The Ministry of Environment, Forest, and Climate Change has accepted the recommendation of the Maharashtra State government to reduce the buffer zone from the eco-sensitive boundary of the Thane Creek Flamingo Sanctuary in the Mumbai Metropolitan Region (MMR) from 10 km to 3.89 km.
The reduction in the buffer zone, from 10 km erstwhile to 3.89 km, is likely to affect several construction projects that would have been affected by the no-development rule. As per the sources, construction projects in as many as 15 wards in Greater Mumbai would have been affected because of the construction restriction, which required the builders within the 10km zone to take prior construction permission from the National Board of Wildlife. The suburban wards include areas such as Chembur, Kurla, Bhandup, Mulund, Ghatkopar East, Borivali, Dahisar, Andheri East, and Bandra East. These also include island city areas such as Dadar, Parel, and Matunga.
‘’The decision by the authority to modify and rationalise the eco-sensitive zone around Thane Creek sanctuary has been in favour of the developers and their projects in the MMR region. Earlier they required permission from the National Board of Wildlife to carry out any construction within a 10-km radius from the boundaries of an eco-sensitive zone. This reduction of the buffer zone, therefore, has come as a huge relief for the developers. We anticipate that the construction activities will be on full-swing while ensuring a secure environment for flamingos.’’ said Mr. Ashok Mohanani, President, NAREDCO Maharashtra
An official notification with respect to the same is expected to be issued by the Ministry later this year.
With daily surge in Covid-19 cases in Maharashtra, the State Government has imposed new guidelines with regards to the continuation of construction activity. Here are the guidelines:
a) Construction to be allowed only for sites where labourer’s are living on site. Movement to and fro from outside must be avoided, except for the purpose of material movements.
b) Every one engaged in the activity to get vaccinated at the earliest, as per criteria of GOI and till get vaccinated must carry a negative RT-PCR test result certificate, which will be valid for 15 days. This rule will come into effect from 10th April, 2021
c) Defaults will lead to a fine of 10000/- for the developer of the construction site and repeated defaults may lead to closure of the site till existence of notification of COVID 19 epidemic.
d) lf a worker is found positive he or she would be allowed medical leave and cannot be discontinued during this absence for this reason. He or she will be entitled for full wages that he or she might have earned had he or she not contacted corona.
Soon after the announcement, the real estate industry quickly rushed into the action mode and ensured that they took necessary precautionary measures to battle out the pandemic crisis. Taking the experience from the last year, some of them have already implemented these measures for the safety of the labourers much before the State Government imposed the guidelines.
Ashok Mohanani, President -NAREDCO Maharashtra
Mr. Ashok Mohanani, President, NAREDCO Maharashtra
”We are working closely with all the NAREDCO members and following all the necessary Government guidelines. Infact, all our members have been doing this much before from the time Covid-19 crisis disrupted the real estate sector last year. Labourers are the most vital and the integral part of the real estate industry and taking utmost care of them is our paramount responsibility. We are ensuring that regular sanitization of the construction sites are done and proper accommodation is provided to the labourers at the sites. We are also conducting regular health check-ups and vaccination awareness programs for the workers. We have made the RT-PCR test mandatory for all the migrant workers who are coming back from their hometown as per the Government guidelines. We are ensuring that they complete their tests before joining the construction sites.”
Mr. Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI-MCHI
Mr. Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty
Hon. Secretary, CREDAI MCHI
“Unlike the last year lockdown, we are relieved that atleast construction activities can go on where labourers are already present at the site. The Government has mentioned that the labourers need to get vaccinated at the earliest and till their vaccination they need to get their RT PCR test done. This won’t affect the large and medium-sized developers as they are already taking the necessary precautions at the sites. Although this will affect the small developers and also the redevelopment projects as they do not have enough space for labour camps.
There is no stringent lockdown like last time as essential services and other basic requirements are easily available. We at MCHI-CREDAI are getting the health check-ups done for the labourers along with the vaccination awareness program. We will comply with the Government guidelines and get the RT PCR test done for most of the labourers till 10th April. We are in talks with local urban bodies for conducting free tests for the labourers. For project sites in the outskirts of the city, we are planning to tie-up with private organizations to conduct the Covid tests. Most of the labourers are in the age groups from 20-40 and as per the GOI directive, the vaccination below the age of 45 has not been initiated yet. Hence we are writing to the Government to grant permission to conduct the vaccination for these labourers on priority and if feasible to conduct the vaccination drive on the construction site itself.”
Mr. Abhishek Jain, COO – Satellite Developers Private Limited
Mr. Abhishek Jain, Chief Operating Officer, Satellite Developers Pvt Ltd
“Proper health and hygiene for all our workers have always remained a top priority and all necessary initiatives are taken from our end. We have provided shelter to the workers in labour camps and have also provided resources for their daily food along with masks and sanitizers. Also, as per the government guidelines, we are getting their RT PCR test done before the said timeline.”
Anuj Khetan – Director, Vijay Khetan Group
Mr. Anuj Khetan, Director, Vijay Khetan Group
”We at Vijay Khetan Group have always prioritized the health and safety of our workers at all our different construction sites. We have arranged for hygienic boarding and lodging on site for our workers along with distribution of face masks and sanitizers. The Covid 19 pandemic, while draws the world’s attention on the importance of vaccines, we have ensured to give paid leave to all the eligible workers for vaccination. Also, for the workers, we are getting RT PCR tests done as per the government guidelines. We are maintaining thorough sanitization at all our sites for the safety of our workers and stakeholders.”
In March last year, people across the country were trying to wrap their heads around the novel coronavirus-outbreak. When the World Health Organization declared it a pandemic on March 11, most were already aware of its seriousness. At 8 pm on March 24, 2020, Prime Minister Narendra Modi made a landmark announcement – a nationwide lockdown for 21 days to curb the spread of the coronavirus pandemic in the country. The lockdown continued in some form or the other for the next few months, but businesses were never the same. Schools, colleges started shutting down, big events started getting cancelled, people started donning masks, but the real estate industry continued to pull through, not wanting to incur major losses.
For many industries, this was a transformative year and one of them which underwent a turbulent change was the real estate sector which is one of the country’s largest GDP contributors and also the largest employment generators. As we completed the first anniversary of the unprecedented lockdown, let’s find out from the real estate experts on how the year unfolded for them and understand their key learnings from the days gone by for the day ahead.
From achieving greater maturity and better business models, real estate developers streamlined revenues and innovations, and as they continue to deal with challenges, they are already playing the role of a catalyst in reviving the country’s economy. In a sink or swim situation, the entrepreneurial spirit truly came through – with many reputed developers finding their own way to pivot and carve a niche.
Runwal Group mentioned that during the lockdown, they were already functioning from homes and sales activities never stopped. “All our employees were working from home and were putting more effort than the pre-lockdown period to make sure sales and collections kept rolling. In fact, we were amongst the very few developers in the country who did exceptionally well during the lockdown period as well. We have been using online and digital channels extensively to conduct business during the lockdown. From digital advertising to online meetings and virtual project tours, we have been utilizing every possible avenue to connect with customers, channel partners and vendors. We are already looking at integrated online sales tools to manage the sales flow and customer interactions. We shall further ramp up these channels for use in future as well,” informed Mr. Subodh Runwal, Managing Director, Runwal Group.
Subodh Runwal – Managing Director, Runwal Group
Mr. Runwal further added, “We had ensured the migrant labourers were there at the labour camps all along so that helped us in fast movement when we resumed back after the lockdown. We have been taking care of all health and food requirements of these labourers to ensure they stay within the project and do not pose any health hazard to society at large.”
Another leading developer The Wadhwa Group mentioned that they had introduced a virtual sales experience centre for their customers in these unprecedented market conditions to guide & support their buying decisions by giving them an option to virtually transact. Mr. Navin Makhija, Managing Director, The Wadhwa Group said, “During this pandemic, the consumers have very much realized the importance of owning a well planned, well designed and a well ventilated home – a valuable asset one can always fall back onto. We have always been following a buyer-friendly approach in all our sales and marketing processes. For marketing, we were majorly using digital platforms and portals as people were consuming more digital data and were spending ample time online. For sales, we had a virtual platform with guided tours for clients to bring them closer to reality. Clients too were quite comfortable having initial information and project walkthrough online. In fact, 30% of our sales were coming in through our virtual platforms.”
Navin Makhija – Managing Director, The Wadhwa Group
“We are also carrying out site visits with prior appointments so that we are able to regulate social distancing and ensure safety & well-being of our team members and customers. On-call support, WhatsApp Assistance, virtual site tours and online booking features are made available to enhance the customer’s experience,” Mr. Makhija further added.
In the initial few months of lockdown, the sector was believed to be badly affected however, policies and measures introduced by the Government helped revive the sector recording an upward trend in property buying activity especially in Mumbai. Further, the decision of Maharashtra Government to cut down stamp duty registration fees resulted in sales of nearly 10,000 units per month. Besides, 50 per cent discount in premium payments to developers offering complete waiver in stamp duty to homebuyers and installment facility to pay other developmental charges helped the cash ridden developers largely.
Ashok Mohanani, President -NAREDCO Maharashtra
Applauding the policy measures, Mr. Ashok Mohanani, President – NAREDCO Maharashtra said, “Due to the impact of COVID 19, the Government and the apex bodies came up with plenty of fiscal measures in the past one year to deal with the major challenge of liquidity and tide over the lockdown period. The various measures introduced by the RBI, Union Finance Minister along with both the Central and Maharashtra Government injected liquidity into the market and has already spurred the demand and revived confidence in the real estate industry. Also, the unanimous decision by NAREDCO Maharashtra to waive stamp duty completely on the sales of residential properties till December 31, 2020 added to the home buying euphoria and supported the Government’s efforts to push housing demand in the state. On behalf of the real estate fraternity, we at NAREDCO urge the State Government to extend the reduced 3% stamp duty charges for another two quarters so that home buyers continue to be encouraged and invest in their dream homes.”
Kaushal Agarwal – Chairman, The Guardians Real Estate Advisory
Speaking about the real estate revival Mr. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory said, “The last one year has been a memorable time for the India Real Estate sector. One that the sector will largely remember for its turnaround. Immediately after the announcement of the nationwide lockdown it was largely believed that the real estate sector will see an unprecedented correction in prices, some believed it could be as steep as 20% from the existing levels. Thanks to the policies and measures of both the central and the state government, the sector was saved from undergoing a steep reduction in its prices and instead witnessed a revival in business and volumes. The RBI, taking a cue from the measures announced by the central government, drastically reduced the repo rates leading to reduced cost of borrowing for homebuyers and homeowners. On the other hand, several state governments especially the government of Maharashtra introduced a temporary reduction in stamp duty charges leading to substantially reduced cost of transaction for prospective homebuyers. These measures have been very effective and highly successful in reviving the fortunes of the sector at large.”
Changes aside, what we did notice was a 360-degree shift in the way the real estate sector perceived success. Now it is upto the Government and the entire real estate fraternity to keep the momentum going.
“The real estate sector in India is expected to reach US$ 1 trillion by 2030 and it will contribute 13% to the country’s GDP by 2025. The Government should keep a continuous check in the form of reforms that will give a fillip to the real estate sector and will indirectly help revive the economy which has received a dent due to the impact of the pandemic,” Mr. Mohanani further added.
Commenting on the way forward, Mr. Agarwal explained, “In order to ensure that the momentum continues, the affordable housing industry needs to become a point of focus for all stakeholders. It is this industry that has been hit the most as a result of the lockdowns and subsequent restrictions on travel through public transport. A period of no transaction cost for affordable homebuyers will serve as a short-in-the-arm for demand revival and driving customers to the booking counters. The RBI should also continue the accommodative stance so far as the lending rates are concerned, the same will leave more money in the hands of consumers who have or will avail home loans.”
After one year of lockdown, the pandemic has taught the real estate industry to align, adapt and amend businesses as well as reinforce the strategies so as to make the most of the ongoing situation and this is what new normal means to them.
By Mr. Ashok Mohanani, President, NAREDCO Maharashtra
With the World Health Organisation (WHO) declaring it a global health emergency and pandemic on March 11, 2020, due to COVID-19, the sentiments of businesses worldwide were severely impacted and were mostly negative in their outlooks. The outbreak created a great deal of uncertainty regarding trade and imports across the globe.
The real estate sector, too, touched the lowest of lows during the almost three-month-long nationwide lockdown. While construction activities came to a sudden halt, reverse migration of labourers made the resumption of work difficult. Developers faced severe liquidity constraints and homebuyers lost a significant appetite to buy a property. Home sales and new property launches suffered a great deal as the nation struggled to battle the pandemic.
Government and apex bodies came up with plenty of fiscal measures to deal with the major challenge of liquidity funding. The various measures introduced by the RBI and Union finance minister injected liquidity into the market so that the economy can recuperate quickly. The Central Government and the various State governments would do well to stop further proliferation of the virus and handhold the Indian real estate sector in the times of crisis.
Six months into the situation, real estate demand has piqued with genuine homebuyers willing to take advantage of value propositions coupled with payment plans given by a vast set of developers. Development work across construction sites, too, has begun, although at a slower pace.
As there is a major shift towards digitization due to the pandemic; people who favour offline property search now prefer online real estate portals to search their dream homes. Online home sales have begun to gain traction and leading developers with a good track record will be the main beneficiaries of this change. There has also been a huge demand for virtual tours wherein home-buyers are opting the same either to shortlist or to finalise their homes. In a significant trend seen during Covid-19, unlike before many respondents seeking property from investment perspective prefer ready-to-move-in (RTMI) homes. The consumer preference has predominantly shifted towards affordable and mid-segment properties.
There are several initiatives taken up to support the real estate sector by the Maharashtra Government which has already spurred demand and revived confidence in the industry. Also, the unanimous decision by NAREDCO Maharashtra to waive stamp duty completely on the sales of residential properties has added to the home buying euphoria and supported the Government’s efforts to push housing demand in the state. It has not only pushed stagnant housing sales northwards but also made home buying cheaper and supported the State exchequer mop up a whooping stamp duty in revenues in just two months. Such initiatives should be emulated by other state governments as it will be a good booster for realty at Pan India level.
Knight Frank India, leading international property consultancy estimates that home sales volume in Mumbai recorded at 9,301 units in November 2020 registering a whopping 67% year-on-year (YoY) rise over the same month last year boosted by stamp duty cut and festive period of Diwali. This strong growth of 17% month-on-month (MoM) in November 2020 comes after a robust 42% MoM growth during October 2020 and massive 112% MoM growth during September 2020, when sales of residential property started to show an upward trend after months of COVID-19 induced slowdown.
Mumbai has witnessed a cumulative residential sale of 22,827 units after the stamp duty cut during September-November 2020. The monthly run rate in this period after the stamp duty cut is approximately 135% or 1.35 times the monthly average of 2019.
With steady decline in the number of COVID-19 infections across the country and the vaccine around the corner, we expect better days for the economy going forward along with the GDP growth to turn positive in Q4 this financial year The Repo rate cuts, lower home loan interest rates and newly announced affordable rental housing policy open new avenues for the segment.
The industry players anticipate the upcoming Budget for Financial Year (FY) 2020-21 to relax income tax norms, offer single-window clearance and GST reforms. The helpful measures like easing out of the liquidity issues that are being faced by the sector can aid the buyers to make investments, thus lending a positive push to the vision of ‘Housing-For-All’.
Our Real Estate fraternity is hopeful that with the full support from the Government, we will be able to implement much needed measures to boost the real estate sector in 2021 and further. Every calamity is an opportunity to scale new heights. Indian real estate and allied manufacturing industries must find positivity in the current recovering scenario of the economy and should try to benefit by increasing local production and indigenous innovation.
Bringing back the homebuyers into the State’s residential real estate sector, NAREDCO Maharashtra has announced yet another spell of zero- stamp duty on housing sales until 31st December 2020. The decision will allow more homebuyers to buy affordable and luxury residential properties at the lowest ever prices during the pandemic. Over 1,000 NAREDCO Maharashtra members have offered their properties for sale under this scheme.
Buoyed with a demand upsurge that pushed the housing sales in Mumbai and Pune to top the national sales charts with a share of 41 per cent, NAREDCO Maharashtra is eyeing a similar kind of growth in the residential segment by 31st December due to the developer–borne stamp duty waiver. NAREDCO informed that the zero-stamp duty pushed Mumbai’s residential realty sales by 300 per cent from August 2020 to October 2020. The trade body also expects a major policy upheaval like the affordable rental policy of the Government, the proposed Housing Policy of the Maharashtra State and the Finance Minister’s announcement providing tax relief to both the developers and homebuyers with respect to the relaxations granted under the Section 43 (CA) and Section 56 (2)(X) of the Income Tax Act. These policies together will play a major role in shaping up the demand.
With a sharp demand correction over the pre – COVID levels, the apex body of developers is now eyeing to tighten the liquidity for the sector’s growth by calling upon the foreign investors to invest in eligible projects. Supported by a solid ‘thrive – back’ story of the sector during the pandemic, the Government’s pro-industry reforms and euphoric realty buying sentiments in the country, the trade body is set to pitch for funding with the foreign investors in a three–day virtual ‘Real Estate and Infrastructure Investors’ Summit (REIIS) – 2020’ that will begin from 25th November, 2020.
Mr Ashok Mohanani, President, NAREDCO Maharashtra announced the event at the Press Conference today. The event is organized jointly by NAREDCO and Asia Pacific Real Estate Association (APREA), a leading pan Asian trade association with a focus on cross-border real estate investment, and promotion of real estate as a preferred investment asset class across the Asia Pacific and beyond. Anarock will be the knowledge partner for the event. The theme of the Summit is ‘India – Opportunities in the Coming Year’. It will bring the developers, the foreign investors and the policymakers on one platform to boost investments in the Indian Real Estate and Housing sector.
Announcing the decision of a zero – stamp duty until 31st December and the proposed Summit, Mr Ashok Mohanani, President, NAREDCO Maharashtra said, “It’s a win-win for both the homebuyers and the developers, as the zero-stamp duty window will bring more homebuyers of Maharashtra into the buying net. It will not only push the housing sales trajectory; but also send positive signals to the foreign investors to accelerate their investment plans into the sector flushing more liquidity to tighten the supply side. With aggressive measures such as the stamp duty waiver, the launch of HousingForAll portal, ease-of-doing-business climate, the foreign investors will start investing heavily in A-Graded income-generating asset–classes; where Maharashtra’s real estate space will remain at the centre.”
NAREDCO has pegged the substantial amount of foreign investment flows into the Indian real estate sector in the next two years. The trade body is expecting a strong action by the foreign investors in the ensuing period and expects major foreign funds like Blackstone, Brookfield, GIC, Xander, Ascendas, CPPIB, Warburg Pincus and Goldman Sachs expanding their investments into the sector. The Summit partner Anarock predicted USD 8 Billion capital inflows in the Indian realty sector in the next fiscal. The capital will be pumped in various asset classes across Residential, Commercial, Logistics, Data Centres, etc.
APREA believes the market capitalization for the Asia Pacific (APAC) real estate markets has grown over 400% in the last 15 years and have outperformed the broader markets in the past 20 years with increasing participation from institutional investors. Over 50% of investments in India is in the real estate and the sector is expected to reach a 1 trillion USD mark in the next few years. The Institutionalisation is expected to continue.
Mr Rajan Bandelkar, Vice Chairman, NAREDCO Maharashtra said, “The zero stamp duty intervention set the precedence and boosted the entire sector in a growth mode. It ensured a quick inventory turnover and the trend will continue in the long-run. The next fiscal will see more liquidity with the foreign investors coming in action.”
Mr Sandeep Runwal, President-Elect, NAREDCO Maharashtra said, “The bullish foreign funds will provide clean funds to the developers to expand their operations. This will help complete projects and bring a level–playing field among the organized developers. The lower tax regime has given volumes without impacting the Government’s revenues.”
Ms Sigrid Zialcita, CEO, Asia Pacific Real Estate Association (APREA) said, “We expect the region’s real estate investments to rebound and to register inflows of over USD 660 billion next year with China and India remaining the region’s top emerging markets. This regains most of the ground lost in 2020, as conducive financing conditions, pent-up demand as deal-making restarts and the rollout of successful vaccine headlines the recovery. We at APREA have incessantly endeavoured to raise awareness amongst the investors, across all our APAC chapters including India. India real estate sector is set to attract Institutional Investments underpinned by fast urbanization, favourable regulatory norms and high demand for residential and office premises across India.”
Mr Shobhit Agarwal, the Managing Director and CEO of Anarock Capital Advisors, said, “Decentralisation is the theme that is going to get prominence in real estate; not just in India but across the world. The ongoing pandemic has taught us that proximity to home is more important than the scale of it. Be it offices, Medicare, hospitality or warehousing; companies will start focusing on decentralising the facilities rather than having the mega centralised facility.”
The Summit will be graced by dignitaries like Shri Hardeep Singh Puri, Minister of State (Independent Charge) of the Ministry of Housing and Urban Affairs; Shri Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs, Government of India; Mr. Keki Mistry, Vice Chairman, HDFC Ltd; Ms Sigrid Zialcita, CEO, APREA.
