Connect with us

India Real Estate News

Demonetisation hits real estate market in Mumbai and Thane



Demonetisation hits real estate market in Mumbai and Thane

Industry observers said the sector has reached stagnation point with many players claiming to be unable to crack even a single deal in the last seven weeks.

MUMBAI/THANE: Real estate market in Mumbai and Thane has taken a severe hit since demonetization was announced on November 8.

Industry observers said the sector has reached stagnation point with many players claiming to be unable to crack even a single deal in the last seven weeks.

Property expert and owner of Praron Consultancy, Pranay Vakil, said transactions have come to a “standstill” in the last 50 days. “People did not have cash to give in deals where cash is component is prevalent. Others postponed buying hoping that interest rates would go down,” he said.

Vakil said another reason was the expectation that property prices will reduce. “There were several media reports that rates will go down. Potential buyers thought it would be prudent to delay buying property,” he added.

Market sources said the high value residential market has been the worst affected with poor to nil sales since last month. Pankaj Kapoor of Liases Foras, a real estate research firm, said the industry is now in a “reset mode”.

“I expect a price correction once interest rates are lowered,” he said. “People are waiting and watching right now. Builders who were building luxury properties are shifting their focus to affordable housing in the distant suburbs,” he said.

Property consultant Ashok Narang of L. Lachhmandas & Co said inquiries in the residential segment have slowed down, but genuine buyers are bargaining hard with developers in the luxury segment. “It is now a buyers’ market,” he said. However, residential leasing has not been affected. “Developers with big brand names will sustain in this market, but at the same time they should provide incentives to buyers to improve sales,” said Narang.

In Thane, the local real estate association claimed many of their members haven’t finalized any sales deal since November 8.

“Many of my clients have preferred to wait and watch for the impact of demonetization before taking any decision. There are many brokers in our association who have not done any business. Rental market that is usually buzzing has seen some activities but largely clients are now bargaining for reducing the rental amount,” says association president Rajesh Gadgil.

Ramesh Nair, COO – Business & International Director, Jones Lang Lasalle, India, said the secondary market and even those in the primary segment where cash component plays a significant role has seen a dive.

“We were looking for purchasing a flat in Thane but have now deferred our decision as we feel the rates could crash anytime in the near future. Any drop in prices could benefit us as we could end up saving lakhs,” said Swati Sharma, a home seeker from the suburbs who has been aspiring to relocate to Thane soon.

Developers said except for few urgent deals, nothing much has transpired and the situation is unlikely to ease till the next fiscal.

The secondary market transactions that comprise roughly 25% of all the real estate deals inked in Thane is also badly impacted as the possibility of cash component here is high, said a local realtor. Areas like Naupada, Panchpakhadi, Khopat, Kopri that are in high demand along with few in Vasant Vihar and even the GB road has seen inquiries plummeting.

Officials at the eleven registrar offices across Thane claim the footfalls seem less but the impact can be ascertained only by end of the fiscal when a comparison can be drawn. “People come for registrations as most of them might have already finalised their deals before November or during Diwali,” said a state revenue officer.

Experts say that while majority transactions might have frozen, distress sales or purchases is happening with either party reaching a consensus and ready to forsake the cash element or defer payments based on mutual understanding. “Those who want to urgently dispose their properties either to migrate or to meet any other personal financial requirements might be ready to sell at lesser than the market rates. We are getting few requests for such properties of late. A large segment will however wait and watch,” says a realty agent from the city.

Source: economictimes.

Ahmedabad Real Estate News

Under Construction Flat Booking Finds Tax Deduction Under Time Constraints



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.

Continue Reading

India Real Estate News

HDFC and Quikr Make A Deal



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.”

Continue Reading

India Real Estate News

Retaining The Sustainability: GRIHA Launches Star Rating For Urban Homes



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.

Continue Reading