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Affordable housing will outpace other real estate segments: Getamber Anand, CREDAI National

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Demonetization boosting liquidity, the real estate sector could witness lower lending rates and accelerated growth, Getamber Anand tells ET.

How is the affordable housing segment evolving in India?

Affordable housing has always been a strong market in India. The recent emphasis on this segment through government initiatives like ‘Housing for All’ is accelerating the growth by facilitating large-scale inventory creation. Combined with the shortage of housing units in the country, this has triggered a doubling of new launches in the first The top eight property markets are Mumbai, Pune, Delhi, Bangalore, Kolkata, Chennai, Ahmedabad and Hyderabad. Total launches, across segments, rose 17% from a year ago, to 60,000 apartments. However, the demand for quality affordable housing projects far outstrips the supply. Developers are now noticing this potential demand and focusing on this segment.

Such projects also provide monetary benefits for both developers and consumers, in terms of reduced costs and tax sops. Affordable housing takes less time to be completed than mid or high-end apartments, while the sales momentum is faster, which helps developers realise their costs quickly.

Is affordable housing a viable option for home-buyers in metros?

For now, we are seeing affordable housing grow in metropolitan centers, which is where the largest demand is. Tier II and III cities also have a considerable market, especially in terms of supply. However, in terms of demand, metros far outpace these centers. With the growing emphasis on affordable housing and with notable players getting into the market,the viability for home-buyers in these cities is beginning to surpass expectations.

Given the accelerated rate at which the segment is growing, it will outpace most other real estate segments. With recent policy changes, specifically RERA, we expect the market to see even more growth in supply and demand. If in the next 10 years home loan rates vary between 5-7%, the future of the sector as well as the segIs demonetization likely to impact this segment?

Real estate has mostly been driven by loan-based consumption and is highly regulated. Demonetization will have an impact on the immediate liquidity of the overall market, but as a sector we do not expect any notable changes. We hope that overall demand will go up as the banks lower interest rates in response to the large influx of funds. Banks will have three choices: making RBI deposits at 4.5%; investing in government bonds at 5.5%; and lending at 6.5 to 7%. The influx of funds will result in competitive lending, which will lower the interest rates further. Interestingly, private sector banks and NBFCs were able to mobilise funds at a much lower rate, but were lending at a higher rate, as PSU banks were saddled with bad debts, and unable to do any meaningful lending. Now, with PSUs getting serious liquidity to lend, this scenario will change. There will be competitive lending, hence a reduction in interest cost. It is a deadly combination of low inflation and high liquidity. A liquidity surge of 25% will result in 25% lower finance cost or 3% reduction in interest rates at the very least. This bodes well for the sector. Affordable housing will be the first segment to see the resulting boost and grow much faster than anticipated.

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What steps can further boost this segment?

The primary step is faster implementation of policy infrastructure, which will enable ease of doing business, smoother taxation and faster financing. This will further be boosted by the lowering of lending rates and the realisation of a low interest regime that the government has indicated. This will lead to the growth that the sector needs to shake off the impact of the 2015 slowdown.

There have been many positive policies announced for the real estate sector and we are hopeful about the growth that they will lead to. This positive sentiment is reflected in the increased investment in the sector. Now we must ensure that home-buyers are empowered and entitled, financially as well as through legislation, to be able to purchase homes in what we think is the most opportune time to invest in real estate.

How are developers likely to realign their businesses to comply with RERA?

To be compliant with RERA, every developer will need to set up a separate department to update information online, in order to ensure transparency for clients and customers, since the process is so heavy on paperwork. O Since the contracts for such projects were signed years ago, with completely different understandings, most developers are sceptical about what could happen with these projects. Nevertheless, some preparations are underway to ensure compliance.

When do you expect housing demand to come back strong?

A demand of around 20 million units for housing has been documented by opinion makers and consultants. So, there is no question of the demand coming back, as it has always been there. A perception has been created in the minds of buyers that there is going to be a price correction soon, which is misleading. A correction of about 20-25% has already happened in 2014-15.

It is important to understand that property prices will not go down further, because the input cost is what it is, and there is no way a business can offer an out-of-pocket product, on which they are losing money. As long as this perception is not corrected, buyers will not believe that this is the right time to buy.

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NTR Housing Scheme In Full Swing: Chief Minister N. Chandrababu Naidu

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NTR Housing Scheme In Full Swing: Chief Minister N. Chandrababu Naidu

On Thursday, Andhra Pradesh Chief Minister N. Chandrababu Naidu said with the estimated expense of Rs. 5,556.74 crore, the construction of more than 2,44,164 houses, out of the proposed 3,03,044, has been commenced under the NTR Housing Scheme 2017.

While addressing the second day of the Collectors’ Conference he also said the construction of the remaining houses will begin soon. He mentioned that Prakasam and the Kurnool districts are ahead of the schedule in the urban housing scheme. Also, the works are in full swing in the Nellore and the Guntur districts under the rural housing scheme.

According to Naidu, the government will complete 2.5 lakh houses by January next year and another lot of two lakh houses by June.

By October 2, 2018, the state government intends to finish the construction of all the houses and plans to celebrate with massive house warming ceremony with local public representatives. This will help them set an example for housing schemes in other states.

Also Read: Raunak Group Presents Apna Pehla Ghar Campaign

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A Mumbai Suburbs’ Swift Transformation From Industrial To A Residential Zone: Wadala

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A Mumbai Suburbs’ swift transformation from industrial to a residential zone: Wadala

An industrial zone primarily, Wadala has undergone a drastic transformation in the past decade. Now an upcoming residential area, this Mumbai suburb is one of the seven islands to form the modern Mumbai. It is located on the Harbour line of Mumbai’s railway network.

Due to its proximity to BKC, large scale land development was inevitable, thus fueling the real estate market. Wadala is bordered by Dadar on the West, Matunga on the Northwest and Sewri on the South. Nestled between south Mumbai and the suburbs, Wadala enjoys strong connectivity by road and rail to most parts of Mumbai.

It has a number of flyovers like the Anik Panjrapol Link Road, Elevated road and Santacruz flyover. Thane, CST and Chembur are connected via the Eastern Highway while the Western Highway connects the locality to Bandra and Borivali. Wadala has the biggest bus depot in Mumbai. Furthermore, the multiple infrastructure initiatives like the monorail, Truck Terminal and the expansion of Highway are in various stages of development.

All this has given rise to residential demand and pushed the property value over the last few years. One of the most populated areas in Mumbai, Wadala has a large number of old temples, churches and dargahs, university campuses, schools, reputed hospitals and is also home to a former world’s largest IMAX dome theater. There are many stores, showrooms and malls around Wadala like the R Mall, High Street Phoenix and Palladium Mall.

Ramesh Nair, COO – business and international director, JLL India says, “A decade ago, property prices at Wadala were as low as Rs 2,800 per sq. ft. and it rose to Rs 14,000 a few years ago.”  As the infrastructure plans are on their way, so are the renowned developers like Ajmera, Dosti Group and Lodha Group among others.

Wadala at present offers one of the highest returns on real estate investments in the region. All the above-mentioned developers have their luxury projects in the area.

Ajmera I-Land introduces Aeon, Zeon and Treon towers with 2, 3 and 4 BHK plush homes. Conceptualized by renowned Singapore based Architects Space Matrix, these spaces with top-of-the-line lifestyle amenities exude exemplary class and finesse. The first residential floor begins at 110 feet from the ground level and offers several modern lifestyle amenities like kid’s pool, swimming pool, gymnasium, club house, open space and landscaped gardens, yoga room, kid’s play area and senior citizen corner.

Dosti Ambrosia is a 36-storey tower nestled in the 18 Acre Township of Dosti Acres. The architecture of the project was undertaken by renowned Hafeez Contractor in the 2 and 3 BHK apartments. It offers an exclusive rooftop swimming pool with 40,000 sq. ft. of landscaped gardens. You will find all modern conveniences like Gymnasium, Tennis Court, Indoor Badminton Court, Yoga and Meditation Room, Elderly Corner, Banquet Hall, Indoor Games, Indoor Badminton Court, Guest Rooms, Restaurant, Grand Entrance Lobby, Kids Play Area, 2 Club Houses and an Amphitheatre.

New Cuffe Parade by Lodha Group offers its residents all the comforts of a world-class lifestyle. The 2 and 3 BHK homes are spread in over 23 acres of land with 15 acres of stunning landscape and 75,000 sq. ft. of the club house. It includes 11 swimming pools, an organic farm, cricket pitch and multiple themed gardens. The buildings are designed by the world renowned WOHA in Singapore and the landscape was planned by Sitetectonix in Singapore.

Also Read: Mumbai to get Building Taller than Burj Khalifa, Road Bigger than Marine Drive

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Rajasthan Government May Hike The Affordable Housing Prices

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Rajasthan Government May Hike The Affordable Housing Prices

The prices of homes under the ambitious Mukhyamantri Jan Awas Yojana are expected to be increased by the state government.

According to the sources in the empowered committee meeting to be held on Monday, a proposal to increase the cost of a low-income group (LIG) and economic weaker section (EWS) houses will be proposed. Urban development and housing (UDH) minister Srichand Kriplani will chair the meeting. The LIG and EWS houses, presently are being constructed on government lands by private builders. These homes are sold at a fixed rate of Rs 1,250 per sq feet; out of which 1000 rupees per sq ft is given by Urban Improvement Trust (UIT), development authorities and local bodies to the builders.

According to provision 4(A) and 4(B), the developers are supposed to build EWS and LIG houses on government land. Seventy-five percent of such government land can be used in building EWS and LIG houses, while the remaining 25% can be sold by the developers. However, since the rates provided by the government are less the developers are not showing interest to construct houses under these categories. Sources said, “In Jaipur, not a single developer has shown interest in constructing houses under this model. The JDA has invited expression of interest (EOI) several times.”

The UDH is leaving no stone unturned to attract the builders in order to achieve the target of constructing 10 lakh houses by 2019. The sources mentioned, “As per the new proposal, the department has proposed to provide Rs 1,600 per sq feet rate to the developers. The land rates have increased subsequently over the period of time; this is why increasing rates has become a need of the hour.”

Sources further added, “The developers are constructing G+3 buildings at present. However, it is not cost-effective. It has been proposed to construct G+2 buildings for LIG and EWS category.”

Also Read: The Impact Of Regulations On The Real Estate Market

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