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Goa Begins A Survey Of Beneficiaries For Affordable Housing



Goa’s department of municipal administration has commissioned the Regional Center for Urban and Environmental Studies (RCUES) to undertake a demand survey and identify families living in municipal areas who are in need for affordable housing.

The survey will help the Goa government and the urban local bodies (ULBs) to identify the right strategy for affordable housing projects in the state. It will be completed by end of November.

J Ashok Kumar, director of urban development and municipal administration said, “The process to identify beneficiaries and undertake an assessment for group housing in the state began towards the end of July.”

A list of potential beneficiaries will be identified by the demand survey. Each municipal area’s data will be collated with the corporation of the city of Panaji limits. This will then sent as a proposal for approval to the union ministry of Housing and Urban Poverty Alleviation.

Kumar added, “The surveyors will be meeting the chief officers and chairpersons of each municipality and they will be seeking applications from eligible residents in those areas.”

In Goa, a total of Rs 71.36 lakh has been sanctioned by the Union ministry of Housing and Urban Poverty Alleviation for the formation of the state level technical cell (SLTC) and Housing For All Plan of Action (HFAPoA). The action plan includes 14 municipal areas where affordable housing and on-site rehabilitation of existing slum dwellers will be the focus.

Kumar also said, “The state is in the process of constituting the technical cell. We have already taken approval of the state government and now we will invite applications, and by end of November, the technical committee should be in place.”

To setup SLTC in Goa, the total amount permitted by the union government under PMAY is Rs 21.6 lakh. The union ministry, out of this, has promised to contribute Rs 16.20 lakh for forming the cell in Goa. The rest will be contributed by the Goa state government. According to a government official, the centre has already released the first installment of Rs 8.10 lakh in early June. After Goa submits the expenditure receipts and details of the experts hired for the SLTC, the union ministry would release the second tranche of funds.

According to the union ministry’s guidelines, there will be 10 professionals for the SLTC. This includes urban infrastructure specialists, environmental specialists, urban planners, and public-private partnership specialists. All of them together will plan and implement the PMAY mission in Goa.

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Affordable Housing Is The Changing Face Of Indian Real Estate




With a motive to address and discuss segments related to the “Housing for all” scheme, the national summit by ASSOCHAM was held recently at New Delhi. The main topics for the discussion were: Government policies & GST issues, future of incomplete projects, fast-tracking of housing projects, PPP model in the affordable housing along with other opportunities for affordable housing. The summit was marked by the presence of eminent people from the realty sector who actively contributed their suggestions and opinions at the question and answer session held at the event which was also attended by Hardeep Singh Puri, Minister of State for Housing and Urban Affairs Govt. of India.

According to Pradeep Aggarwal, Chairman, National Council on Affordable Housing, ASSOCHAM who is also the Co-founder & Chairman of Signature Global, “In the last union budget presentation, affordable housing got accorded with infrastructure status, thus signalling a strong government support for the same. The reinforcement was never late as after GST’s implementation, hopes were high that either this segment would be kept out of the ambit or the lowest bracket would be provided. With prices going up post the tax reform, the government will have to find out ways of minimising the effect of this rise on the average Indian home-buyers.”

Pradeep Aggarwal who was presiding the entire discussion concluded saying that the banks will have to be pushed to further lower down on their lending rates, ensuring that the end payout remains the same in cases of property purchases. Keeping the affordable housing segment out of GST’s ambit might have been a good move but measures for the removal of stamp duty charges must be taken into consideration to further lower the burden of the mid-segment buyers. Furthermore, with the anti-profiteering clause in GST, developers will have to abide by the rule to pass on the benefit of input tax credit to the respective customers. Thus developers and customers now stand at a win-win situation that will gradually help expand the demand circle for affordable housing.

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Is Affordable Housing Capable Of Becoming The Largest Segment In Residential Real Estate?




With government aiming for Housing for All, over the past couple of years, all major cities in India have seen more and more affordable housing projects coming up. As per a white paper by KPMG, titled ‘Indian real estate: Unfolding the new era of growth’, the affordable housing segment is likely to grow by over 30 percent, over the medium-term.

The once considered a low-profit segment by most in the industry now has a promising future due to low-interest rates, various sops from the government and demand from consumers.

“There has been a noteworthy rise in the number of affordable housing launches, in comparison to the last couple of years and there is a revenue margin in these projects,” explains Pradeep Aggarwal, chairman, Signature Global Group and Affordable Housing Council of ASSOCHAM.

Aggarwal, whose company has announced over 9,000 affordable units in Gurugram and plans another 20,000 units in future, said “Developers have realized that the demand for affordable housing is high. So, they have started paying much-needed attention to this segment.”

RK Arora, chairman, Supertech Limited adds that the government’s mission of ‘Housing for All 2022’ has really motivated developers to eye for the affordable housing segment like never before. He added, “Demand for home loans in the affordable segment, has also seen an uptick. There has been a boost in the number of queries, which will, in turn, direct to sales, in times to come.”

Another remarkable development, according to Neeraj Bansal, partner and head, ASEAN Corridor and Building, Construction and Real Estate, KPMG in India has been the infrastructure status to affordable housing. He says, “This has lead developers to enter into this segment. This has also provided access to cheaper funding by way of debt, which would reduce the overall cost of homes.”

He also gives credit to the government’s subsidy scheme. Moreover, he points out that some developers are also pinching their unit’s ticket size, to make it affordable and to avail of tax benefits.

Credit rating agency, ICRA, in its report, said that it expects the growth rates in the affordable housing segment to be in the region of 30 percent, adding that it would be one of the key drivers for the Indian mortgage finance market.

SK Sayal, MD, and CEO, Bharti Realty Ltd explains that while there are many government schemes which are promoting affordable projects, the availability of land in the city areas, remains the biggest challenge. Even though the government is freeing up land that land will only be available in the peripheral areas. He concludes, “This defeats the purpose of affordable housing, as the people living in these projects will have to spend time and money to travel to their workplaces. Thus the growth of this sector depends on the availability of affordable land at the right locations.

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Leasehold Vs Freehold Property – Do You Know The Difference?




You must have often come across the terms “Freehold” and “Leasehold” properties, while buying a property. For those of you who don’t know the difference or someone who has questions regarding legal obligations attached to them – we are going to break it down for you. They might seem like technical legal terms but what is more important is the fact, whether you want to buy a home or rather have a landlord?

The main difference between Freehold and Leasehold property is the ownership and control of land. As a freehold property owner you can do whatever you want with your property, obliging to state rules and regulations. On the other hand, leasehold property ownership is given by the government for tenure of 99 years which could be extended up to 999 years, if the owner i.e. State in majority cases, agrees to extend the lease but there is a cost for lease extension.

Freehold Property

Freehold property means that you are the outright owner of the building and the land on which it’s built, till the time you don’t sell the ownership to someone else. If your name is registered in the land registry as ‘Freeholder’ then you owe the title ‘absolute’. Freehold property is preferred by most as you become the rightful owner of the property.

Benefits of Freehold Property

  • There is no annual ground rent that you have to pay.
  • You are not dependable on anyone for maintenance of your property or making any changes to it.
  • You have freedom to decide the fabric of the building such as roofs and outside walls.
  • You don’t have to worry about your lease running out.
  • You don’t have deal with any landlord.

Leasehold Property

Leasehold property means that you have to lease the property from freeholder, commonly referred to as landlords, for certain number of years as per lease agreement. The lease agreement could be from 99 years to 999 years. However there is no fixed limit as such, it could be as low as 5 – 10 years as well.

Benefits of Leasehold Property

Cost is lower than freehold properties as the cost of land to the developer is invariably low.

Leasehold properties are safe investments as they have clear titles and you are also aware of developer’s reputation.

Maintenance of the project is responsibility of the developer or the State government, whoever is the owner.

Major Discrepancies Between Freehold and Leasehold Properties

Despite having their own benefits, there are certain major differences between freeholder and leaseholder.

  • Fees are one of the major concerns as leaseholder often feels that their freeholder is overcharging and they can’t do much about it.
  • Lack of proper building maintenance is another concern that leaseholder often raise against freeholder.
  • Freeholders often complain about breach of terms of lease agreement by leaseholder.

Why Properties Built On Leasehold Land Is Not A Lucrative Option?

Buying a property on leasehold land might have some short term benefits but as customer if you are looking for long-term investment, then it may not be a great choice. Here are some of the reasons:

Developers Customers
Restricted Use of Property If a developer buys a property on leasehold then they won’t be able to make full use of the property, as the landlord will have restrictions in place and will continue to impose them. For example – if a developer wants to demolish an old building and construct a new one, then you need to sign a new leasehold agreement for that, which will be an additional cost to the developer. Since the developer has certain restrictions on the property, he will pass on those restrictions to homebuyers who won’t be able to enjoy full benefits of the property.
Hard To Sell If a developer wants to sell a leasehold property, then there won’t be many buyers for it. On top of it, if the lease is near its end then it’s almost impossible to sell it. Customers will have a hard time to sell leasehold property as they will not have the ownership of the property.
Premium Payments If developer wants to extend the lease on the land, then landlord will ask for more premiums from the leaseholder. The more the period of extension, more the premium the developer needs to pay. The extra premium payments will eventually be borne by the customers as an added cost.
Getting Loans Developers face hard times to get a loan for leasehold property, as banks do a very strict background check on the property and there is no guarantee if the loans will be sanctioned. A land with very short lease period or one where the lease is near its end doesn’t even qualify for a loan. Just like developers customers also face difficulties in getting loans for property built on lease hold land.
Regular Payments The developer has to make regular payments to landlords in the name of annual ground rent. Once again all the extra cost will be borne by customers.
Lack of Stability Since developers don’t own the property, they won’t be able to take advantage of long-term benefits associated with the property. If the value of the land increases then then the landlord will be the one who benefits from it and not the developer. On the contrary, developers will be responsible for bringing the land to its original state while leaving the property. Customers won’t be able to take any long term advantage from their properties as they have no ownership. For short term it might be cheaper for them to invest in leasehold property but in the long run they will hardly have any return on their investment.

As developer or as customer, you should be very careful in deciding whether to lease a property or not and need to gather as much detail as possible before acquiring on lease. Experts are of opinion that if you have the budget then it is better to invest in freehold properties, if you have a better clarity on the future. Freehold property also gives you the leverage to acquire funds in future, if the need arises.Conclusion

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