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Speculators lock up nearly 13 lakh flats in housing-starved Mumbai region

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Speculators lock up nearly 13 lakh flats in housing-starved Mumbai region

This is the single largest issue facing the MMR (spread over 4,300 sq km) which has some of the highest real estate prices in the world.

MUMBAI: Despite a severe lack of affordable housing in the Mumbai Metropolitan Region (MMR), almost 13 lakh of the total 87.67 lakh homes remain vacant or locked, according to the draft MMR Regional Plan, quoting data from the 2011 Census.

This is the single largest issue facing the MMR (spread over 4,300 sq km) which has some of the highest real estate prices in the world. The MMR has a population of over 22 million, covering Greater Mumbai, parts of Thane and Rai gad districts and including areas like Thane, Kalyan-Dombivli, Vasai-Virar, Mira-Bhayander and Navi Mumbai.

Although substantial housing stock is added each year, most of it is being bought as “speculative investment’ ‘There is thus an active speculative market that is investing in real estate and creating substantial housing stock,” said the draft plan. Housing stock increased at a hi gher growth rate in Badlapur and Panvel council areas followed by Navi Mumbai, Thane and Mira Bhayander Corporation areas.

“People are forced to locate further and further away from the core city of Greater Mumbai (where the majority of formal jobs continue to be located) in search of affordable housing,” it said.

The Census 2011 house listing data reveals that the total number of houses available in major municipal areas in MMR exceeds the number of households by as much as 54%. Technically, this implies that there should be no housing shortage. Despite this there is a dearth of housing in the region due to the fact that 14% of the houses are vacant and 21% are put to uses other than residential uses,” said the report, adding that “considerable disincentives” for renting prevents this stock from actually becoming available as housing.

Nearly a third of the MMR’s households (27%) live in slums. Of this, Greater Mumbai has the highest share of slum households in MMR (79% with over 11 lakh households). Thane (5.2% with 73,256 households) and Bhiwandi (4.7% with 65,208 households) have sizeable slum households. The largest share of slum population is in Ambernath (63%) followed by Bhiwandi-Nizampur (50%) and Greater Mumbai (41.33%) and the smallest is in Vasai-Virar municipal corporation (3%).

Almost 50% of the households live in slums, dilapidated houses and unauthorized houses in the urban areas of MMR, indicating that a major share of the population does not have access to formal, affordable housing of an acceptable standard. The per capita living space in Greater Mumbai is the lo west at 40 sq ft to 60 sq ft. “Housing prices are inversely proportionate to the distance from the island city,” said the report. Private developers do not build low income group housing and for the economically weaker sections. On the other hand, government agencies like the state housing authority (Mhada), MMRDA and Slum Rehabilitation Authority (SRA) are expected to build barely 50,300 homes between 2011 and 2021. But of these, only around 8,630 units will be fresh stock since the remaining 41,670 units are replacement units by SRA and MMRDA.

“The public sector is playing an increasingly diminished role in the direct provision of affordable housing and houses provided by the private sector cater largely to the high income groups and are beyond the reach of the majority of the population. Renting is not encouraged,” said the report.

“People are therefore forced to locate themselves to distant suburbs in search of affordable housing at locations connected by suburban rail to Greater Mumbai, often commuting for a couple of hours in each direction,” it added.

The draft plan envisages that a housing stock of 44.42 lakh homes will have to be created to house an additional 77 lakh people expected in MMR by 2036. Of these, over 15 lakh can be built through redevelopment of dilapidated buildings and slums. Another 7 lakh houses can be generated for sale in the open market through these redevelopment schemes.

Thane, Vasai-Virar, Navi Mumbai, Mira-Bhayander, Ulhasnagar, Kulgaon-Badlapur, Panvel and Alibaug don’ t have sufficient land for creation of housing stock required for their projected populations,” it said. “In the remaining cities, adequate vacant developable land is available to accommodate the estimated housing need, which is to the tune of approximately 1,000 hectares (2,500 acres). Requirement of land for new housing development in the rest of MMR can be met by the urbanisable zones proposed in the Plan in their vicinity,” said the draft plan.

 

Source: economictimes.

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Ahmedabad Real Estate News

Under Construction Flat Booking Finds Tax Deduction Under Time Constraints

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Tax Deduction

If a buyer makes a transaction to book an under-construction flat and if he acquires it within the three-year period of the sale of his old house, then he is entitled to a tax deduction, says a ruling from the Mumbai bench of the Income-tax Appellate Tribunal (ITAT). If an apartment is booked in an under construction project than it must be viewed as a method of constructing residential tenements, says the December 18 judgment.

That means if the buyer uses the entire gain from the transaction to buy another house within two years or construct another house within three years. The two- and three-year period applies even if the buyer bought another house a year before selling the first one. But the property should have been bought in the name of the seller.

It is mandatory that within a period of two years after or one year before the date of transfer of old house, the taxpayer should construct a residential house or acquire another residential house within a period of three years from the date of transfer of the old house. The date of receipt of compensation will determine the period of acquisition or construction in a case of compulsory acquisition.

This exemption is effective and can only be claimed in respect of one residential house property purchased/constructed in India. In the case of multiple house purchases or constructions, the exemption under section 54 will be available in respect of one house only. Any purchases made outside the country does not fall under any kind of exemption. Section 54 gives relaxation in such cases by providing relief to the taxpayer who sells his residential house and acquires another residential house from the gained capital.

After the sale of an asset, the difference between the buying price and the selling price is a capital gain or a capital loss. These are further classified as long-term or short-term. If a property is held for 24 months or less, with effective from 2017-18, then that asset is treated as Short Term Capital Asset. Then an investor can make

treated as Long Term Capital Asset. Then only a Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL) can be made on that investment.

ITAT agreed that booking of a new flat in an under-construction apartment should be considered as a case of “construction” and not “purchase”, hence following the earlier decisions of the Bombay high court and the tribunal itself. Further ITAT allowed the fact that the construction can began prior to the date of sale of the old asset. Same was stated in the earlier judicial decisions of the Karnataka high court and Ahmedabad ITAT, that the date of commencement is not relevant but it is the completion of construction that comes in relevance to section 54.

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India Real Estate News

HDFC and Quikr Make A Deal

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HDFC and Quikr Make A Deal

According to a deal between HDFC and Quikr, a stake of more than 3 percent will be given to the mortgage giant in return to its transfer of offline and online real estate brokerage business to the classified ads platform.

After acquiring Commonfloor in 2016 Quikr already has a major presence in online real estate broking.

“Most of the searches for real estate are moving online. Quikr has a much bigger presence online. Through this deal, we are partnering Quikr in the broking business,” said HDFC MD Renu Sud Karnad. According to her, this deal will strengthen Quirks position with offline support.

The deal suggests that HDFC will transfer to Quikr its entire shareholding in HDFC Realty, a real estate brokerage platform, and HDFC Developers, which runs the HDFC RED online platform.

Karnad added that the deal expects Quikr to generate home loan leads for HDFC. The transaction consists of a co-branded alliance between both parties and the HDFC brand will continue to be used online for a year.

The e-real estate classifieds platform HDFC RED has around 7,000 project listings and generates traffic of over 80,000 unique visitors per month. HDFC Realty has a 300-member, in-house sales team, and 7,000-strong nationwide broker network. Avendus Capital was the exclusive financial adviser to Quikr while Kotak Investment Banking acted as the exclusive financial adviser to HDFC on this.

30 million monthly users make Quikr India’s largest classifieds platform. It runs multiple vertical businesses across real estate, automobiles, jobs, services, and goods. The Quikr Home, its real estate vertical generates 3.5 million monthly unique visitors.

Both companies intend to work closely and conduct analytics and identify potential homebuyers, and therefore home loan customers, early in their home-buying journey. Quikr founder and CEO Pranay Chulet said, “We see great synergies between Quikr and HDFC as we start working together to bring a seamless online-to-offline platform to developers and consumers.”

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India Real Estate News

Retaining The Sustainability: GRIHA Launches Star Rating For Urban Homes

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GRIHA Launches Star Rating For Urban Homes

Green Rating for Integrated Habitat Assessment (GRIHA), is the National Rating System of India, a Sanskrit word meaning – ‘Abode’. Human architecture has always consumed resources in the form of energy, water and material from the environment. From their construction to operation, these habitats absorb the resources throughout their life cycles, emitting wastes in the end. This emission could be direct in the form of municipal wastes or indirect emission into the atmosphere, such as from electricity generation. Hence GRIHA was formed to reduce an architecture’s resource consumption, waste production and overall environment impact up to certain national acceptable limits.

In attempt to quantify all these aspects, like energy consumption, waste generation etc. GRIHA tries to manage, control and bring down the respective to the best possible limit. Being a rating tool, it helps people to assess the performance of their respective projects against the national benchmarks.

Hence it becomes an evaluation of the environmental performance of an architecture on a holistic level. Covering its entire life cycle, this evaluation provides a specific standard for a ‘green building’. This rating system aims to strike a balance between established institutions and emerging concepts, on a national as well as the international level.

The process starts with an online submission of documents according to the criteria. Then a team of professionals and experts from GRIHA Secretariat takes a site visit for the evaluation of the building.  There are four different sections categorized by 34 criteria in GRIHA rating system. Some of them are site selection and site planning, conservation and efficient utilization of resources, building operation and maintenance, and innovation. 

Sanjay Seth, CEO, Green Rating for Integrated Habitat Assessment (GRIHA) Council says, “A rating between one and five stars is being provided, helping the costumers to know about the sustainability of the houses”.

According to the Union Minister, Hardeep Singh Puri, the climate resilient and sustainable buildings are the need of the hour. As the government is aiming to construct around 1.2 crore houses for the urban poor under the affordable housing scheme.

In one of his keynote addresses, Andreas Baum, Ambassador of Switzerland to India and Bhutan said that the Indo Swiss collaboration is operating with the Indian Bureau of Energy Efficiency in the development of guidelines for energy efficient housing.

“At present India is witnessing a rapid urbanisation, if each building becomes greener than the last one, then we have a huge opportunity and hope for our country. We need to look beyond the conventional methods of building, in order to provide our citizens with a good quality of life. Hence, GRIHA gains important in meeting our national goals with respect to a sustainable society”, says Dr Ajay Mathur, director general, TERI & president, GRIHA Council.

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