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Premium housing builders enter affordable segment on Budget push

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Premium housing builders enter affordable segment on Budget push

Last week’s Union Budget proposed infrastructure status for affordable homes along with several other measures for the realty sector to step up efforts to provide housing for all.

MUMBAI | BENGALURU: The union budget has given a fillip to the government’s efforts to boost affordable housing through tax incentives for developers and bigger brands known for premium projects are now entering the segment while existing players scale up their plans.

“The revival of real estate is expected to take place from bottom of the pyramid of low-cost and affordable housing. This has been the most unorganized segment in residential real estate so far. However, things will change for better now with large and organized developers entering the market. Increase of the size to qualify for affordable units has made the entire thing more palatable,” said Shishir Baijal, CMD, Knight Frank India. “Availability of funds at lower cost will also bring down the prices when passed on to the consumers resulting in further demand growth.”

Listed companies like Housing Development and Infrastructure (HDIL) and Sunteck Realty plan to enter value housing. Several other developers are also planning a foray into the segment. Sunteck Realty said it would invest up to Rs 1,000 crore over two years to develop these projects.

Last week’s Union Budget proposed infrastructure status for affordable homes along with several other measures for the realty sector to step up efforts to provide housing for all. Given the robust demand for such houses and government’s support, more developers are likely to foray into this segment.

“With the granting infrastructure status to the affordable housing segment, cost of funds for developers will come down, which will translate into lower prices for buyers. We at Alpha Corp have been following the developments and are exploring various opportunities in the segment,” said Ashish Sarin, Director and CEO, Alpha Corp.

The segment also has its own set of challenges, though.

“Affordable housing is a mass housing subject with lower margins and therefore requires management, engineering and cost efficiency with low overheads. Developers need to adopt a different skill set like a factory model because there may not be too much of price escalation in this category as the market is driven by end users. With our last eight years’ experience in this segment, we have realised that this is more of a volume game than margins,” said Ashok Chhajer, CMD, Arihant Superstructures, CMD, Arihant Superstructures, a listed company.

The group has so far developed 7 million sq ft and has 11 million sq ft additional affordable housing projects under construction across 14 projects.

“The government’s infrastructure status proposal will give a much needed boost to the real estate sector. We are in the process of firming up ours plans to launch our maiden affordable project. We had huge success with our 7000 mid-income apartment project Dream Acres,” said JC Sharma VC & MD of Sobha Group.

“Given the tax incentives and other benefits offered by the government, home buyers in this category can expect up to 10% benefit on pricing,” said Kamal Khetan, CMD, Sunteck Realty.

In last year’s budget, the government announced allowing 100% deduction on profits for housing projects, building homes up to 300 sq ft in the four metro cities and 600 sq ft in other cities. This year’s Budget clarified the basis for this benefit will be carpet area and not built-up space. This will bring more projects, particularly in tier II locations such as Navi Mumbai and Thane near metropolitan regions, under this category.

“To realise the dream of Housing for All by 2020, government needs to develop a comprehensive policy on affordable housing that should first look to create associated infrastructure in targeted areas” to improve connectivity with extended peripheral localities to prompt home buying in these locations, said Sarin of Alpha Corp.

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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