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Ready properties to see more demand in the short term: Colliers International

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Although the implementation of various regulatory reforms, such as the Real Estate (Regulation & Development) Act (RERA), Goods and Services Tax (GST) and the Benami Transactions (Prohibition) Amendment Act, 2016, are likely to bring R

Although the implementation of various regulatory reforms, such as the Real Estate (Regulation & Development) Act (RERA), Goods and Services Tax (GST) and the Benami Transactions (Prohibition) Amendment Act, 2016, are likely to bring positive changes in the residential sector in the long term, buyers will remain cautious and wait for further clarity from the union budget 2017-18, according to Colliers International’s India Residential Property Market Overview.

Colliers forecasts that the demand of end-users will remain skewed towards ready-to-move-in properties, at least in the short term. In the aftermath of demonetisation, many banks have reduced the home loan rates to the tune of 8.25% to 9%, which is the lowest in the last 8 years. The government has also announced an interest subsidy to the tune of 3%-4%, for first-time affordable housing buyers in 2017. As per Colliers, the 2017 union budget holds the key to many more incentives for home buyers, in the form of tax cuts and interest subsidies.

In 2016, about 89,000 units were launched across six major cities in India, which is about 34% less than the units launched in 2015. Out of the total new launches, 28% was in Bengaluru, followed by Mumbai (25%), Pune (23%), National Capital Region (NCR) at 15% and Chennai (9%.) The decrease in the number of new launches indicates the waning interest of buyers in the primary market.

“We expect demand for quality stock in areas with good connectivity and social infrastructure to revive in the near term, especially in mid-segment housing. However, realistic pricing will be the key to an early revival as right now, both, buyers and sellers are hanging on in the hope of optimum prices. We think prospective buyers should not delay their decision unduly, since they can negotiate realistic prices in both the primary and secondary markets,” says Surabhi Arora, senior associate director, research, at Colliers International India.

Top residential markets Bengaluru: Bengaluru continued its run in the residential market, with maximum number of new unit launches in 2016.

However, while in 2016, nearly 24,800 new residential units were launched in Bengaluru, it reflects a 35% year on year (y-o-y) decrease over 2015. This slow pace of new launch activity, can be attributed to multiple events that unfolded during 2016 – like the impending finalisation of RERA Act; delays in obtaining approvals due to Bruhat Bengaluru Mahanagar Palike (BBMP)’s citywide drive to tackle encroachment of storm water drains that kept developers cautious and the momentary civil unrest over Cauvery water issue between Karnataka and Tamil Nadu, which hampered new launches in H2 2016.
However, compared to cities like Mumbai and NCR, Bengaluru was the least impacted by the recent demonetisation, as the city’s residential market is primarily driven by end-user demand, comprising the white-collared population employed in the IT/ITeS sector.

Chennai: Chennai’s residential market remained subdued in terms of new launches and sales, as weak buyer sentiments prevailed.

The city’s primary residential market witnessed the launch of nearly 7,750 residential units, a 35% y-o-y decline over 2015. Of the total launches, 94% were concentrated in suburban and peripheral quadrants, while only 6% were noted in the central and non-central locations.

As Chennai’s residential segment was normalising post 2015’s floods, multiple factors such as uncertainty at the state level, political leadership and demonetisation, weakened developers’ confidence to undertake new projects. Also, the Madras High Court’s judgement, imposing a blanket ban on registration of unapproved plots on agricultural lands further cautioned buyers from investing in new launches.

NCR: It remained a muted year for the NCR market. Gurgaon witnessed the launch of around 6,700 units in 2016, about one-third of the 2015 numbers. Colliers expects muted demand and limited number of new launches in H1 2017, as the ongoing slump in the market gets further fortified after the demonetisation move.

Contrary to the general perception of a significant price correction, Colliers does not believe that prices will crash. We anticipate that prices will largely remain stable, while a marginal correction of 5%-7% in emerging micro-markets, such as Dwarka Expressway and Golf Course Extension Road, cannot be ruled out due to high inventory available in the secondary market. The story was similar in Noida, as in the backdrop of muted sales in the primary market and heightened consumer activism on the issue of delays in completion of projects, developers remained focused on execution of projects in 2016. About 6,500 new units were launched in Noida in 2016, which is almost equal to the 2015 figure.

Builders opted for alternative sources of funds and raised money from non-banking finance companies (NBFCs) and a number of private equity players also entered into strategic alliances with developers. In 2016, a few national-level developers, such as Tata and Godrej, signed joint development agreements with local developers to enter into the Noida market.

Mumbai: 2016 began with a promising outlook for Mumbai but as the year progressed, the real estate market in the city was affected by several factors, like the approval of the RERA by the central government, the new Maharashtra Housing Policy and the demonetisation drive. Developers and buyers adopted a wait-and-watch approach and the number of launches reduced considerably.

In 2016, there were about 29,000 new launches in the Mumbai Metropolitan Region (MMR) and its suburbs, a decline of 18.8% over 2015. About 51% of the new launches were in Thane. The remaining share was concentrated in the central suburbs (23%), Navi Mumbai (15%), central Mumbai (9%) and south Mumbai (2%).

New unit launches are expected to be concentrated in Thane and Navi Mumbai in 2017, due to the availability of land at these locations.

Pune: Despite being one of the most active residential markets in 2016, Pune witnessed a slowdown towards the end of 2016, with new launches totalling to about 20,400 – a 36% decrease over 2015. Low enquiry levels, especially in the high-end and luxury segments, echoed prevailing subdued market sentiments, as most launches in 2016 were focused on the budget or mid-end segment housing. Localities adjacent to the commercial hubs of Pune in the west (Baner, Hinjewadi), south (Undri, Handewadi), south-east (Keshavnagar, Hadapsar) and east (Kharadi), constituted an 80% share of the new launches. Ready-to-move-in properties or projects close to completion, are likely to witness increased demand in 2017.

Source:  moneycontrol.

Residential

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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Residential

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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