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.
Home Buyers Lose The Agents And Opt For Digital Route
With passing time digital media is becoming the preferable choice of the buyers as well as the developers. Developers are going to online platforms and social media to reach out to their target audience and also the buyers are increasingly going online for searching homes. This makes digital media a mainstream platform to advertise in real estate industry.
C Shekar Reddy, Immediate Past President of CREDAI explained why digital platforms are becoming more popular in the real estate. He said, “IT employees, NRIs form the majority of home buyers today who are tech savvy and use their smart phones for searching homes. Also most of the home buyers today are being influenced by social media while purchasing a home or property. As a result builders and realtors are putting utmost focus on digital platforms to reach out to potential consumers”.
The growing trend can be observed by the way the builders are spending on online platforms. It is far more than traditional marketing and publicity avenues unlike past. Builders have also become conscious of their presence and reputation on property portals and other online platforms. They are taking each step carefully so they can make the right connect with their buyers.
K Sreedhar Reddy of Telangana Real Estate Developers Association explained the growing importance of digital media, said, “Digital platforms and social media provide builders a chance to reach to the consumers in a more focused way. Also they can track the efficiency of strategy online. The cost of acquiring customers through online and social media is also lesser when compared to other advertising channels. Therefore digital platforms are becoming popular in realty sector”.
As per the inside sources, this trend is not only visible in the metros like Mumbai, Chennai or Hyderabad but also in Tier II & III cities. Customers as well as developers, both are relying more and more on digital platforms.
CREDAI New India Summit
CREDAI is the apex body that represents over 12,000 private Real Estate developers spread across 23 state-level chapters and 177 cities in India. Established in 1999, CREDAI has worked hard to make the industry more organized and progressive by networking closely with Government representatives, policymakers, investors, finance companies, consumers and real estate professionals.
The New India Summit is another such effort from CREDAI to direct focus on Tier II, III and IV cities and develop them to be the forerunners of success. CREDAI New India Summit is all set to unleash the potential of an emerging India. This one small step has the power to give way to a new India.
For the longest time, our leaders and foresighted influencers have put all their time and energy in developing the Tier I cities namely Bengaluru, Mumbai, Delhi, Pune, Ahmedabad, Hyderabad, Chennai and Kolkata. No doubt, these cities have really changed the way people look at India today. These cities are the epitome of advanced technology and modern culture. But they also face challenges due to the grave pressure of urbanization. Decreasing quality of life, increasing the cost of living, overpopulation and unemployment, increase in transit time and traffic congestion, expensive housing, hospitality, education and healthcare facilities are some of the issues that all the Tier I cities face today.
According to a report, smaller cities are developing 79% faster as compared to metros with just 21%. Our of the 12,000 CREDAI members, 76.77% of them are from Tier II, III and IV cities. Looking at the scenario, it is only innate to divert the energies in developing the areas which still have potential. Thus, offering a good quality life to people in those cities itself and taking the pressure off of the Tier I cities.
The Forbes Magazine has said small cities are India’s emerging business locations. The government has also been putting dedicated efforts into schemes that directly benefit the growth of Tier II, III and IV cities. Sustainable economic development, improving infrastructure and transportation, increasing employment opportunities, and introducing technologies for rapid urbanization are some of the prime agendas that the government has been taking actions on.
The CREDAI New India Summit will take place on the 9th and 10th November 2017 in Nagpur, Maharashtra.
Tata Value Homes Launches “Offer Of The Century” With 99 Hours Flash Sale on Affordable Homes
Mumbai, Maharashtra, India
Tata Value Homes – a 100 % subsidiary of Tata Housing – one of the leading real estate development companies in India, today announced the launch of ‘99 hours flash sale’ on Tata Value Homes across India. Through this offer, Tata Value Homes will enable customers to own their dream home with 99 percent funding by select banks. The scheme is applicable on the first 99 units across the projects and for a limited time frame of 99 hours starting from 2nd November to 6th November 2017.
Mr Rajeeb Dash, Head – Corporate Marketing, Tata Housing, said, “Tata Value Homes pioneered affordable housing in India and continues to introduce innovative offers to encourage fence-sitting buyers to take a first step towards owning a home. Customers have always been central to our business and this unique 99 hours flash sale is tailored to connect aspirers with their perfect residence from our diverse portfolio of projects.”
To avail the scheme, customers will have to log on to www.tatavaluehomes.com between 23rd October to 1st November and register using basic details. Post registration, customers can visit the site between 2nd November to 6th November 2017 to check for loan availability within 30 minutes and walk away with the allotment of the unit with a loan of 99% of the agreement value.
As the leading provider of homes under affordable housing segment, Tata Value Homes develops affordable housing that goes beyond merely providing a house, to one with a ‘neighbourhood and community’. The first 99 customers will have the convenience to buy a home from the Tata Value Homes projects such as New Haven, Bahadurgarh; New Haven Compact, Ahmedabad; Shubh Griha Ahmedabad; New Haven Boisar I & II; La Montana, Talegaon; New Haven Bengaluru, Santorini, Chennai; New Haven Ribbon Walk Chennai.
About Tata Value Homes Limited
Tata Value Homes Limited is 100% subsidiary of Tata Housing Development Company Limited, established in 2010, to exclusively focus on value and affordable housing. The vision of Tata Value Homes Limited is to be the largest home provider in India. Tata Value Homes Limited has introduced two pan-India brands – Shubh Griha (Value Homes) and New Haven (Affordable Homes). Tata Value Homes Limited is also developing a Mediterranean themed project “La Montana” near Talegaon, Pune, while Shubh Griha is currently being developed in Boisar & Vasind near Mumbai and Ahmedabad, and New Haven is currently being developed at Bosiar, Ahmedabad and Bengaluru. Tata Value Homes Limited today has projects in Mumbai, NCR, Ahmedabad, Bengaluru, Chennai and Pune.
About Tata Housing
Tata Housing is a closely held public limited company and a subsidiary of Tata Sons. It is the first corporate to pioneer the concept of real estate development in India. It is widely recognized for quality construction, ethical and transparent business practices and timely delivery of properties. It has a pan-India and international presence with demonstrated capabilities in Construction, Engineering, Commercial / IT parks, Housing and Township development. It is known for international standards of design and green sustainable developments.
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