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The Effects of Demonetisation on Real Estate and its After Shocks

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Mumbai, Maharashtra, India

Mayfair Housing has been in the business of real estate development since 1964. We complete 52 years of dedicated developmental work this year and have endeavoured to provide the best homes to our customers, employing the most modern concepts of construction, architecture and management. As a real estate company, we have pursued transparency, commitment and fair pricing as a policy and these three pillars have helped us create a lasting relationship with our loyal clientele. I extend my support to the government in their efforts to eradicate black money. The recent move of demonetization by the government will ensure a secure and favorable financial future for every citizen or our country. However, I believe that the prices of real estate projects which are RERA compliant will remain stable. In fact, prices of ready to move in homes might even rise by 10%.

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Many factors are responsible for this situation and I’ll list them one by one which will help you take a better decision. Demonetisation has led to an increase in bank deposits by 14 lakh crores. This will help the government to invest hugely in Infrastructure development and will lead to fast development and sustainable economic prosperity in Mumbai and MMR areas. The Seven Metro Corridors, Coastal Road, East-West Connectivity, North-South Connectivity, Mumbai Trans Harbour Link, etc. will further boost demand in the Real Estate sector in Mumbai. Political stability at the center and in the state will also lead to a favourable Investment Climate in Mumbai and Maharashtra.

A good monsoon has also helped revive the economy. FDI has increased exponentially which has provided the government with additional resources, and will be used to improve infrastructure further. Demonetisation will help to stabilize inflation and will encourage the RBI to reduce REPO rates. Due to these factors, Home Loans rates are expected to come down to 7% in the coming future. The SBI has already announced FD rates at 4.25% to 4.75%. This will lead to a substantial rise in demand for real estate. The Housing Rent to EMI ratio will also drop substantially, spurring further demand for real estate as people will consider buying a home instead of living on rent. Tax breaks are expected to be announced for flat buyers as the government wants housing for all. The proposed DCR DP 2034 and the TDR policy will lead to rise in cost of development by at least 10% of all future projects. Hence, they will be more expensive than the current ones.

Due to the implementation of GST, Ready to move in flats will get expensive by at least 9% to 22%. Hence all projects that are ready on or before the 31st of March, 2017 have a significant advantage as no GST would apply on these projects. Increased buying capacity and high liquidity in the realty sector will make ready to move in projects the first choice for buyers. Ready to move in projects are almost 0.5% of the total real estate projects that are being offered today. Consumer sentiment is likely to change very soon and I anticipate it to happen around 14th January, 2017.

Today, real estate prices are at par or below cost. All overhead costs of developers are being met through loans. Now, there is no scope of any further fall in real estate prices. Consumer sentiment is expected to change soon as it would become clear that they will need to pay a higher price due to the impact of GST and other various reasons. Hence, once the stock of ready to move in flats get exhausted, they will have no choice but to buy flats which are under construction or wait for the under construction project to get completed. Hence, the demand for ready to move in flats is likely to rise. Therefore the right time to buy a house is NOW.

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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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