larger developers have been benefitting from demand consolidation and better credit availability. In terms of launches as well, their market share has increased to 22 percent in nine months of FY2021 from 11 percent in FY2020. While the broader market remained 24 percent below pre-COVID levels on a YoY basis in Q3 FY2021 and 39 percent below pre-COVID levels in 9M FY2021, the top 10 listed realty players witnessed a 61 percent YoY growth in Q3 FY2021 and 13 percent growth in 9M FY2021, it said. This disparity in sales growth rates led to accelerated consolidation in the aftermath of COVID-19 and the market share of the top 10 listed realty players has nearly doubled in the current year, increasing from 11 percent of sales in FY2020 to 19 percent in 9M FY2021, it said. “For the broader market, Covid-19 triggered one of the worst demand crashes in recorded history, with housing sales volumes witnessing a Y-o-Y decline of 62 percent during Q1 FY2021 across the top eight cities of the country. While the de-growth was limited to 24 percent by Q3 FY2021, larger players recorded a much better recovery, registering Y-o-Y sales growth of 61 percent in Q3 FY2021,” said Shubham Jain, senior vice president and Group Head at ICRA. Homebuyers had been leaning towards developers with an established track record of on-time and quality project completion even prior to the onset of the pandemic. This had resulted in large, listed players reporting healthy sales and collections in recent years, despite the prevailing liquidity crisis and unfavourable supply-demand dynamics. The implementation of RERA and GST had already been supporting the market position of these larger players. Post COVID-19, better demand prospects, strong balance sheets and adequate liquidity have enabled larger developers to weather the storm better than smaller players, who have been finding it difficult to cope with the prevailing market conditions, he said. Gradual unlocking of the economy and pent-up demand has been supporting housing sales. Moreover, the repo-linked lending rate (RLLR) for home loans has touched a historical low. This has resulted in improved affordability and has been stimulating house purchases, at least from larger, reputed developers with a strong track record of timely project completion and quality construction. Attractive discounts/payment schemes have provided further stimulus. With the onset of the pandemic, home/holiday-home ownership has also become more important, the analysis noted. Overall operating cash flows for most developers, including the listed players, are expected to witness moderation in the current financial year, resulting in increased reliance on available liquidity and/or refinancing to meet committed outflows. However, the larger, organized players have maintained considerable liquidity buffers, and have low levels of leverage, together with high financial flexibility. These aspects have provided significant support in managing event-related shocks. Thus, most large organized players with established brands, low leveraged balance sheets and adequate liquidity are benefiting from the acceleration in consolidation in the residential real estate segment. Range bound prices and low home loan rates are also expected to further support sales for these players. “Nonetheless, with smaller players making up around 80percent of the market, the adverse impact on those developers will weigh heavily on the sector as a whole. Timely liquidation of the high unsold inventory, particularly in over-supplied regions such as MMR and NCR, and adequacy of operating cash flows to meet debt obligations would be key look-out areas, with most of the smaller residential developers having built-up unsustainable debt levels on account of slow-moving inventory or high investment in land assets,” Jain said. Source: Money Control Chandigarh

Real estate again emerges as best asset class for investment: Survey

2/18/2021 2:10:00 PM

With work-from-home being a viable option today, many prospective homebuyers are looking at the peripheral areas that offer bigger homes and a better lifestyle at relatively affordable prices. Homebuyers preference to mitigate risks is also at all-time high with more than 61% preferring to buy from branded developers even if it is relatively costlier, reveals a CII-ANAROCK COVID-19 Sentiment Survey. As per the survey, the preference for real estate as an asset class has once again reached close to pre-COVID levels vis-à-vis the lockdown period in March and April when we saw a dip (to 48%) due to the-then prevailing uncertainties. The rising preference is appropriately depicted in H2 2020 housing sales of ~80,400 units across the top 7 cities compared to 57,900 units in H1 2020, an increase of 39%. Among various asset classes for investment like equities & mutual funds, FDs and gold, real estate continues to be the first choice with 57% respondents in favour of it. Interestingly, the stock market – despite being volatile in nature – is the second preferred choice with 24% votes. Preference for gold saw a sudden rise during the lockdown period with 18% in its favour then – much above FDs. However, in the present survey, we can see slight dip in its preference as just 12% respondents now prefer it in the current scenario. Despite being risk-free, low interest rates has brought down investor interest in FDs and is now the last choice among all other. Commenting on the survey, Anuj Puri, Chairman, ANAROCK Group, said, “Amidst the prevailing work-from-home culture and the economy showing green shoots of revival, we tried to gauge the mood of the prospective homebuyers and analyse their preferences. We saw that consumer preferences have altered significantly post the pandemic and new trends are seen to be emerging. Notably, real estate saw increasing interest against all other asset classes like stock market, FDs and gold post COVID. 62% respondents consider ‘now’ to be an ideal time for buying a home amidst prevailing lowest-best home loan rates and developer discounts & offers. Homeownership has gained top priority even for the millennials who previously shied away from it.” In a major development, out of all respondents, 24% have already booked their property while 62% consider ‘now’ to be an ideal time to enter the real estate market. The Indian residential market is now seen to be heavily dominated by end-users. As many as 74% respondents looking to buy a property now are doing it for self-use while just 26% are looking at it from an investment perspective. In comparison, during the lockdown period, the share of investors was higher at 41%. Ready-to-move-in property continues to be the most preferred (29% respondents) among the prospective buyers. However, in comparison to both pre-COVID and lockdown period surveys, we saw a dip in its preference – at least 17% since the lockdown period and 6% since the pre-COVID levels. One major factor influencing this change could be the fact that post COVID, the new supply was largely dominated by branded developers and buyers considered it safe to buy from them. Also, there is limited inventory available in the ready category. Another possible reason is that developers have doled out multiple discounts and offers including flexible payment plans for their under construction projects which attracted prospective buyers. Interestingly, in the post-COVID survey results, property which will be ready within 1 year is the second most preferred choice for 27% property seekers. Affordable properties (< Rs 45 lakh) emerged as the most preferred in the post-COVID survey, accounting for over 40% share as against 31% in the pre-COVID survey – an increase of 9%. Over 38% of this affordable housing demand in the post-COVID survey came in from Delhi-NCR, followed by 21% from Kolkata. Rs 90-lakh budget range property took a backseat this time and stood at the second spot. Altogether, 67% of this demand came in from Bengaluru, Pune and Chennai. Availability of cheaper home loans was the key factor for majority of these respondents. Further, around 20% property seekers preferred Rs 90 lakh – Rs 1.5-cr budget properties – increasing by 2% against the pre-COVID survey. Demand for luxury properties (> Rs 1.5 cr) also increased – from 9% in the pre-COVID survey to 11% post-COVID. Nearly 58% of this demand is from Mumbai (MMR), followed by Bengaluru and Hyderabad. Source: Financial Express India


2/17/2021 4:18:00 PM

JAMMU, Feb 15: In a fresh move, the Jammu and Kashmir Government has started a process for the imposition of Property Tax through Urban Local Bodies (Municipal Corporations, Municipal Councils and Municipal Committees). Moreover, Property Tax Board will be constituted shortly on the recommendations of the Housing and Urban Development Department to deal with all the aspects relating to assessment and valuation of properties across the Union Territory. The latest notification dated February 12, 2021 issued by Dheeraj Gupta, Principal Secretary to the Government, Housing and Urban Development Department. “In exercise of the powers conferred by the Jammu and Kashmir Property Tax Board Act, 2013, the Jammu and Kashmir Municipal Act, 2000 and the Jammu and Kashmir Municipal Corporation Act, 2000, the Government hereby directs that for the levy of Property Tax on any land or building, the value of land as notified in terms of Jammu and Kashmir Preparation and Revision of Market Value Guideline Rules, 2011 (circle rate) shall be a key determinant of the value of the property apart from the nature of construction, the kind of use, the age of the property or any other relevant consideration”, read the notification. The Property Tax Board, or as the case may be, the Municipal Corporation, the Municipal Council or Municipal Committee concerned shall ensure that the value of land so notified is adequately factored in while determining the unit area values for the levy of Property Tax. “Imposition of Property Tax is one of the pre-conditions fixed by the Government of India for availing 2% additional borrowings under AtmaNirbhar Bharat Abhiyan and this issue was debated in a number of meetings of the Committee of Secretaries chaired by the Chief Secretary BVR Subrahmanyam in the recent past”, sources said, adding “with the imposition of Property Tax, the J&K Government would be able to get Rs 503 crore from the Government of India”. In the month of October last year, the Union Ministry of Home Affairs (MHA) had empowered the Jammu and Kashmir UT administration to impose Property Tax through the Municipal Corporations, Municipal Councils and Municipal Committees in their respective areas. The powers were vested by way of several amendments in the Jammu and Kashmir Municipal Act, 2000 and Jammu and Kashmir Municipal Corporation Act, 2000 carried through the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order, 2020. In the J&K Municipal Act, 2000 whereby the Municipal Councils and Committees have been established, the Ministry of Home Affairs has substituted Sections 72 to 80 and new Section 72 states: “Unless exempted under this Act or any other law for the time being in force, Property Tax shall be levied on all lands and buildings or vacant lands or both situated within the Municipal area. The Property Tax shall be levied at such percentage not exceeding 15 per cent of the taxable annual value of land and building or vacant land or both as the Government may, by notification, from time to time specify”. Similarly, Section 73 reads: “The taxable annual value of land and building or vacant land assessable to taxes under this Act shall be calculated by multiplying the corresponding unit area value with the total build-up area of a building or the total area of land, as the case may be, minus depreciation, at such rates as may be prescribed, depending on the age of the building”. However, a proviso has been incorporated vide which the Municipality may, after passing a resolution, fix a lump sum amount not exceeding the sum payable as annual tax for certain categories of properties. However, the resolution shall come into effect only after it is approved by the Government. The Property Tax payable shall be reduced by 25 percent in respect of a self-occupied building used for residential purpose and such class of self-occupied non-residential building as may be notified by the Government on the recommendation of the Municipality. Moreover, there is a provision vide which a person liable to pay the Property Tax shall pay the same in two equal instalments. “Every owner or occupier, who is liable to pay Property Tax, shall every year submit to the Executive Officer or any officer authorized by him in this behalf a return in the prescribed form within the stipulated period and in the prescribed manner”, the new Sections read. Moreover, there is a provision for scrutiny of the return filed and in case of non-compliance action will be initiated. Similar provisions have also been incorporated by way of amendments in Jammu and Kashmir Municipal Corporation Act where-under the Jammu and Srinagar Municipal Corporations have been established. As per Jammu and Kashmir Property Tax Board Act, the Government may by notification establish the Board, which shall be corporate body and competent to acquire, hold and dispose of any property both movable and immovable to enter into contracts and to do all things necessary for the purposes of the Act. The Board shall consist of a Chairperson and such number of members not exceeding two as may be determined by the Government. The Chairperson shall be the person who is or has been an officer of the Government not below the rank of Commissioner/Secretary. The other members shall be persons having knowledge and experience in the field of municipal administration, valuation of properties, accountancy, law and management. Source: Kashmir Times Jammu

Builders seek regulatory body for steel, cement sectors

2/15/2021 11:45:00 AM

The Joint Action Committee (JAC) of BAI, CREDAI, NAREDCO, SABCA and Workers’ Associations will stage a protest near Metropolitan Hotel here on Friday, demanding that the State and Central governments take necessary steps to establish a regulatory authority for steel and cement sectors. Addressing a press conference here on Thursday, JAC representatives said that constituting a cement regulatory authority for the sector would curb cartelisation and ‘undue profiteering’ by manufacturers. Similarly, authority for the steel sector was necessary to keep a tab on irrational hike in prices. The steel and cement companies had cartelised pushing the construction industry into doldrums, they said. The JAC leaders said a regulatory authority would prevent manufacturers from indulging in unethical trade practices which had been causing irreparable damage to the growth and hurting the interests of the construction industry. The steep rise in steel and cement prices had hit the industry below the belt. Resultantly, the construction costs had gone up phenomenally. Bank loan instalments were overdue for those who had taken a bank loan. An increase in the rate of interest had also created a financial burden on the builders, they said, adding a protest is being organised to highlight these issues. Builders Association of India (BAI) State chairman D. Pankaj Reddy, CREDAI AP chapter chairman RV Swamy, Y.V. Ramana Rao (CREDAI), National Realestate Development Council (NAREDCO) Vijayawada General Secretary Vamsi Krishna Vasireddy, Siva Kumar,GS Prasad and MRT Prasad of State of Andhra Pradesh Building Contractors Association (SABCA), and others spoke. Source: The Hindu Chandigarh

Hiring sees growth in education, real estate in January: Naukri

2/12/2021 5:00:00 PM

With India getting back to work, the hiring activity saw sequential growth in certain sectors including education, real estate and banking, financial services and insurance (BFSI) in January, said a new report from job portal on Thursday. The education/teaching domain sector saw an over 11 per cent increase in hiring in January 2021 vs December 2020 as colleges and schools are set to re-open in the post-Covid era. The insurance sector registered 8 per cent growth in sequential hiring as the demand for health insurance has gone up. Other key sectors such as real estate (+13 per cent), retail (+7 per cent), BFSI (+5 per cent) and BPO/ITES (+3 per cent) too have shown growth in month-over-month hiring in January 2021, said the Naukri JobSpeak report. However, sectors such as auto/ancillary and telecom are still experiencing a slowdown in sequential growth as the country gradually returns to normalcy. The research showed that key tier-2 cities saw an uptick in recruitment activity in January 2021 as hiring in Vadodara, Chandigarh, and Jaipur grew sequentially. However, all metro cities namely Bengaluru, Hyderabad, Kolkata, Mumbai, Chennai and Delhi saw a marginal drop in hiring at a month-over-month level. Job roles in sales/business development and banking/insurance domains also saw an increase in hiring sequentially. "While overall hiring is down by 19% at a Y-O-Y level in Jan'21, it is interesting to see sectors like education, BFSI and real estate show growth in hiring sequentially," Pawan Goyal, Chief Business Officer,, said in a statement. "Emerging cities led by Vadodara and Chandigarh are driving hiring and have outperformed metros as they record a better recovery at a M-O-M level." Overall, hiring activity in the month of January declined by 19 per cent vs last year, said the report. Source: Business Standard Chandigarh

The RERA rule that gives hope to homebuyers stuck with real estate projects

2/9/2021 11:26:00 AM

Hundreds of buyers had invested in a project located along the Yamuna Expressway way back in 2011, paying a total amount of Rs 100 crore of which 10 percent was paid by the builder to the authority. Work on the project stalled in 2015. Two years ago, a group of buyers decided to approach Uttar Pradesh Real Estate Regulatory Authority (UPRERA). The regulatory body after several hearings decided to cancel (deregister) the registration of the Sampada Livia project after complaints of project delay and alleged irregularities by promoter PSA Impex Pvt Ltd, and invited the buyers to take over the project and complete it themselves. “For almost five years there has been no work on site. UPRERA decided to hand over the project to the homebuyers’ body on June 6, 2020 after being satisfied by the detailed project report submitted by the buyers under which buyers have been tasked to complete all 726 units of the project within four years,” Akanksha Aggarwal, who was among the first few buyers to have booked a unit in PSA Impact, and president of the Sampada Livia Buyers (SLB) Welfare Association told Moneycontrol. UPRERA has handed over the mandate to complete the project to SLB Welfare which had earlier submitted a detailed project report (DPR), with an estimated net construction cost of ₹243.59 crore and a completion deadline of four years from the start construction of the project. The project has 726 sanctioned units, of which 355 have been sold so far. As per the Detailed Project Report submitted before the Authority, the project is cash flow positive, with a surplus of about ₹5 crore. The total estimated receivables from sold and unsold units is ₹248.49 crore. The buyers are now awaiting re-registration of the project in the name of SLB Welfare. “Rs 25 crore is the worth of the property, the builder paid only Rs 2.5 crore to the Greater Noida Authority and left us in a lurch for almost 10 years. He had collected Rs 100 crore from us. We require around Rs 240 crore to complete the project 726 units,” she said. The buyers have managed to complete the tendering process and even lined up the entire team that includes an architect, co-developer, project engineer, technical staff and even got the site cleared for work to begin. They are now awaiting re-registration of the project by UPRERA in the name of the homebuyers’ association and permission from the authority to begin construction. Of the 355 units that were sold by the builder, a balance of Rs 55 crore is yet to be received. The remaining amount will be realised by selling the remaining 371 units, which will be enough to complete the project. And if we are able to accomplish this task, successfully, this model may be emulated for other stuck projects as well, she said. UPRERA recently also allowed Jaiprakash Associates to complete Jaypee Greens Knight Court with the support of homebuyers through the association Knight Court Social Welfare Association within 15 months. The total cost of completing the remaining work on this project is close to Rs 145.5 crore out of which Rs. 40.85 crore will be contributed by the promoter and Rs 103.35 crore by the allottees. This is the second Jaypee project that UPRERA has handed over to the Association of Allottees (AOA) for construction. The first project was Kalypso Court. Kalypso Court is a housing project launched by Jaypee Associates, the parent company of embattled Jaypee Infratech, way back in 2007. Its UPRERA registration lapsed in June 2019 following which the regulator invoked Section 8 of RERA. As many as 240 homebuyers had bought into units in the four incomplete towers. Seven towers of Kalypso Court were registered under UPRERA in 2018. The project has a total of 15 towers and eight of them were completed by 2018 and did not have to be registered under UPRERA net. The original date of completion of the project was 2012. “This is proving to be a successful model. The main problem is litigation. The project can be handed over to the homebuyers’ association only once we are assured that the project will be viable – the project should be cashflow positive which means that it should have more amount that what is required to complete the project,” Balwinder Kumar, member, UPRERA, told Moneycontrol. “There are four to five such projects in the pipeline where AOA has shown interest and we will be processing those cases. The model is proving to be successful as the risks involved are few,” he said. The question here is: Can RERA Authority approach homebuyers' associations or the original developer, or for that matter bring in a third party to complete a stalled project? Interestingly, RERA can take over an unfinished realty project if it is 80 percent complete. It can act as a facilitator and work with the committee of homebuyers to complete the project under Section 8 of RERA. RERA authorities Moneycontrol spoke to said this could become a successful model to complete stuck projects going forward, especially after COVID-19, when there are bound to be more such cases wherein developers may not be in a position to complete projects due to lack of liquidity issues. "This model of completing stuck real estate projects can work and will certainly be tested post-COVID-19 because we will have many more developers falling by the wayside. It is then that the authorities would have to empower homebuyers to come forward and take on the task of completing the stalled projects with the help of RERA Authority," RERA officials said. "Prima facie, this appears to be an excellent move and will also set a very good precedent. But it is also very important to know (a) how the project will be funded and (b) if the builder has taken more money than what work has been done by him, and how RERA plans to recover excess money from him," said MS Shankar, General Secretary, Forum for People's Collective Efforts. Section 8 of RERA empowers authorities to hand over completion task to buyers' association The RERA Act clearly states that “Upon lapse of registration or on the revocation of registration under this Act, the Authority, may consult the appropriate government to take such action as it may deem fit including the carrying out of the remaining development works by a competent authority or by the association of allottees or in any other manner, as may be determined by the Authority. “Provided further that in case of revocation of registration of a project under this Act, the association of allottees shall have the first right of refusal for carrying out of the remaining development works," the Act says. There are clear provisions in RERA under which the Authority also has the power to take away the project from a particular developer and assign it to another agency to complete it. Section 8 of the RERA Act also comes into force in the event of the RERA registration getting lapsed. The authority can initiate the process for getting the remaining work completed. The first right of refusal in the process is with the association of allottees. Agreement among allottees important Agreement among all the allottees is also important. The allottees have to trust the committee. "They have to make the payment of the balance amount to the committee," experts said. Who gets to pay for the remaining construction? In these cases, some buyers may have paid 80 percent, others may have paid more. But all buyers may have to pay some amount. "They will have to show the receipts that they have so far paid and the balance money that is due from them to the committee. These amounts will be kept in a separate account and the committee will have to work with the corpus," said RERA experts. The committee will have to make do with the funds collected. They have to decide whether they would want to reduce certain specifications as funds may not be enough. "Whatever is available and whatever they can do with the balance amount, they will have to do. For example, if there is an ornate lobby, they may have to cut down on those specifications and manage with whatever they have," they said, adding that the idea is to complete the project and hand over the units to the buyers. Can it be replicated for other projects? There could be cases wherein the promoters are in jail or absconding. In those circumstances, there may not be too many choices available to buyers. RERA too can pass multiple orders but that would not have any impact because there is no entity to return monies to buyers with interest. The other option with RERA is to seal the property but in this case, the property belongs to buyers who have been waiting for possession for years. In such cases, too, this model of handing over construction to buyers may work. Source: Money Chandigarh

Delhi government reduces circle rates for residential, commercial and industrial properties by 20%

2/8/2021 3:35:00 PM

In a big relief for homebuyers and a major boost for the real estate sector, the Delhi government on February 5 decided to slash circle rates for residential, commercial and industrial properties in Delhi by 20 percent flat until September 30, 2021. The decision was taken at a cabinet meeting chaired by Chief Minister (CM) Arvind Kejriwal. The circle rates related to residential, commercial and industrial properties in Delhi have been reduced by flat 20 per cent across all categories of colonies and areas till September 30, 2021, officials said. Deputy Chief Minister of Delhi Manish Sisodia also took to tweeted that the decision will be a big relief for people willing to buy properties in the national capital. Property brokers in the capital welcomed the decision, saying that the reduction by 20% will motivate the fence-sitter buyers to make decisions quickly, “It will also help sellers in localities such as New Friends Colony, Friends Colony, Maharani Bagh, Vasant Vihar, Anand Niketan – areas where the market rate is lower than the circle rate,” said Dipesh Garg, co-founder, "The reduction in circle rates has been a long-awaited and highly controversial topic, especially for properties falling in "A" category, where the circle rate value of properties was much higher than the actual market value. The reduction in circle rates will incentivise property deals in Delhi. However, this reduction has been announced for a limited period of time and the government needs to address this with a long term perspective," said Yudhist Singh of YNS & Associates, a law firm based in Delhi. Circle rates refer to the minimum rate notified by the government through the registrar or sub-registrar office of Delhi for registration of property transactions. Stamp duty is to be paid on the higher of the declared transaction value and the value calculated as per the circle rate chart applicable for the sector or area of Delhi. Circle rates tend to vary across various areas of Delhi depending upon the market value of the area and the facilities that are available in that area. Delhi government has divided the properties in entire Delhi city into 8 categories – Category A, Category B, Category C, Category D, Category E, Category F, Category G, and Category H. Most expensive posh areas of the city are part of Category A while Category H has the lowest value areas of the city. The government generally assigns a higher circle rate to commercial properties and lower rates for residential properties. Circle rates also depend upon the type of property. The registration value of apartments in Delhi are different from those of plots and independent houses even within the same area. Real estate experts said that the move may also lead to an increase in property transactions, especially in Grade A micro-markets, where there is a circle rate and market rate mismatch. “Reduction in circle rates even if it is for six months is a great move by the government. This step indeed will propel buy and sell activity, especially in a few grade-A category micro markets which otherwise have been suffering due to the circle and market-rate mismatch. A move of this nature will also enable owners of large assets to mobilise transactions which otherwise were challenging given the size and consequent values,” said Shveta Jain, Managing Director, Residential Services, Savills India. Ramesh Menon of Certes Realty Ltd is of the opinion that the decision will fuel demand for properties across segments. “During COVID-19 vacancy rate went up and the occupancy rate came down. The intent is clearly to fuel demand,” he told Moneycontrol. He said that the decision may also be linked to the tax relief for homebuyers and developers buying or selling below the circle rate by up to 20% which has been extended in Budget 2021. This is applicable from the assessment year 2021-22. “The reduction in circle rates will make things more affordable and should increase the number of transactions. The decision of the Delhi government may also lead other states to take a similar step in the near future,” said Achal Raina, COO, Raheja Developers. Mani Rangrajan, the Group COO of, and, also said that circle rates have a direct bearing on the actual market rates. "A reduction in circle rates not only will soften property and land prices in Delhi but also put pressure on other adjoining realty markets of NCR. This will bring in a new set of buyers to the market,” Rangrajan said. "Reducing circle rates, even for only a limited period, is great news for the Delhi housing market because it helps to further bring down property prices, which are very high despite not having risen for quite a long time," Anuj Puri, Chairman- ANAROCK Property Consultants said. While taking into considering the strong revival post lockdown easements, this decision augurs well for the market, he said. "Market rates, which are invariably higher than circle rates, are nevertheless influenced by them as they act as a floor price for any property transaction. By bringing down the circle rate, the Delhi government seeks to create a conducive environment for accelerated housing absorption in the market," Puri added. Source: Money Control Chandigarh

Industry experts advise to invest in commercial segment in real estate this year

2/4/2021 11:25:00 AM

This year began with the nationwide vaccination drive that everyone was looking forward to, which will work as a growth booster for all the sectors. And the real estate sector has not been untouched from the global crisis, which according to the industry experts is going to revive once again. With all the projects to be back on track, the commercial real estate sector is one particular segment that all investors have been eyeing on. The reason behind industry experts advising to invest in commercial real estate projects is the high demand of the new office spaces as many companies are anticipated to reopen with the end of the pandemic. Along with this, there are many more opportunities in the commercial segment promising a long term income to the investors. To add on to this, 'virtual space' is a trending element in the commercial segment, which is ideal for investors who are not interested in the maintenance or property type, but in the long term returns. As per the industry experts, to name a few projects that are trending in the commercial real estate sector in 2021 are M3M ECO (Everybody Can Own) and Element One by Satya. On the other hand for high end investment, the investors should consider 32nd Avenue Milestone, which is India’s first GRIHA certified commercial property that also hosts the headquarters of speculator brands, such as The Hans Motors and MG Motors. These mentioned projects are pre-leased and ready to move in. According to Mr. Sunil Kumar Sisodiya, chairman and founder of Geetanjali Homestate, “COVID took us through such unprecedented times, where we learned that we all should invest in real estate to have a secured future. And since the commercial segment is going to be the growth driver for the real estate sector this year with many projects on the run, investors can choose to invest as per their budget from the various options in the market.” Source: National Herald Chandigarh

Union Budget 2021 | FM Sitharaman extends affordable housing benefit until March 2022

2/3/2021 1:16:00 PM

Finance minister Nirmala Sitharaman on February 1 extended the affordable housing benefit by one more year until March 2022. The FM also announced tax exemption for rental housing projects in her Budget speech. The income tax rebate of Rs 1.5 lakh for affordable home loans will continue until March 2022, she said. In order to promote supply of Affordable Rental Housing for the migrant workers, it is also proposed to allow a new tax exemption for the notified Affordable Rental Housing Projects, she said. The finance minister also said that the government is committed to provide affordable rental housing for migrant workers. “With focus on affordable housing, Rs 1.5 lakh principal deduction for affordable housing has been extended till 31 March 2022. This is a welcome move to give a necessary push to housing for all initiative,” said Arpit Mehrotra, Managing Director, Office Services (South) at Colliers International India. “As anticipated, affordable housing and rental housing got a big boost with the government extending the period for extra deduction of Rs 1.5 lakh available for loans up to 31st March 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment,” said Anuj Puri, Chairman - ANAROCK Property Consultants. As per ANAROCK Research, affordable housing already accounts for more than 35 percent of the supply across the top 7 cities in the country. The Housing for All by 2022 initiative was launched by the Modi government within five months of assuming office. It’s all about ensuring a home for every Indian by 2022. To boost affordable housing and achieve the vision of Housing for all by 2022, the government (Central and State) have undertaken several initiatives, such as Pradhan Mantri Awas Yojana (PMAY) that aims to build 1 crore homes in urban and rural India by 2022. Affordable housing has also been accorded infrastructure status, ensuring that developers in this segment have access to cheaper loans. The Credit Linked Subsidy Scheme for the Middle Income Group (CLSS for MIG) was announced by Prime Minister Narendra Modi on December 31, 2016 and was earlier extended twice till March 2019. The government in the last week of December 2018 extended the interest subsidy scheme till March 2020 for first time urban home buyers who have annual income between Rs 6 lakh and Rs 18 lakh. The Affordable Rental Housing Project scheme was announced by Finance Minister Nirmala Sitharaman as part of the Rs 20 lakh crore economic package to deal with the COVID-19 pandemic. Source: Money Control Chandigarh

One out of five Indian UHNWIs planning to buy a new home in 2021: Report

2/3/2021 12:22:00 PM

One out of five of India's ultra-high-net-worth individuals (UHNWIs) plan to buy a new home in 2021 compared to one out of 10 in 2020, according to Knight Frank's Wealth Report 2021. An UHNWI is defined with $30 million (about ₹217 crore) or more. The preferred investment locations for ultra-wealthy Indians are largely concentrated in domestic market followed by preferences in international markets of the United States, the United Kingdom, Singapore and the United Arab Emirates. Globally, about 26% of the ultra-wealthy also plan on purchasing a home in 2021, up against 20% of 2020. The pandemic-induced residential mini-boom is expected to continue through 2021. Knight Frank estimates this demand to fuel price rises of up to 7% this year for key markets globally. In terms of attributes while choosing a new home, transport links, internet connectivity and leisure amenities close-by are of prime importance to Indian UHNWIs. Office and logistics emerged as the top two real estate sectors of interest to UHNWIs for investments in India, while globally it was the residential private rented sector and logistics, which are the top two asset classes of choice. Indian UHNWIs have 17% of their wealth allocated to property investments compared to 21% globally. "The pandemic is super-charging demand for locations that offer a surfeit of wellness -- mountains, lakes, and coastal hot-spots," said Liam Bailey, global head of research at Knight Frank. "Demand is especially strong for rural and coastal properties, with access to open space being the most highly desired feature." Source: Hindustan Times Chandigarh

India only key nation with double-digit growth in FY22: IMF

1/29/2021 11:46:00 AM

The Indian economy will stage a strong rebound and grow as much as 11.5 per cent on year in FY22, the International Monetary Fund (IMF) said on Tuesday, revising up its earlier forecast of an 8.8 per cent expansion. With this, India will emerge as the only key nation to record a double-digit growth and reclaim the status of the world’s fastest-growing major economy, it added. India’s real gross domestic product (GDP) shrank as much as 8 per cent in FY21 due to the Covid-19 pandemic, the multilateral body said. In FY23, the economy will likely grow 6.8 per cent, it added. Read |India took ‘very decisive’ steps to deal with coronavirus pandemic and its economic consequences: IMF chief In its latest World Economic Outlook Update, released Tuesday, the IMF predicted that China would grow 8.1 per cent in 2021, followed by Spain (5.9 per cent) and France (5.5 per cent). China, which was the only major country to register a growth rate of 2.3 per cent in 2020, will expand 5.6 per cent in 2022, the IMF said. Last October, it had projected an 8.8 per cent real GDP growth for India in FY22, highest globally. For the current fiscal, however, the IMF had forecast a record 10.3 per cent contraction. IMF Managing Director Kristalina Georgieva this month said India “actually has taken very decisive action, very decisive steps to deal with the pandemic and to deal with the economic consequences of it”. “What we see is that transition, combined with policy support, seems to have worked well. Why? Because if you look at mobility indicators, we are almost where we were before Covid in India, meaning that economic activities have been revitalized quite significantly,” Georgieva had said. The Finance Ministry had also exuded confidence that India would recover at a fast pace and reach pre-Covid levels by the end of this fiscal unless a second wave of cases was triggered by a fatigue with social distancing. —FE Financial Express Chandigarh

Good news! Real Estate Sentiment scores at a year-high in Q4 2020

1/28/2021 11:14:00 AM

The score had turned negative in Q1 2020 after the COVID-19 outbreak and had remained in the pessimistic zone during Q2 2020, as the impact of the stringent lockdowns became apparent on businesses. The Current Sentiment score jumped considerably to 54 in Q4 2020 from 40 in Q3 2020, entering the optimistic zone for the first time in 2020, reveals the 27th Edition of Knight Frank- FICCI-NAREDCO Real Estate Sentiment Index Q4 2020 (October – December 2020) Survey. The score had turned negative in Q1 2020 after the COVID-19 outbreak and had remained in the pessimistic zone during Q2 2020, as the impact of the stringent lockdowns became apparent on businesses. It revived in Q3 2020 on the back of improving economic health and pent-up demand. The residential segment outlook was supported by pent-up demand, festive demand, multi-decadal low home loan interest rates, attractive residential prices and state government incentives such as reduction of stamp duty in Maharashtra. Residential sales reached pre-COVID levels (2019 quarterly average) by Q4 2020. The Future Sentiment score also climbed up to 65 in Q4 2020 from 52 in Q3 2020, mirroring the strong recovery expectations prevalent in the market. Stirring demand and festivities of Q4 2020 gave a strong fillip not just to the real estate sector but also to the economy at large. The improvement in high-frequency indicators recorded since September 2020 continued in December 2020 as well. Goods and Services Tax (GST) collections in December 2020 are at a record high whereas the Purchasing Managers’ Index (PMI) for manufacturing recorded a fifth straight month of expansion. Geographically, the western part of the country saw the sharpest jump in Future Sentiment Index. This zone’s Future Sentiment jumped to 66 points in Q4 2020 from 47 points in Q3 2020. With respect to stakeholders, both developers and non-developers (which include banks, NBFCs and PE funds) recorded an improvement in Future Sentiment score in Q4 2020. On the macroeconomic front, 82% of the survey respondents opined that the economy would grow further in the coming six months as opposed to the 57% respondents with the same view in Q3 2020. Similarly, the share of survey respondents with the opinion that economic health will worsen in the next six months went down substantially to 7% in Q4 2020 from 31% in Q3 2020. In terms of credit availability, 87% of the Q4 2020 survey respondents believed that the funding scenario would either improve or continue to remain the same over the next six months. Further, 77% of the Q4 2020 survey respondents were of the opinion that residential sales would increase over the next six months, up from 66% in Q3 2020. With regards to the office market, 60% of the Q4 2020 survey respondents, up from 47% in Q3 2020, believed that office leasing activity would increase over the next six months. Commenting on the same, Shishir Baijal, CMD, Knight Frank India, said, “Both the Current and Future Sentiment scores in Q4 2020 have seen great surge in the latest survey backed by revival in both residential and office market real estate that have been highly encouraging. The sector saw a lift in the market’s mood and increased stakeholder expectations of a stronger recovery in the next six months. As we begin our journey into 2021 with a positive outlook, it is important to closely watch the performance of the key economic indicators in the coming months to check the sustainability of the growth seen in the last two quarters of 2020. Equally crucial is the development of the vaccine and its widespread availability for the masses. These two factors will largely determine the performance of the real estate sector in the coming months.” Dr. Niranjan Hiranandani, National President – NAREDCO and ASSOCHAM, and Founder & MD, Hiranandani Group, said, “The survey mirrors recovery expectations of not just real estate, but the economy. Investments in real estate over the recent past reflect positive sentiments on part of investors, domestic as also global, on the resurgence in the Indian economic growth story. This is a clear indicator of the bullish growth story of the Indian real estate and reflects on the growth prospects of 270 allied industries as also job creation. Recently, we have seen this investment being in the office spaces segment, which reflects the confidence of investors in the Indian GDP’s positive growth potential. Stakeholder outlook for the office market has improved substantially in Q4 2020 as leasing activity gained momentum.” The residential market outlook has revived further in Q4 2020, across all parameters, reflecting the increased traction in this segment. “The impact of renewed consumer demand for residential realty has resulted in high levels of registration data, these transactions have lifted market sentiment. This bull run will be sustainable, growing through 2021, in the backdrop of the anticipated positive Union Budget – scripting the real estate revolution in India,” Hiranandani added. It may be noted that a score of above 50 indicates ‘Optimism’ in sentiments, a score of 50 means the sentiment is ‘Same’ or ‘Neutral’, while a score below 50 indicates ‘Pessimism’. Source: Financial Express Chandigarh

Pandemic fallout makes home-buying an attractive prospect

1/27/2021 12:10:00 PM

If sliding real estate prices weren’t compelling enough a reason to purchase your dream home last year, market analysts have placed their bet on residential real estate as a top asset class for this year too. Almost decade-low real estate prices coupled with low interest rates, analysts note, are ideal for anyone looking to purchase a home. The real estate market was among the worst hit during the pandemic, and the fiscal measures announced by the government aimed at increasing demand for affordable housing and other measures such as the stamp duty waivers now being offered by top developers are poised to benefit buyers in the affordable housing segment (priced up to Rs 45 lakh). Another reason for the declining prices in the housing segment, according to a recent from PropTiger report, is the unsold inventory from last year, which is pushing realtors to first selling existing stock. “I was actually surprised to find so many options for ready-to-move apartments this year compared to last year. There are multiple choices in the market right now. We know that investing in an unfinished project is risky considering market uncertainty and delays on the part of builders. Ready-to-move properties are far better that way,” said Priya Jain, a software engineer working in Bengaluru. In many markets, negotiations with agents or builders may even lead to discounts to the tune of 10-15 per cent, but some warn that buyers should be cautious about later price adjustments made in stamp duty and other taxes. A 3-5 per cent commision taken by agents earlier is also reduced currently, market sources say. Additionally, builders have also leveraged digital platforms to directly connect with potential buyers and provide a real-time house-hunting experience without stepping out during the pandemic. Financial planners, however, say that before deciding to go for your final house purchase, one should consider the budget required in the long term if there is a mortgage involved. It is always advisable to reduce your reliance on a home loan for your purchase and put down as large a down payment as affordable, they add. “Although a 20 per cent down-payment is ideal, many first-time home-buyers may find that a difficult task. In such cases, one should try to pay at least 5-10 per cent of the total purchase at the earliest and the rest can be availed in the form of a loan,” said Sudheer Singh, a real estate consultant. Home buyers should also keep an eye on other factors, such as the credibility of the builder, required certifications from RERA, verification of documents required, and personal preferences before finalising a home purchase. Source: The Indian Express Chandigarh

Indian real estate attracted $5 billion institutional investments in 2020: Report

1/22/2021 12:01:00 PM

Institutional investors continued to show interest in Indian real estate with a total $5 billion investments, equivalent to 93 per cent of transactions witnessed in the previous year, despite a sudden halt brought on by the pandemic, showed data from JLL India. The annual performance received major support from the fourth quarter’s $3.5 billion investments, while office assets accounted for a major share of investments during the year. The uncertainty over income and yield stability of commercial properties due to the pandemic had led to pull back in investments. However, large global funds have rather used this as an opportunity to negotiate portfolio deals with developers who offered quality rent yielding assets in cities with a high-quality tenant profile. A deeper analysis of institutional investments in 2020 indicates that the recovery has been narrow-based, as 27 deals were transacted in 2020 over 54 in 2019. The two large portfolio deals with an estimated value of $3.2 billion accounted for 65 per cent of the total investments in 2020. These investments by large global funds in times of uncertainty validate the investment potential of Indian real estate. The two major deals- the Blackstone Group picking up 21 million sq ft completed and under construction office, retail and hospitality assets from Prestige Estate for $1.2 billion and the Brookfield Group’s $2 billion deal with RMZ Group to acquire 12.5 million sq ft office and co-working assets indicate that office assets account for a major share of the portfolio deals. “India’s office sector has witnessed continuous growth over the last four years with the average annual net absorption crossing 30 million sq ft, leading to steady rentals and capital appreciation till the onset of the pandemic. Global investors, looking for stable yields and regular returns, believe that the technology sector driven office space demand is expected to grow further and keep absorption robust,” said Samantak Das, Chief Economist and Head of Research & REIS (India), JLL. The 2020 comeback holds significance when seen against the pace and percentage of the recovery from the last global financial crisis. Not only did the post-GFC recovery phase take more than three years, but the drop in 2009 was more than that witnessed in 2020 Over the years, investments have moved in tandem with reforms and maturity in the real estate sector. Moreover, various structural reforms during the last decade have brought much-needed transparency and accountability to the sector. Source: Economic Times India

RERA has placed interests of homebuyers at the heart of the real estate sector

1/21/2021 1:10:00 PM

Consumer protection is an article of faith for the Narendra Modi government. Consumers are the fulcrum of any industry, the protection of whose interests is central to its growth and development. Within one-and-half-years of assuming office, the Modi government enacted the Real Estate (Regulation and Development) Act (RERA), which had been in the works for more than a decade. RERA has infused governance in a hitherto unregulated sector. Along with demonetisation and GST, it has, to a large extent, cleansed the real estate sector of black money. It has transformational provisions, conscientiously addressing issues which have been a constant bane for the sector. The Act stipulates that no project can be sold without project plans being approved by the competent authority and the project being registered with the regulatory authority, putting to an end the practice of selling on the basis of deceitful advertisements. Promoters are required to maintain “project based separate bank accounts” to prevent fund diversion. The mandatory disclosure of unit sizes based on “carpet area” strikes at the root of unfair trade practices. The provision for payment of “equal rate of interest” by the promoter or the buyer in case of default reinforces equity. These and many other provisions have empowered consumers, rectifying the power asymmetry prevalent in the sector. The negotiating history of this legislation demands that at some appropriate time, all the attempts made to derail this legislation be catalogued. After years of deliberations, the bill was introduced in the Rajya Sabha during the UPA’s tenure in 2013. It is essential to highlight the stark differences between the 2013 bill and the 2016 Act. This would help understand the commitment of the Modi government in protecting the interests of home buyers. The 2013 bill covered neither “ongoing projects” nor “commercial real estate”. The thresholds for registration of projects were so high that most projects would have escaped coverage under the law. These exclusions made the 2013 bill meaningless and detrimental to the interests of home buyers. After the formation of the Modi government in 2014, a holistic review was carried out along with multiple stakeholder consultations and thereafter both “ongoing projects” and “commercial projects” were included in the bill. The thresholds for registration of projects was also reduced. Without the steadfastness and resoluteness of the PM, RERA would never have seen the light of day. While the 2013 bill was pending in the Parliament, the Congress government in Maharashtra, which had quietly enacted its own law in the Assembly in 2012, took Presidential assent under Article 254 of the Constitution in February 2014, just two months before the 2014 general elections. In Maharashtra, RERA, therefore, would not have applied. The irony of the actions of the Congress at the Centre and in Maharashtra was not lost on anyone and constitutes a stinging indictment of the then UPA government at the Centre. The suspicion was further heightened when one sees that the state law was not consumer-friendly. For political gains, the UPA dangled an incomplete and incoherent law, while approving under Article 254 of the Constitution, its own party’s state bill, which would have caused permanent damage to the home buyers of Maharashtra. The Modi government corrected this anomaly by repealing the state Act vide section 92 of RERA. This was done by invoking the proviso under the same Article 254, which provides for powers of repeal. Our commitment towards RERA did not end with its enactment. We faced a barrage of writ petitions, challenging its constitutional validity. In December 2017, the Bombay High Court upheld the law in its entirety, putting to rest any doubts about the validity, need and importance of RERA. RERA is a seminal effort in cooperative federalism. Though the Act has been piloted by the Central government, the rules are to be notified by state governments, and the regulatory authorities and the appellate tribunals are also to be appointed by them. The regulatory authorities are required to manage the day-to-day operations, resolve disputes, and run an active and informative website for project information. At the other end, in a glaring example of constitutional impropriety and poor governance, West Bengal trampled upon the supremacy of the Parliament by ignoring RERA and enacting its own state law — the West Bengal Housing Industry Regulation Act (WBHIRA) — in 2017. Despite multiple efforts by the Centre, West Bengal refused to implement RERA, causing irreparable loss to home buyers. Knowing full well that there was already a central law on the subject, the state government enacted WBHIRA in 2017, and did not even care to approach the President of India seeking assent for the state bill under Article 254. This defiance of constitutional principles has been challenged in the Supreme Court. I am confident that soon, WBHIRA will be rendered unconstitutional and we would have “One Nation One RERA”. Since RERA came into full force, 34 states and Union territories have notified the rules, 30 states and Union territories have set up real estate regulatory authorities and 26 have set up appellate tribunals. The operationalisation of a web-portal for project information, which is at the heart of ensuring full project transparency, has been operationalised by 26 regulatory authorities. Around 60,000 projects and 45,723 real estate agents have been registered with regulatory authorities. Twenty-two independent judicial officers have been appointed to redress consumer disputes, and 59,649 complaints have been disposed-off. RERA is to the real estate sector what SEBI is to the securities market. As I have always said, the history of urban India and of the real estate sector will always be remembered in two phases — “Pre RERA” and “Post RERA”. Source: Indian Express India

78% buyers willing to buy property in 2021: PropTiger consumer sentiment survey

1/20/2021 11:12:00 AM

The number of people willing to invest in property was much higher in the September-December period of 2020, as compared to April -May 2020, shows’s consumer sentiment survey. A key reason behind this increase, was an improvement of home buyers’ economic outlook, the survey indicates. The survey by PropTiger was conducted in the September-December 2020 period, through stratified random sampling, across eight cities, including Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, NCR, MMR and Pune. The insights represent the view of more than 3,000 potential home buyers interviewed during the cycle. Real estate is the most-preferred asset class A majority of the people who took part in the December survey, voted for real estate as their preferred asset class. While 43% respondents opted for real estate, fixed deposits and stocks were the second and third-most popular investment choices among the respondents, claiming 21% and 20% votes in the survey, respectively. Gold ranked last, with 16% people voting in its favour. In the May 2020 survey, only 35% respondents voted for realty as the preferred investment class, while gold remained the second-most preferred asset claiming 28% votes. With 15% votes, stocks were the least preferred choice among consumers in May. Flexible payment plans and low home loans rates drive demand When asked about which factors would boost the demand for properties in 2021, the largest number of people voted for flexible payment options and discounts, followed by low home loan interest rates and the developer’s credibility. While 59% respondents said flexible payment plans and discounts would be the key demand drivers in 2021, 24% voted in favour of low home loan interest rates. Only 17% participants voted in favour of developer credibility. In the May survey, 24% respondents had voted for developer credibility as the key demand driver, while 58% voted in favour of flexible payment plans and discounts. Only 18% of the participants had voted in favour of low mortgage rates in May. Economic outlook improves but income outlook remains cautious 76% respondents expected the economic scenario to improve in the December 2020 survey. Their outlook towards income, however, continued to remain conscious with one-thirds of the respondents saying that they were still not confident about their incomes. In May, only 59% home buyers opined that the economic scenario would either improve or remain stable. 78% buyers willing to buy property in 2021 The increased affordability of housing units, continues to push demand for residential realty. Most banks have brought their interest rates to below the 7% level, after reductions in the repo rate by the RBI and several states have announced stamp duty cuts, in the aftermath of the Coronavirus pandemic. While 78% respondents wanted to buy a property in the next one year, another 22% respondents said they had put their property purchase plan on the backburner. Work-from-home fuels demand for bigger homes As companies continue to extend the deadline on reopening of workplaces, most people have been working from home for over a year now. This phenomenon is pushing more and more people to invest in bigger homes that would offer them the space for a home office. As a result of this, 47% of the respondents in the survey mentioned plans to buy larger homes, to meet their work-related requirements in December. In May, the percentage of those who planned to buy bigger homes, stood at 33%. In the December survey, 53% participants said they had made changes in their existing properties, to make room for their changing needs, as work from home (WFH) becomes a mainstay. In May, this number stood at 67%. Ready-to-move-in units remain a preferred choice among buyers Project delays have been a key cause for concern among home buyers. In view of the pandemic, which may result in longer delays in project delivery timelines, a majority of people are now opting for ready homes, its comparatively higher ticket size notwithstanding. In the December survey, 63% respondents said they would invest in the read-to-move-in (RTMI) segment, while another 27% said they would be willing to buy under-construction properties that would be ready for possession within one to two years. India