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Home Sales In Top 8 Cities Up 21% In March Quarter

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Home Purchase-Sales In Top 8 Cities Up 21% In March Quarter

Conventional wisdom and anecdotal data may have suggested buyers holding back on home purchase in the first quarter, but data from top eight cities shows otherwise

MUMBAI: Homebuyers may have felt the pinch of demonetization aftereffects in January-March this year but that did not deter them from buying their dream home.

Conventional wisdom and anecdotal data may have suggested buyers holding back on a home purchase in the first quarter, but data from top eight cities shows otherwise.

Primary residential sales across the country’s top eight cities increased 21% in January-March over the previous quarter, numbers from Liases Foras Real Estate Rating & Research, a well-known housing, and real estate data agency shows.

Kolkata, Hyderabad, and Ahmedabad led the revival with growth rates of 47%, 43% and 30%, respectively. About 61,214 units were sold across these eight cities compared to 50,788 units in October-December quarter.

But year-on-year growth was still 5% lower, dragged down by weak market in Chennai and Bengaluru.

The Delhi-National Capital Region (NCR) contributed the most with sales of 14,983 units followed by Mumbai Metropolitan Region with 14,505 units. Sales in NCR and Mumbai grew by 24.5% and 23.6% respectively during the quarter. Bengaluru and Chennai bucked the trend of the big cities with housing unit sales falling 35% and 44, respectively.

“The impact of demonetization was transitory as it did result in subdued disbursement growth, particularly in the third quarter and part of the fourth quarter of the financial year under review.

But by the end of the financial year, the individual disbursement growth trajectory began normalizing,” said Keki Mistry, CEO, HDFC, the largest non-bank mortgage lender.

Mistry says in November and December property sales slowed immediately after demonetization. New applications, however, for home loans started growing from January which saw 21% growth over December. February had reported 16% growth over January, and March had 44% growth over February.

He added that the market has not just bounced back to normal, but it is the best time to buy property due to lower interest rates, declining property prices in some cities and government incentives.

Over the last one year, home loan interest rates have already eased more than 100 basis points, coming down to a six-year low of 8.35%. On Monday, State Bank of India reduced home loan rates further between 10 and 25 basis points. The revised home loan rate is at the lowest level since 2009, when it had announced a teaser rate structure.

Home prices fell but not as much one had expected after demonetization. Residential property prices in Chennai grew the highest by 5% from a year ago followed by Hyderabad with 4%. However, prices in Pune, Kolkata, and NCR declined by 3%, 2%, and 1%, respectively.

In Mumbai Metropolitan Region, country’s most expensive property market, the weighted average price rose 1% from a year ago to Rs 12,966 per sq ft. In NCR, prices eased 1% to Rs 4,855 per sq ft, while Bengaluru saw prices moving up 3% to Rs 5,584 per sq ft. Government moves to drive affordable housing has also led to higher numbers. “Both sales, as well as the new supply, are now driven by affordable housing segment,” said Pankaj Kapoor, MD, Liases Foras Real Estate Rating & Research.

On a sequential basis, the highest sales growth of 31% was in affordable segment with a price range of less than Rs 25 lakh, while the ultra-luxury segment saw a 4% decline in sales. The contribution of the affordable segment to overall sales in Tier-I cities increased to 16% from 15% in October-December quarter. Within the affordable housing segment, maximum sales growth of 25% was recorded in Mumbai Metropolitan Region, followed by Pune with 19%.

Out of new launches, a maximum of 43% was seen in the cost bracket of Rs 25 lakh and Rs 50 lakh, which indicates that more developers are now catering to affordable housing demand. Collectively, 71% of the new launches were seen in cumulative cost brackets of Rs 25 lakh to Rs 1 crore. In the affordable segment of less than Rs 25 lakh, maximum of 34% new launches were in NCR, followed by 18% in Mumbai Metropolitan Region.

Unsold stock across these markets has declined marginally by 0.3% on sequential basis. This is attributed to healthy sales and lower new launches during the quarter.

Among key markets, Ahmedabad, Hyderabad and NCR markets witnessed a 3% decline in the unsold stock, but Chennai, Kolkata and Pune witnessed a 3% increase in unsold stock. MMR and Bengaluru saw negligible changes in unsold supply.

Weighted average price across tier-I cities witnessed a marginal decline on a sequential basis. In Pune, Hyderabad, Kolkata, and NCR, prices dropped marginally by 1%.

Source: ET Realty

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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Nagpur One Of The Big Potential Cities For Affordable Housing

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credai nagpur

According to a report released by CREDAI Nagpur is among 45 potential cities that are projected to drive the demand for affordable housing. The ‘Dawn of India’s Future Cities’ report was released at the two-day New India Summit organized by CREDAI in the city.

As per the press release issued by CREDAI, Lucknow, Jaipur, Kochi, Bhopal, and Ahmedabad are some of the other main cities included in the list of 45 cities. The New India Summit will focus on the opportunities in Tier II and III cities of India.

As per the release, “Driven by investments in infrastructure, affordable housing, skilled workforces, these cities can potentially see accelerated growth in the manufacturing, tourism and warehousing sectors, and emerge as India’s new megacities”.

The release further added that the study based its findings on key parameters such as socio-economic momentum, enhanced connectivity infrastructure and high-value indicators. With a sharp-focus on real estate, it identified areas of opportunities for developers while reiterating the impact of regulatory changes on the sector.

The study suggested that the country needs new cities to augment its growth. Initiatives such as ‘100 Smart Cities’ and the Urban Rejuvenation Scheme — AMRUT— will provide emerging cities with a blueprint for becoming the next flagbearers of development in India.

“India’s demographic capabilities bring a huge opportunity to match the world’s economic superpowers. This opportunity also brings with it challenges such as developing new urban centres,” said Jaxay Shah, CREDAI’s national president.

Geetamber Anand, CREDAI’s chairman added, “The Nagpur summit will help builders gauge the opportunities in smaller centres. The Tier I cities are already overcrowded There is a clear need for new cities to be developed as the growth engines of the country”.

Union Surface Transport Minister Nitin Gadkari also addressed the meet through video conferencing.

Also Read: Pune Smart City Targets Rs 100 Crore Grant From World Bank

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CREDAI New India Summit

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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.

Also Read: FS Realty Bags The 9th Realty Plus Excellence Awards (North) 2017

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