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XRBIA Developers forays into affordable housing in UK

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In London, Xrbia’s maiden project is setting out to deliver these ‘micro’ homes spread over 400 sqft at a cost of around 80,000 pounds and 600 sqft at 120,000 pounds.

MUMBAI: Realtor XRBIA Developers is foraying into UK market with its first affordable housing project in on the outskirts of North East London in alliance with a local builder to launch a 1million sqft project spread over 20 acres, a top company official said.

“UK is an undersupplied market for affordable housing. There is huge migration taking place to across major cities and that’s a great opportunity for providing affordable housing,” said founder Rahul Nahar.

“We will further our business plan here through joint ventures with local developers, who would be responsible for land parcels and approvals for the project, while XRBIA will be handle mass construction and sales activity.”

Founded in 2012, XRBIA Developers focuses on affordable housing and has so far built 15 million sqft of projects and has an additional 15 million sqft under construction in and around Mumbai and Pune.

In the UK project XRBIA will hold 40 per cent stake and has already received local approvals and is expected to be launched in the next one month. Xrbia’s standard product is a seven-storey building with apartments of 40 square meters.

In London, Xrbia’s maiden project is setting out to deliver these ‘micro’ homes spread over 400 sqft at a cost of around 80,000 pounds and 600 sqft at 120,000 pounds. The company plans to invest Rs 100 crore on affordable housing projects in UK over the next one year that will be financed through internal accruals.

“We are evaluating more proposals for tie-ups with local developers with experience in social housing. As a strategy, XRBIA will enter into a joint venture with 60:40 ratio of stake, where it will be a 40 per cent partner and will allow the partner to operate the project as they have the local expertise,” Nahar said.

While the Indian developer is looking to develop such affordable projects in other key UK cities, major focus will remain on peripheral areas of London. “By 2020, XRBIA plans to be an established real estate brand in the UK,” Nahar added.

Source: economictimes.

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London Fire Survivors To Get Accommodations In A Luxurious Complex

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London fire survivors to get accommodations in a luxurious complex

The government in London announced on Wednesday that the survivors of Grenfell Tower fire shall be rehoused in a luxury complex in the heart of Kensington. The blaze took lives of 79 people and left many more homeless after the fire engulfed the 24 storey at North Kensington a week ago.

68 homes of 1, 2 and 3 BHK have already been acquired at the Kensington Row houses. The Guardian reported that the apartments are ‘newly built social housing’ and the price range of a private home starts from 1.5 million pounds.

Surviving families will be able to take up permanent occupation in the apartments by July and August. The Kensington Row is located about 2.4 kms south of Grenfell.

The report mentioned the new homes will come equipped with swimming pool, sauna and spa, private cinema and 24-hour concierge service. The government will provide fully furnished homes with a high-specification. However it is unclear if residents will be able to use the facilities which are usually not offered to residents of affordable housing.

A statement was issued by the Department for Communities and Local Government saying they have provided “additional funding to fit out the flats to ensure they are ready for people to move in to sooner. It was expected that these new properties would be offered as one of the options to permanently rehouse residents from Grenfell Tower”.

“Grenfell residents have been through some of the most harrowing and traumatic experiences imaginable. Our priority is to get everyone who has lost their home permanently rehoused locally as soon as possible, so that they can begin to rebuild their lives” said Sajid Javid, Communities Secretary.

Also Read: Colliers International forecasts strong growth in Asia Pacific property markets, India among the key markets

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U.S. Housing Recovery Intact Despite Drop In New Home Sales

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U.S. Housing Recovery Intact Despite Drop In New Home Sales

The Commerce Department said on Tuesday new home sales declined 11.4 % to a seasonally adjusted annual rate of 569,00 units last month

WASHINGTON: New U.S. single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labor market.

The Commerce Department said on Tuesday new home sales declined 11.4 % to a seasonally adjusted annual rate of 569,00 units last month, with sales in the West region plunging to their lowest level in nearly 1-1/2 years.

March’s new home sales pace was revised up to 642,000 units, which was the highest level since October 2007.

New home sales, which are derived from building permits and account for 9.8 percent of overall home sales, are volatile on a month-to-month basis. Economists believe that unseasonably mild weather pulled forward sales into the first quarter.

“Demand for housing remains strong and the usual list of support factors hasn’t changed, with the key items being job growth and wage gains,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

Economists had forecast sales decreasing 1.5 percent to a pace of 610,000 units last month from the previously reported rate of 621,000 units. Sales increased 0.5 percent on an annual basis last month. Sales for the first three months of 2017 were revised sharply higher.

Shrinking labor market slack, marked by a 4.4 percent unemployment rate, is improving employment opportunities for young Americans, underpinning demand for housing.

The housing market also continues to be supported by historically low mortgage rates, with the 30-year fixed mortgage rate hovering just above 4.0 percent. Luxury homebuilder Toll Brothers Inc on Tuesday reported a 40 percent rise in quarterly profit, boosted by an increase in home sales.

A survey last week showed homebuilder sentiment rising in May, with builders upbeat about sales over the next six months as well as current sales conditions.

But rising costs for building materials and shortages of lots and labor have left builders struggling to meet demand, keeping house prices elevated. A report last week showed homebuilding fell for a second straight month in April, hitting its lowest level in five months.

The dollar was trading firmer against a basket of currencies on Tuesday, while prices of U.S. Treasuries fell.

U.S. stocks were modestly higher. The PHLX housing index was little changed, with shares in the nation’s largest homebuilder, D.R. Horton, falling 0.85 percent and Toll Brothers gaining 0.84 percent.

BUILDERS CONSTRAINED

The number of new homes completed last month was unchanged, while houses under construction increased 0.6 percent.

Builders are running up against shortages of developed lots and having increasing difficulty finding skilled construction workers,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.

Sales fell in all four regions, plunging 26.3 percent in the West to their lowest level since October 2015. As a result of the drop in the West, which is considered an expensive market, the median new home price fell 3.8 percent to $309,200 in April from a year ago.

The inventory of new homes on the market increased 1.5 percent to 268,000 units last month, the highest level since July 2009 but still less than half of what it was at its peak during the housing boom in 2006.

At April’s sales pace it would take 5.7 months to clear the supply of houses on the market, up from 4.9 months in March. (Editing by Paul Simao)

Source: ET Realty

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NRI Investment in Real Estate: Flexible Policies are the Need of the Hour

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NRI Investment in Real Estate: Flexible Policies are the Need of the Hour.

While the Indian diaspora remains the largest category of investors across the globe, and are thus, wooed by developers in countries like the UAE, UK, etc., restrictive policies have curbed NRI inflows into India. Experts reiterate the need for flexibility in policies governing investments and buying real estate in India

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

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

Indians investing abroad

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

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

 

What are some of the restrictions?

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

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

(b) Prior permission of Reserve Bank of India (RBI) has been obtained.

3 The applicable regulations under FEMA restricts foreign nationals from acquiring any immovable property in India and specific permission is required from RBI for the same, except in the following cases:

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

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

(c) When a foreign national (except a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong) becomes a resident in India as per Section 2(v) of FEMA. Such a foreign national is also required to satisfy the conditions regarding period of stay, and the type of visa granted should clearly indicate the intention to stay in India for an uncertain period to determine his residential status.

4 Foreign nationals require specific approval of RBI for transferring any immovable property in India and are allowed to transfer only when the immovable property is either:

(a) Acquired by way of inheritance and with specific approval from RBI; or

(b) Was purchased with specific approval from RBI

5 Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau or Hong Kong (‘Restricted Countries’) are not allowed to acquire or transfer immovable property in India without prior permission of the RBI, except when they lease an immovable property for a period not exceeding five years.

Indian developers have started realising the investment potential of NRIs and are actively showcasing their property portfolios at exhibitions abroad and simultaneously demanding a relaxation in policies. Experts believe that certain flexibility in relation to acquisition and transfer of immovable property by NRIs is required.

Provide renewable leases: It has been recommended that foreign investments through acquisition of immovable property should generally be allowed and should only be subject to land title agreement and renewable ownership leases.

Acquisition of land development/plotted development: A number of developers have come up with villa properties. “Regulations should provide approval for plotted developments and properties such as bungalows, semi-detached and terrace houses,” says a Delhi-based developer and member of the Confederation of Real Estate Developers’ Association of India (CREDAI), requesting anonymity.

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

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

 

Current market conditions for NRIs

NRIs prefer other countries over India to invest in real estate.

Developers ask Indian government to ease restrictions on NRI investment in India.

Industry body submits recommendations to central government.

Permission to allow NRI investment in land developments and commercial properties sought.

Source: Housing.com

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