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Budget21: FM provides Shot In the Arm to Realty by extending additional tax sops on home loan interest

Feb 1, 2021 by Neel Achary 0 Comments #real estate, #realty

New Delhi, February 01, 2021: Continuing with its focus on affordable housing, the government today extended benefits of availing an additional Rs 1.5 lakh tax deduction on home loan interest till 31 March 2022. The move is aimed at fulfilling Prime Minister’s Narendra Modi’s vision of ‘Housing For All” by 2022 and will provide a huge impetus to the residential real estate sector. “This Government sees ‘Housing for All’ and affordable housing as priority areas,” said Finance Minister Nirmala Sitharam while presenting the Union Budget.

Considering the present scenario wherein challenges are faced by the migrant workers to find suitable accommodation in metros and other large cities, Sitharaman also proposed to allow new tax exemption for notified Affordable Rental Housing Projects. “The government is committed to provide affordable rental housing for migrant workers,” she said.

“In Real Estate sector, Affordable Housing is set to get boost from the tax holiday being extended for one more year till March 31, 2022 and Rs1.5 lakh for interest paid on loans to purchase an affordable house being extended another year. The demand for affordable housing is at an all time high, and we will focus on fulfilling it. we will keep contributing to PM Shri Narendra Modi’s mission of ‘Housing For All’. The focus of the government on infrastructural development and MSMEs will lead to job creation, which will help people get financially stable. Looking at the experience of people in last one year, affordable housing will get more buyers as people want to secure their lives by owning a home,” said Pradeep Aggarwal, Founder & Chairman – Signature Global Group & Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development.

The sales of affordable houses have been robust in the country for quite some time now. The number of unsold affordable homes came down to 3.90 lakh units at the end of 2019 from as many as 4.52 lakh units at the end of 2018, according to a report by property portal Proptiger.com

“The budget announcement made today by the Honorable Finance Minister are indeed progressive and will help the industry in many ways. The affordable homes market has potential to take care of the housing problem of the citizens of the country to a large extent. The real estate industry is at the cusp of transition in the country and the twin announcement by the FM on rental housing and affordable housing both will provide a lot of support to the sector at this juncture. However, the government could have done more to alleviate the some if the pandemic inflicted pains for the industry which is unfortunately missing. The pandemic has dealt a heavy blow to the industry and any short-term easy financing solution for the developers could have made the deal sweeter,” said Yash Miglani, MD, Migsun Group.

The migrant workers have been facing some issues in finding the right kind of accommodation at decent payouts in big cities but the Budget announcement today will a long way in addressing those issues.

“Government’s focus and commitment for the real estate industry can clearly be gauged for the announcement made by the Finance Minister Niramala Sitharaman today. The affordable housing has emerged as important segment of the realty industry and FM has rightly address the biggest concern of the developers and buyers of such projects. Even the rental housing design of the government will solve the problem of residences for migrant workers to a great extent. The push to infrastructure will also benefit the real estate industry indirectly as better infrastructure in the country will help in real estate projects spreading out of compact city limits. A little bit of clarity on Input Tax Credit would have made the matters even better for the industry. All in all, it’s a good budget for the real estate industry” said Vikas Garg, Deputy Managing Director, MRG World.

Sitharaman had first announced this additional tax deduction on home loan interest in July 2019 for all home loans availed till 31 March 2020. It was extended by her till 31 March 2021 later. The Minister today extended it till 31 March 2022, much to the cheer of the real estate industry which has been badly battered by the pandemic.

“The Budget announcement made by the Finance Minister today addresses an important problem in the real estate industry today, i.e. housing for the migrant workers. The decision to provide exemption from tax to the notified affordable rental housing projects will maximize the migrant workers to get a home of their choice in a big city at lower payment. However, the government did not address the long pending demand of the industry to expand the definition of affordable house. The present limit of Rs 45 lakhs as the price of a house to be called affordable is too small and must have been raised to Rs 75 lakhs,” said Kapil Kapur, Director, Sales, Strategy & Business Development, Bullmen Realty.

Homes costing up to Rs 45 lakh are defined as affordable houses. The government had cut the GST on affordable houses to 1 percent some time ago with a view to help the segment.

“The union budget has reiterated the government’s focus on Affordable Housing through concentrated policy impetus in the form of tax exemptions and tax holidays. Another good thing discussed in the budget is the multilayered support to infrastructure. The Budget has announced a host of policies and initiatives to boost urban development, enhance urban infrastructure, monetize freight corridors, upscale power generation capacity, and commence work on numerous large scale roadway & railway projects. The government has also announced huge allocations in the urban Swachh Bharat mission 2.0. These initiatives will boost the overall infrastructure, increase economic productivity, improve the livability index of urban cities alongside building real estate demand in Indian urban corridors,” said Ankit Kansal, Founder & MD, 360 Realtors.

Business World

Construction of The Wadhwa Group’s new commercial project on GMLR begins in full swing Bhumi Pujan of the site took place after Diwali

Nov 21, 2020 by Gouri Achary 0 Comments #Construction, #GMLR, #Mr. Makhija, #realty, #Wadhwa Group

The realty market has witnessed a tremendous recovery this festive season. Although the celebrations were muted this Diwali across the world due to Covid-19 pandemic, there is much more to cheer for the real estate industry. Sales are almost back to pre-Covid levels and the festive season has served as an additional demand driver.

The spread of the novel coronavirus had impacted a lot of construction projects but as migrant workers return back to work post Diwali after spending quality time with their families, we can see construction activities starting in full swing. The Wadhwa Group too, in association with MICL and Chandak Group performed the Bhumi Pujan while they laid the foundation of their commercial project ‘The Gateway’ at site on Goregaon Mulund Link Road adhering to all safety guidelines. When it comes to designing office spaces for modern businesses, The Gateway is crafted for a flawless first impression.

Commenting on the occasion, Mr. Navin Makhija, Managing Director, The Wadhwa Group said, “After the roaring success of our residential projects Atmosphere & Atmosphere O2 on GMLR, we are delighted to start construction of our commercial project ‘The Gateway’ in its vicinity which leaves no stone unturned to create the perfect space that fuels ideas for growth and success. The overall situation is improving and we are sensing a positive sentiment among the investors. Apart from our residential projects, we are seeing a lot of demand for this newly launched boutique format commercial office portfolio as well during this festive season. We see demand coming in from people that are moving from co-working spaces to owing small independent office space to have control over safety, security and hygiene within the premises.”

“We thank all our labourers who have returned back to work. We will be doubly ensuring that proper precautions are taken from our end and utmost care of hygiene will be the priority for labourers by all means. A standard operating procedure (SOP) has been formulated at all our sites. Every labourer has to adhere to the instructions and protocols set at our end that would help in suitable functioning of the system such as maintaining social distancing norms, wearing masks, proper sanitization and periodic medical check-ups with appropriate documentation,” Mr. Makhija further added.

The commercial tower ‘The Gateway’ will be a 17 storey complex offering boutique offices for small and medium businesses and will also offer G+1 floor of retail convenience. The office spaces will be provided with an area ranging from 350 sqft to 489 sqft and each office will also have the provision for pantry and washroom. Offices on each side can be merged for a large plate office up to 3780 sqft. It will also provide 7+1 service elevator dedicated for office blocks based on their location. Adhering to The Wadhwa Group’s design philosophy, every office in this project is designed with the opportunity for natural light & ventilation too. The washrooms inside every office have been provided on the external side of the building, eliminating the need for mechanical ventilation. The floor lobbies & staircases will also have adequate natural ventilation.

In a true sense, The Gateway is designed to accommodate the diverse needs of Mumbai’s most dynamic businesses with its central location, state-of-the-art amenities like double-height drop off & air-conditioned entrance lobby, Café & waiting lounge, the convenience of retail in the premises etc.

Located right on Goregaon Mulund Link Road, it is equidistant to the arterial LBS and Eastern Express Highway, offering a great corridor for connectivity to the city. With its emerging elite culture, Mulund is a perfect gateway with a blend of connectivity, convenience and lifestyle and is also well connected to business districts and leisure options like malls, high streets and hotels.

Business World

Noida- Commercial realty hotspot with varied growth opportunities

Nov 20, 2020 by Gouri Achary 0 Comments #realty, #Sagar Saxena, #Spectrum Metro

The past decades have observed Indian economy taking a big jump which triggered a rippling growth effect in other sectors as well. Commercial real estate is one of those sectors that have been directly influenced. Though the growth pattern is visible throughout the country, the satellite city of Noida offers wonderful opportunities for investors looking to capitalize favourable market opportunities present.

Speaking on the same Sagar Saxena, Project Head, Spectrum Metro said, “The rise in the number of start-ups and entrepreneurs has resulted in an increased demand for retail shops, office spaces, serviced apartments and other commercial avenues. For the Delhi-NCR property market, Noida holds attractive characteristics such as affordability and growth-orientations due to the presence of other industries in proximity.”

In recent times, infrastructure development has been happening at a rapid pace in the region. From the renowned Yamuna Expressway, Noida Metro Line bringing connectivity to extended regions of Noida Extension and the capital, there are lots of projects that are known to fuel the development of the region to a large extent. Once the most overlooked part of NCR, Noida is all set to become the favourite commercial real estate destination among investors.

Affordable rates in the residential and commercial segment have become the need of the hour, investors are always seeking to get amazing returns on their investment. Fortunately, Noida has all elements of affordability in just the right proportion. In comparison to its counterparts like Gurugram and Faridabad, Noida is known to exhibit easy affordability of commercial properties in the region. From high-end to budget commercial spaces, there is an abundant variety for everyone.

The readily available manpower at reasonable costs makes Noida a favourable destination. The city is known to have many textile factories that rely heavily on raw manpower. Both skilled and unskilled human resources are available in the region that makes it a preferable hotspot.

Noida is seamlessly connected to Delhi via rail and road network. Prime locations of Delhi, such as Connaught Place, Nehru Place, Chandni Chowk and Laxmi Nagar are only a few minutes’ drive from here. Strategically built Noida-Greater Noida Expressway has made commuting easier from the sectors situated on the expressway and in Greater Noida. In addition, travellers from any corner of Delhi, Vaishali and Anand Vihar can reach here without a hassle via metro. Jewar International Airport and Film City development announcements have further captivated attention from global investors. Conclusively, it can be rightly said that Noida is all set to write a new growth story for the entire real estate market of the NCR region.

Business World

Return of migrant workers to kindle revival in realty

Nov 6, 2020 by Gouri Achary 0 Comments #Dhiraj Bora, #Harvinder Singh Sikka, #migrant workers, #Mr. Vikas Bhasin, #NAREDCO-UP, #Paramount Group, #realty, #SAYA Homes, #Sikka Group

Real estate sector is the backbone of the country, impacting overall GDP and the employment ratio for a great magnitude of the labour force. As the realtors strive hard for returning to the Pre-COVID levels, the impact April-June quarter had on the sector continues to get gradually subdued. One of the significant driving factors determining this revival in realty is the return of migrant workers back to metro cities.

Speaking on the same Mr. Vikas Bhasin, MD, SAYA Homes said, “The exodus of labourers who went back to their hometowns and villages in the hope of saving and earning more in the adverse times of lockdown, began changing their perception as cities began to unlock and construction sites were open for providing them job opportunities. The labourers that stayed back in the cities were made to do rotational shifts and upskilling to make up for the time lost during lockdown months and ensure timely deliveries of projects.”

Delhi NCR, being the major real estate market of North India, gets migrant labourers from the nearby states of Uttar Pradesh, Haryana, Bihar, Madhya Pradesh, Jharkhand etc.

Harvinder Singh Sikka, Managing Director Sikka Group said, “Many established players in the construction and real estate began rolling out facilities and incentives to attract the migrants back to the cities such as flight tickets, insurances, better living conditions etc.”

Real estate body NAREDCO-UP also signed a memorandum of understanding with the Yogi Adityanath government on May 29 to facilitate buses for return of migrant workers. The continuation of operations in the infrastructure and real estate sector provides a significant boost to the overall development scenario in a country.

Dhiraj Bora, Head Marketing and Communication, Paramount Group said, “NCR stands with an unsold housing stock of about two lakh units, reported a recent survey. A significant portion of it remains in the under-construction categories, and the return of labourers would bring the restored glory by kickstarting the marred construction activities due to lockdown and disrupted supply chain. Sales have started picking up during the festive season, and demand for property is consistent across the verticals of RTMI homes and under-construction projects.”

Timely deliveries of projects in the coming quarters will further strengthen the positive sentiment in the realty sector and bring back buyers and investors in greater numbers than present times.

Business World

Introducing India’s First Gamified Realty Sales Enablement Prop-tech Platform- KAGAAY

Nov 6, 2020 by Gouri Achary 0 Comments #Bankers, #Housing sector, #Investors & Buyers., #KAGAAY, #Ms. Swapna More, #real estate, #Realtors, #realty

KAGAAY – A Real Estate Sales Start-up, bootstrapped with around 20 million of investment, co-founded by Ms. Swapna More, is all set to establish their foot in the prop-tech segment with their India’s First Gamified Realty Sales Enablement platform, an app for IOS and android users. The app has already 5000+downloads and more than 100 reviews by now with a Google Play rating of 4.8. It has been designed and developed with two major perspectives in mind: The Fast Track Asset Liquidation Enablement for Realtors & Bankers and Right Price Asset Advantage for Investors & Buyers.

The impact of the novel Coronavirus on Indian real estate has been unprecedented. The Housing sector was in bad shape before the Covid-19 pandemic, which has only added to the troubles of the wounded industry. The projected loss to the Indian real estate sector is estimated to be 1 trillion INR by the end of the year. The second quarter of the year 2020 saw a severe blow of unprecedented scale in the real estate sector in particular. Property sales declined by around 80 per cent in major real estate markets of India during April and May 2020, as compared to a year before. New launches suffered a drop of 75 per cent as compared to January and March 2020. However, just like other industries, the digital transformation of the real estate sector has become the need of the hour.

Foreseeing the future; KAGAAY was launched in Nov-2019. The pandemic gave more opportunity and hence turn out to be a blessing in disguise for the realtors and buyers collaborating with KAGAAY. This app is introduced in India with an agenda of benefitting the two P’s – People and Property. KAGAAY is a sales enablement platform that ditches the discovery approach and is designed to pull in sales by reaching out to the in-market audience.

Talking about the app Ms. Swapna More Co-Founder KAGAAY said that, “KAGAAY’s unique sales enable-feature helps in boosting up the property’s sales graph by roping into our gamified prop-tech platform. Our app majorly addresses two major issues prevailing in the Real Estate Sector i.e. – A large Number of Unsold Inventory & Longer Sales Life Cycle Time with a Lesser Percentage of Confirmed Sales, which is approx. 1- 6 months to close the whole deal. Leaving the top real estate developers aside, a substantial section of players in the real estate sector constantly faces these two issues and also other problems like – financial distress, lack of execution capability, an oversupply of inventory, GST complications, excessive land banking, Lack of Understanding of the demand-supply dynamics, etc. which in turn affect their sales and marketing cycles.”

Other Salient feature of the app which makes KAGAAY a unique and one of its kind are:

• First Start-up with inbuilt facilities for providing End to End Sales Solutions to the Realty Industry

• An interactive platform between Buyers and Sellers.

• Quality affordable and luxury residential, commercial and land/options to the general public at the right prices.
• 100% Digital App-based. Submission of Applications will be ‘On-Line’.

• It’s a comprehensive sales engine for realty withdraws of lots, flash sales, and e-auction, the first in India.

All the sales enablement drives which include the draw of lots, flash sales, e-auction, etc. all will be conducted online by App on the system-generated selection method and there will be NO HUMAN INTERVENTION during the entire process, from application to the declaration of result.

KAGAAY’s Unique Offerings for Investors:

• Mega Draw: The traditional draw of lots, blended with care, for the realty industry.

• Flash Sale: The advantage of high volume sales tailor-made for high-value assets like Residential flats, commercial offices, land, and buildings.

• E-Auction: Placed under the hammer for easier and faster liquidation for the realtors and bankers as well as price-savvy, authenticity-conscious realty investors or buyers.

• Virtual Expo: Enhancing visibility for the assets in times where physical mobility is advised mitigation for the greater good of humankind.

Business World

Pune witnessed 55% rise in new residential launches in Q3; sales grew 58% sequentially: JLL

Oct 30, 2020 by Gouri Achary 0 Comments #Dr. Samantak Das, #JLL Research., #realty, #Sanjay Bajaj

Pune witnessed 1,756 new unit launches in Q3 2020, an increase of 55% over the previous quarter, according to JLL Research. This strong growth was on a low base of Q2 2020 which was significantly impacted owing to the severe lockdown restriction in the wake of an ongoing pandemic. Prominent locations such as Kharadi, Hinjewadi, Wakad and Hadapsar saw increased momentum and accounted for more than 50% of the launches during the quarter.

With economic activities gradually getting back on track, the city is likely to see a strong recovery in sales after the slump in Q2 2020. Housing sales grew by 58% on a sequential basis clocking about 1,344 units. Homebuyers preferred projects from developers who have an established track record and which are closer to prominent office locations.

There are also a higher number of enquiries for completed and nearing completion projects as compared to those which have recently launched. There is growing acceptance of digital platforms amongst homebuyers to complete their home purchase process from raising an enquiry to making the payment through the developer’s online window.

	Q2 2020	Q3 2020	Growth (%) – Q3 2020 over Q2 2020
Launches (units)	1,135	1,756	55%
Sales (units)	851	1,344	58%

Source: Real Estate Intelligence Service (JLL), 2020, JLL Research

“Pune witnessed a growth of 55% in terms of new launches over the last quarter. Developers continued to align new supply with demand and the majority of these launches were in affordable and mid segments. Further, the city has also witnessed healthy traction in the luxury segments which was earlier not visible ” said Sanjay Bajaj, Managing Director, Pune, JLL India.

“In the subsequent quarters, the translation of demand into sales will primarily hinge on enhanced consumer confidence, which in turn depends upon the continued implementation of progressive government policies amidst the gradual revival of the Indian economy at large.” “Pertaining to residential, the scenario for Pune has improved significantly in the last few months, sales has certainly increased owing to a reduction in the stamp duty by the government, low bank intrest rates, attractive schemes by builders, and competitive rates.

The onset of the festive season will help drive sales, and in addition to the reasons stated above we have reached approximately 75% of sales of pre-COVID levels and this quarter will see steady growth as well. Recent trends indicate projects that are near completion stage are witnessing larger traction. Buyers are purchasing assets from more renowned developers with a proven track record, added product value and ability to deliver,” he added.

Residential market activity all over India is also being supported by renewed interest from NRIs in Q3 2020, resulting in more pent up demand in the market and increased enquiries received by developers.

“The further easing of lockdown restrictions and the upcoming festive season might help in bringing buyers back to the market. An assessment of years to sell reveals that the expected time to liquidate stock has increased from 3.6 years in Q2 2020 to 4 years in Q3 2020. While the residential space remains unpredictable, favourable supply dynamics could deliver potential upside for both homebuyers and developers in the medium-term,” said, Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.

Focus on mid and affordable segment continues in the country

New launches were restricted with 12,654 units launched in the third quarter, a decline of 14% quarter-on-quarter. Developers focused on completion of under-construction projects and clearing their existing inventory. Hyderabad and Mumbai accounted for over 60% of the total new launches in the quarter. The drop in new launches was driven by Bengaluru, which witnessed a substantial decline of over 80% as compared to Q2 2020. Development focus on mid and affordable segments continued in Q3 2020 with nearly 75% of the new launches in the sub INR 1 crore category. Moving ahead, the focus on these price segments is expected to continue with developers focusing to reap the benefits of strong pent up demand.

	Q2 2020 (in units)	Q3 2020 (in units)	Growth (%) – Q3 2020 over Q2 2020
Bengaluru	6,135	1,074	-82%
Chennai	182	1,487	717%
Delhi NCR	Negligible	699	–
Hyderabad	5,034	5,396	7%
Kolkata	Negligible	Negligible	–
Mumbai	2,294	2,242	-2%
Pune	1,135	1,756	55%
Total	14,780	12,654	-14%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

Unsold inventory dips across the country

Q3 2020 witnessed sales outpacing new launches as unsold inventory across the seven markets (Mumbai, Delhi NCR, Bengaluru, Hyderabad, Chennai, Pune and Kolkata ) decreased marginally from 459,378 to 457,427 units. Mumbai and Delhi NCR together account for more than 50% of the unsold stock which are at various stages of construction.

	Q2 2020 (in units)	Q3 2020 (in units)	Growth (%) – Q3 2020 over Q2 2020
Aggregate (7 cities)	459,378	457,427	-0.4%

Top 7 cities include Delhi NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Kolkata

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

Over the last few years, residential prices in most markets have remained stagnant. Developers have been operating with low margins and the chances of a significant reduction in prices is unlikely. In Q3 2020, prices remained largely stable across all the seven markets when compared to the previous quarter.

However, it is important to note that developers in certain markets are providing moderate price discounts to kickstart sales, thereby facilitating cash flows to tide over the crisis in the short term. Moreover, developers are offering flexible payment schemes such as no EMIs for a year and other schemes to attract prospective homebuyers who pressed ‘pause’ in the last few months. This could be the first signs of a broader recovery of the residential market in the country.

NOTE: *The comparison pertains to only last two quarters since the current crisis has no parallel and has infused uncertainty which we have not witnessed in the past decades.

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