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Delhi Real Estate News

Reforms Transform Real Estate And Housing Sector



Affordable Housing

As Prime Minister Narendra Modi’s government marks three years in office, one area in which it can be proud of its reformist and progressive policy approach is the real estate and housing sector. 

Unregulated, unorganized and disoriented for years, it has emerged as a professional, mature and regulated sector thanks to a number of reforms and policy initiatives. 

These include the Real Estate Regulation Act ( RERA), liberalised FDI rules, Real Estate Investment Trusts (REITs), besides key missions like Housing for All, Smart Cities, AMRUT (Atal Mission for Rejuvenation and Urban Transformation), and, of course, the Goods and Services Tax (GST), a landmark reform. 

Together these have positioned the Indian real estate sector as an attractive global investment destination. 

Of these slew of reforms, the two game-changers are RERA and GST. 

RERA, which came into force on May 1, regulates the unorganized real estate sector with fair, transparent transactions that not just protect the interests of consumers but also boost the confidence of investors. 

The GST, set to be operational from July 1, aims to dismantle federal tax barriers in order to create a single, unified market with tax transparency and predictability, promoting ease of doing business and improving supply chain efficiency. 

All this, together with an accruing reduction in compliance costs and tax management expenses, and provision of Input Tax Credit (ITC), may well soften the overall impact of taxes on real estate. 

In the backdrop of massive urban shortage of about 20 million homes, the Modi government has come up with a Housing for All by 2022 Mission, with a clear focus on affordable, low-cost and EWS (economically weaker section) housing. 

The mission has gained momentum with a number of enabling policy initiatives and tax reforms, including 100 percent service tax exemption to affordable housing developers, infrastructure status to affordable housing to facilitate fund flows, hiked exemption limit on interest outgo on home loans, and credit-linked subsidy under the Pradhan Mantri Awas Yojana (PMAY). 

The government is giving no less importance to rural housing as the budgetary allocation under PMAY has been raised from Rs 15,000 crore to Rs 23,000 crore ($2.3 billion to $3.5 billion), with a target to complete 10 million homes by 2017-18. 

The Centre has undertaken significant mortgage reforms by way of a new broad-based Credit Linked Subsidy Scheme (CLSS) under PMAY to ensure that its benefits reach beyond the EWS and LIG (lower income group) segments, to the teeming middle classes. It has also introduced a Marginal Cost of Funds based Lending Rate (MCLR) for speedier transmission of Reserve Bank of India rate cuts to home buyers. 

The cumulative effect of these reforms, together with steps like the Benami Property Act, demonetization and restrictions on cash transactions to stamp out black money and check artificial price inflation, has been that owning a house today has become much more affordable for the masses as prices have fallen and interest rates are down. 

Thanks to these reforms, commercial real estate has already seen a turnaround and residential real estate is on the path to recovery. 

In the recent past, residential projects have shown a pick-up in demand and sales, registering an investment of over Rs 26,000 crore ($4 billion). According to a report by CLSA India, a $1.3 trillion housing boom is set to be the country’s next growth driver, adding 60 million new houses during the six years beyond 2018, and creating two million jobs annually. 


The government’s commitment to urban renewal is also reflected in policy initiatives like the Rs 1 lakh crore ($15.3 billion) Smart Cities Mission, the Rs 77,000 crore ($11.8 billion) AMRUT Mission that aims to provide basic services (water supply, sewerage, urban transport) to households, and creation of the Rs 4,000 crore ($610 million) National Investment and Infrastructure Fund. 


Over the last three years of the Modi government’s term, the funding for infrastructure development has almost doubled from the Rs 9,850 crore ($1.5 billion) per annum during the previous regime. The FDI-related reforms have also shown the desired results, with inflows touching a record $43.5 billion in FY 17. 

In real estate, there has been FDI of $5.7 billion and $32 billion of PE funding flowing into India, according to the 2016 World Investment Report prepared by the UN. 

The positive impact of the government’s policies and reforms is clearly visible in the over 50 percent increase in the BSE Realty Index this year, as well as the improving economy that is set to grow at about 7.5 percent — well on its path to becoming the fourth-largest ($3.5 trillion) economy in the world by 2022. 
Despite all these positive signs, there are challenges on the ground in term of successfully implementing RERA, GST, REITS, Housing for All, et al. Also, there is a big challenge in the form of new reforms like fixing the flawed Land Acquisition Act and introducing a Single Window system to promote ease of doing business — an area where India still lags behind at 130th place in the World Bank’s 2017 rankings. 

The twin challenge before the government over the next two years will be to execute its reforms and complete the unfinished agenda so as to ensure that its initiatives bring about transformational changes on the ground. 

Source: Economic Times

Also Read: “If Developers Fail To Get Registered Before End Of July, Show Cause Notices Will Be Issued”



Top Investment Destinations In Asia-Pacific Include Mumbai, Bengaluru and Delhi



investment in asia-pacific

Since the Indian investment policy for the real estate sector has got a thumbs up from the foreign investors the country has regained favour as a preferred investment destination in the Asia Pacific region.

According to the Emerging Trends in Real Estate Asia Pacific 2018 report Mumbai, Bengaluru, and New Delhi ranked 12, 15 and 20 by survey respondents as top investment cities. The report was jointly published by PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI).

Globally Sydney, Melbourne, Singapore, Shanghai and Ho Chi Minh City were the top investment cities.

The report also said that due to the implementation of GST and last year’s demonetisation liquidity issued have been created for real estate and it has also impacted investment and development prospects of the cities, thereby pulling down their rankings.

Mumbai has been ranked 12th after being on the second spot last year, while it ranked 8th in terms of development prospects. Bengaluru and New Delhi stand at 15th and 20th position respectively in the investment destination ranking against 1 and 13 respectively in the last year. They ranked 16th and 18th positions respectively on the development destination ranking.


According to the report Mumbai has benefitted from the recent strength of India’s capital markets. Absorption has therefore been strong, driven by demand in co-working, manufacturing, and services companies. Retail is another sector that is drawing increasing foreign investment interest.

Although steadily declining, Mumbai’s office vacancy rate (at around 17 per­cent) continues to be very high, and with a pipeline of incoming supply totalling about 40 percent of existing stock, fun­damentals would appear to be negative. In reality, however, Mumbai continues to lag behind in term of Grade-A stock, meaning that any new supply is quickly taken up and that rental growth for those properties remains strong, says the report.


The city is emerging as the business process outsourcing (BPO) in India. The early foreign investors in this sector bought income-producing assets in business parks along with local partners and benefitted greatly. Some of these assets have now been earmarked for sale, in particular via India’s newly emerging REIT sector, which is expected to launch its first IPO in the first quarter of 2018.

8 to 9 percent annu­ally, together with healthy new tenant demand rental growth has been reported by operators of BPO facilities. However, with the emergence of automation and artificial intelligence technologies the BPO industry is tapering off.

New Delhi

As compared to other Indian cities, New Delhi remains unpopular with investors. According to the report this is mainly due to a downtrend in development of residential sector.

Even though this has created a chance to supply bridg­ing finance, there are not many foreigners who have shown interest in it. The report suggests that north Indian develop­ers tend to be overleveraged and often hold portfolios of high-end housing which is in oversupply. Thus many projects have faced delays and some devel­opers have acquired a poor reputation.

Nonetheless there is a big potential the moment the markets turn. Report points, Delhi will be one of the first cities to start seeing a pickup.

According to JLL Delhi missed its opportunity to grab a share of the surging growth seen in business parks located in the south. Even though there was recent demand from IT com­panies, uptake overall has been slow, leaving office vacancies at an elevated 30 percent. Thus it lacks when it comes to absorption however rentals have still been holding firm unlike the lower vacancies and higher rentals in Mumbai.

Other Highlights:

India is the only country to provide long-term sustainable 3 to 5 percent rental growth profile over a long period. Investors identified India among others as a destination where data centres are projected to provide 13 to 15 percent IRR.

Investors are interested about affordable housing as an asset class even though supply of affordable homes increased in last 3 quarters. The report says the important reason being availability of land at affordable price and not so far away from the cities, no single window approvals, and time overruns etc.

India continues to attract strong flows of institutional and sovereign wealth type capital suggests the report. It adds, investment in India offer massive scale opportunity and continues to be strategic in nature. Also, most international investors in India prefer commercial property, with cap rates currently averaging in the range of 8.5 percent to 8.75 percent.

Mostly due to tax reforms, India logistics sector has recently been the target of an investment boom. The average appreciation in rentals has been anything between 8 to 10 percent per annum, higher as compared to office space, growing 5 to 7 percent.

The residential properties, due to demonetisation campaign, GST and increased regulation of real estate development practices, continue to suffer. High-end residential oversupply is another ongoing problem. India remains the real bright spot for new REIT markets.

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Delhi Real Estate News

Almost 52 Percent Of Residential Units Registered Under MahaRERA Remain Unsold: Report



Almost 52 Percent Of Residential Units Registered Under MahaRERA Remain Unsold: Report

According to a report, 350,000 units remain unsold out of the total number of units that were registered under MahaRERA leading to an inventory overhang of 52 percent as of August end.

The joint report from Cushman & Wakefield and Propstack said with over 50 percent of the current residential inventory remaining unsold and slow momentum of the new launches, the prices have been largely stable.

An estimated 670,339 units across 5,620 projects have been registered under MahaRERA including residential and residential cum commercial under-construction projects. These projects cover 506 million sq ft of development.

Looking at MMR in areas beyond Thane, maximum numbers of projects were launched and registrations done under MahaRERA at 1,835 projects constituting 33 percent of total projects registered.

Gautam Saraf, MD, Mumbai, Cushman & Wakefield said, “Availability of land at the lower prices is a crucial parameter that allows developers to keep the per unit prices under check. Maximum end-users are value sensitive and would like to get maximum benefits out of their purchases. Locations beyond Thane allow developers to create homes that deliver value beyond just habitat. These areas are well connected through public transport including suburban rail and roads, and give developers the confidence to launch large-scale projects in these areas”.

The stretch from Bandra to Borivali on the Western Suburb saw 1,400 projects making up 25 percent of the total registrations. The rest of the table was completed by Eastern Suburbs (18%), Navi Mumbai (12%) Thane (7%), and South Mumbai (5%).

1 and 2BHK configuration units estimated at 319,000 had the highest share of sales constituting together of 87percent. 3BHK configurations sales made up 11percent, while even higher configurations were a mere 1percent of the total inventory sold.

Due to the high real estate prices in MMR region, the end-users’ affinity has been towards smaller configurations. The report added, even while the capital values of affordable houses across most micro markets have not seen any drastic changes when compared to other cities like Bengaluru, Delhi NCR and Pune, these are higher by at least 10–15percent for comparable projects and locations.

Sandeep Reddy, Director, PropStack, India stated, “As more and more projects register for MahaRERA, the market, including end-users, will have better access to information on developers and projects. For end-users, having all information upfront will help them to assess the final product upon receipt….The data will help us create better, sharper analysis of demand as well as design future supply to help avoid demand-supply mismatches”.

While registering under MahaRERA, most builders have revised their delivery timelines. As per the report while 42percent of the projects are expected to be delivered on time, over 43percent of the projects showing delays of up to 3 years and the rest beyond 3 years.

Approximately 57 percent of the under-construction projects are delayed. 1454 projects will see completion in the year 2018, the largest volume of completion.

Also Read: RERA To Ensure Completion Of Realty Projects


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Ahmedabad Real Estate News

CREDAI New India Summit



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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