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Indian real estate sector will emerge stronger in 2017: Anita Arjundas, Mahindra Lifespaces

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Indian real estate sector will emerge stronger in 2017: Anita Arjundas, Mahindra Lifesapces

The year 2016 has been an eventful one for India’s real estate sector. The first half of the year witnessed early signs of a revival in momentum, as reflected in improved sales and a drop in unsold inventory levels across the top residential markets in India (as compared to
H1, calendar year 2015). As the world’s fastest-growing large economy, India’s progress in the year has been supported by FDI reforms, healthy consumer demand and improved agricultural output driven by a good monsoon. The broad consensus was that India’s real estate sector appeared to be reaching an inflection point, with time correction in prices, the implementation of the Real Estate Act 2016, low interest rates and an overall supportive policy/regulatory environment all serving to contribute to a revival in consumer sentiments.

 Anita Arjundas2016 has also been the year of strategic policy initiatives, the broader objective being the creation of a conducive economic system that would boost long-term industrial growth and improve ease of business. Specific to the sector, the Real Estate Act 2016, with its thrust on transparency, accountability and the protection of home buyer interests, seeks to empower all stakeholders engaged in the business and consumption of real estate. The Benami Transactions (Prohibition) Amendment Act, 2016, establishes a regulatory mechanism to further strengthen the fight against tax evasion and improve transparency. Yet other announcements, such as the exemption of Dividend Distribution Tax (DDT) for SPVs to REITs and relaxation of FDI norms, were aimed at improving financing to the sector.

As last year, affordable housing continued to attract significant attention, driven by continued and accelerating urbanisation, rising home ownership aspirations and an urban housing shortage estimated at 18.8 million units as per the ‘White Paper – Indian Housing Industry’ by research and consultancy firm RNCOS. 100 per cent deduction in profits for construction of affordable housing (upto 30 sq. mtr. in the four Indian metros and 60 sq. mtr. in other cities) and interest subsidy for first-time homebuyers, are some of the initiatives that were introduced to improve supply and spur construction activity in the segment.

In the month of November, 2016, the Indian economy witnessed a major shake-up, set in motion by the withdrawal of legal tender character of high-value currency notes. There has been much debate on the pros and cons of demonetisation and its comprehensive impact. The immediate impact continues to be felt across many industries and sectors, as manifest in a drop in consumption spends and growth rates in the near term. From a real estate perspective, the short-midterm impact of demonetisation is expected to vary across regions, as the sector is fairly localised in nature. With intending home buyers likely to adopt a ‘wait and watch’ approach, it appears as though we might witness a temporary slowdown in the sector till the economy adjusts to a new normal.

While the primary market in tier I cities is expected to remain largely unaffected, the tier-II and tier-III markets might be impacted to a higher degree, along with the luxury segment. However, demand for affordable housing is unlikely to be significantly impacted by demonetisation, since the cash component in the segment is typically minimal and transactions are primarily routed through bank borrowings. Though it’s difficult to predict the impact of demonetization at this stage on real estate sector including affordable housing segment.

2017: A year of Change

Growing cities – The fact remains that India’s cities are growing and will continue to do so, driven by urbanisation, rising disposable income and mounting consumption of goods and services. Demonetisation notwithstanding, therefore, the demand for quality housing that is strategically located and attractively priced will sustain. From the perspective of resultant pricing shifts, cities and micro-markets that are end user driven are likely to remain stable. For intending home buyers, the new year has already started on a positive note, with some banks lowering their lending rates and more borrowers now eligible for loans and reduction in home loan EMIs, in addition to reduced tenures for existing borrowers, wherever applicable. This softening of interest rates bodes well for the growth of the real estate sector.

The evolving home buyer – While it’s difficult to predict the sector’s journey through the new year in exacting detail at this point, home buyer preference for institutionalized developers with demonstrated track record and good governance framework will likely strengthen in 2017. This is especially relevant given the evolving customer profile, larger share of home loan customers and practices that are followed with respect to no undervaluation of properties or payments in cash (by such real estate developers). We believe real estate markets across India are maturing and will increasingly be end user driven, going forward. In fact, over the past two quarters or so, end users have been actively pursuing options, with closure rates improving for right-priced projects in good locations.

GST – An important and game-changing reform that merits special mention is GST or Goods and Services Tax, expected to be rolled out in 2017. When implemented, GST will subsume a series of central taxes and state-level levies, and could benefit the nation in the long term, by way of a wider tax base and greater participation in the formal economy.

Sustainable urban development – Green buildings, or developments that are resource-conscious, are increasingly finding flavour with consumers in India; this is on account of increasing awareness of both the long term benefits to the environment and demonstrated savings in operational (utilities) costs of such buildings. And yet, India’s cities have a far smaller proportion of green developments, when compared to other developed countries – the US or the UK, for instance. Incentives and tax benefits can contribute to stakeholder buy-in and improve the pace and scale of ‘green’ development. We believe that green and inclusive urbanisation that encompassed the entire lifecycle of buildings (from construction, to operations and end of use) can provide a new direction to India’s real estate/infrastructure sector.

On an overall basis, over time, the recent moves at regulating the economy are expected to increase transparency and the ability to attract institutional capital across industries and sectors, despite some initial short-term turmoil. Consequently, we believe that the Indian real estate sector will emerge stronger, healthier and capable of long periods of sustained growth, provided adequate policy/regulatory support.

Source: economictimes.

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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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