POSITIVE POLICIES & NEWS ON THE INDIAN REAL ESTATE LANDSCAPE - AN OVERVIEW
  FROM THE FOUNDER’S DESK
 
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One of the global events this month, which kept the world on tenterhooks, was the much-awaited BREXIT. The Indian elite has always been inclined towards London as it has been a preferred holiday and investment destination. However, post BREXIT, or Britain’s exit from the European Union, the situation will become a little different. While property prices in London will be lower, this cannot be seen as an attractive option for investment. The UK economy is most likely headed for a phase of uncertainty and slowdown. In such a situation where property prices continue to go down, it will not offer good returns in the future. Thus, from a broader perspective, the Indian elite do not have a reason to turn to UK housing for investment purposes. The impact on FDI inflows will also be nil as UK contributes a mere 8%-9% of the total overseas funds.

Back home, Chandigarh moves a step towards conclusive land titling system. Lack of clear land titles and title insurance in India makes it difficult for developers to acquire suitable land parcels. This often results in long-drawn and expensive litigation for them. Liases Foras has always believed that India’s land titling system calls for a much-needed overhaul. This conclusive mechanism will not only simplify land dealings, but also enhance transparency and reduce unnecessary litigation expenses.

In the current times where increase in guidance values or Ready Reckoner rates is the norm of the day, Gurgaon has chosen to tread a different path. For the first time in a decade, the circle rates were slashed by 15%. This is a rare move but totally in sync with promotion of affordable housing. Let us see if this move pulls up the flagging sales in Gurgaon.

Real estate functions on certain pull factors. One such factor is job creation abilities of a location. Realty in cities like Bengaluru, Pune and Hyderabad has prospered on this single biggest factor. However, cities like Kolkata faltered on this front. The City of Joy has always scored lower than its peers due to low employment prospects. But this time the talks of the West Bengal government planning to reconsider the SEZs of Infosys and Wipro comes like a lease of hope. If implemented, it could be a major turning point for Kolkata realty.

Pankaj Kapoor
MD and Founder, Liases Foras Real Estate Ratings and Research
 
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INDIA AT A GLANCE

Minimum enhancement of 9 sq mt carpet area required under Urban Housing Mission
INDIA AT A GLANCE To be eligible for central assistance under the 'Beneficiary Led Construction' component of the Prime Minister's Awas Yojana (Urban), a minimum addition of 9 sq mt of carpet area to the existing house will be required. The new guidelines also stated that after the required minimum of 9 sq mt carpet area enhancement, the total carpet area shall not be less than 21 sq mt and must not be more than 30 sq mt. This has been done primarily to increase the area under the coverage of Housing for All. The government has assessed a housing shortage of 20 million houses in urban areas by 2022 and this move is completely in line with the larger mission.
Source: News reports

India seeks German investment in infrastructure sector

The High Powered Expert Committee of the Indian Government in 2011 has estimated investment requirement for urban infrastructure over the 20-year period (2012-31) of more than $ 650 billion and operation and maintenance (O&M) costs of more than $ 330 billion. In light of the above, India has invited Germany to partner with it in its Smart Cities growth story. Union Minister, Venkaiah Naidu said that Germany is already assisting in the development of Bhubaneswar, Kochi and Coimbatore as smart cities. He further stated that we have a lot to learn from Germany’s expertise in building pro-environment, sustainable cities.

Source: News reports

Sebi to relax REIT norms to attract investors
Sebi has announced many relaxations to its norms for REITs. It also plans to ease compliance rules for foreign fund managers keen to relocate to India. One of the major changes allows them to invest a large portion of funds in under-construction assets. REITs would be allowed to have a larger number of sponsors, while regulations regarding the minimum public offer size and related party transactions could also be eased. REITS are believed to rope in more small investors into real estate, which was all along considered the domain of large investors. Sebi to relax REIT norms to attract investors
Source: News reports
 
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Fine Builders may have to pay 11% interest for delayed projects

In its draft rules, the Government has stated that Developers may have to pay 11.2 % interest to buyers for delay in handing over apartments and homes. The rules also states that projects without a completion certificate will have to register with the Real Estate Regulatory Authority, to be set up in States/UTs within three months of the rules being notified. Builders will have to give information on completion date of a project, size of flats and promised facilities. Delay is a big menace in the Real Estate sector in India and the rules are a step towards forcing developers to complete projects at the earliest.
Source: News reports
7th Pay Commission given a nod for implementation

The implementation of the 7th Pay Commission has brought cheer to the Real Estate sector. A rise in salary for government employees means increase in purchasing power. We believe tier II cities will benefit most from this development as the population there mostly consists of government employees. Due to the slowdown in prices, it is the right time for buyers to enter the market. Government employees, who form a large part of the workforce, have been waiting for this implementation, before taking a purchase decision.

Source: News reports
7th Pay Commission
 
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NCR

Gurgaon cuts circle rate first time in a decade


The Haryana government has decided to reduce collector rates of immovable property in Gurgaon by 15% in view of decrease in property prices in the last few months. Homebuyers will now face a reduced burden of stamp duty, registration charges and property taxes. Since the circle rates cut applies to commercial properties too, developers will also benefit as stamp duty, fungible FSI and TDR are determined by the circle rate. This is quite likely to boost the sluggish real estate market in Gurgaon.

Source: News reports

Series of development projects for Gurgaon
Series of development projects for Gurgaon Haryana Chief Minister Manohar Lal Khattar announced several schemes, including development of a smart power grid, in Gurgaon. Rs 36.61 crore has been sanctioned for the project. Four new underpasses will assigned be constructed at Rajeev Chowk, Iffco Chowk, Signature Tower, which will ease traffic problems at Gurgaon Expressway and service roads. This announcement has brought about a lot of excitement amongst the citizens of Gurgaon. It is hoped that infrastructural changes like this will turn around the muted sentiment prevailing in the suburb.
Source: News reports

Haryana to develop area along Kundli-Manesar-Palwal Expressway

The government has announced major projects to develop controlled area of two km width on both sides of Palwal-Manesar section. As the 136 km long Kundli-Manesar-Palwal Expressway falling in Haryana's Palwal district, there are huge possibilities of development in industrial, commercial and service sectors in the area. Apart from this, passing of Eastern Peripheral Expressway from the district has also augmented the possibilities of development in these areas.

Source: News reports
 
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New exit policy for Noida developers
Authorities in Noida-Greater Noida region are on the verge of implementing an exit policy for builders looking to surrender surplus land. The civic authorities will soon finalise a proposal on this and send it to the Uttar Pradesh government for approval. It is believed that owing to the slow pace of sales, many builders want to surrender surplus land. This is likely to be a move in the right direction as sitting on acres of unused land is detrimental to the economics of real estate.

Source: News reports
Noida developers
TOD policy impact in focus

The government's nod to transit oriented development in Gurgaon is set to be a game changer. Areas up to 500 mt from the metro routes will fall under 'intense TOD zone', and will get a FAR of 3.5, from 1.75 earlier, while areas under 'transition TOD zone, between 500 mt and 800 mt, will get a FAR of 2.5. As a result, the supply will go up. It remains to be seen if developers will really be attracted to the increased TDRs and whether the TOD policy has an impact on the pricing front.

Source: News reports

Delhi-Meerut E-way: Dasna-Meerut stretch gets environment clearance
Delhi-Meerut E-way The Centre has given its environmental clearance to construction of Dasna-Meerut six-lane connector under Delhi-Meerut Expressway at a cost of Rs 1,658 crore. The ambitious Delhi-Meerut Expressway project, aimed at de-congesting traffic in the national capital, proposes construction of a total of four stretches, including Nizamuddin Bridge to UP border, UP border to Dasna and Dasna to Hapur.

Source: News reports
 
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MMR

Revised Mumbai DP may cheer large land owners


The revised draft development plan (DP-34) will be a bonanza for some large developers owning large tracts of land in the suburbs currently marked as No-Development Zones (NDZ). The BMC has now offered them several incentives to develop their land after asking them to surrender a portion of it for affordable housing and open spaces. The scheme is only for NDZ land owners who control more than 10 acres.

Source: News reports
Mumbai 2014-2034
Navi Mumbai to get more land for residential development

The draft notification of the State Urban Development Department (UDD) on converting unutilised industrial plots into residential units will open up huge tracts of land earlier earmarked for industry. An official stated that the state government will finalise the draft based on the feedback received. Once it becomes a government resolution, many unutilised plots on the Thane-Belapur industrial belt are likely to be converted for residential housing. Unlocking tracts of land will bring in more supply which will result in efficiency in prices.

Source: News reports
Navi Mumbai Navi Mumbai development plan to be drafted by civic body staff

The much awaited Development Plan (DP) of the civic body will now be drafted by the civic town planning department. Earlier plans to rope in a private agency have been shelved. The Development Plan for Navi Mumbai is overdue and is necessary to address issues such as encroachments and illegal constructions. It has also been planned that the city limits will be mapped and existing land use will be identified by superimposing satellite imagery upon the base map available with the department.

Source: News reports
MVAT will apply to Transfer of Development Rights for slums

The Sales Tax Tribunal, Mumbai bench, stated that allotment of Transfer of Development Rights (TDR) to a builder under a slum redevelopment scheme is taxable under the Maharashtra Value Added Tax Act. 8 This might come as a big shock to builders and they might eventually shy away from taking up slum rehabilitation projects. MMR, which is reeling under lack of space, is in dire need of redevelopment. This is one avenue which has the potential to promote affordable housing in the city.

Source: News reports
 
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Gayatri Projects wins contract for Navi Mumbai Airport
Infrastructure Company Gayatri Projects stated that it has won Rs 700 crore project, a part of larger Navi Mumbai International Airport, from CIDCO. The Navi Mumbai airport has been the major factor influencing the future development of this satellite city. The airport, which has been pending for long, is set to see some progress. Most of the projects and micro markets in Navi Mumbai are banking heavily on the airport and any progress on that front spurs hope.

Source: News reports
International Airport Navi Mumbai
Government proposes integrated township projects in Maharashtra

In a move to boost mega townships on the city outskirts and regional plans, the Maharashtra government has proposed to replace Special Township Project with Integrated Township Project (ITP). This will be applicable for the regional plans of Nagpur, Chandrapur-Ballarpur, Amravati and Akola-Washim in Vidarbha. ITP will be permitted in zones other than residential and commercial, subject to premium charges. It will be permitted in afforestation, hill top, hill slope, public, semi-public, industrial, agriculture and no development zones.

Source: News reports
 
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Hyderabad

Karimnagar makes it to the Smart Cities list


HyderabadThe central government announced that Karimnagar has replaced Hyderabad in the Smart Cities list. The Telangana government said the Rs 100 crore that is given as part of the project for a city was not adequate for Hyderabad and hence asked the Center to include Karimnagar. Meanwhile, a bigger budget has been sought for Hyderabad for developing it as a Smart City.

Source: News reports

Ahmedabad

Dholera Smart City set to be operational by 2019
AhmedabadThe Gujarat government has stated that the upcoming smart city at Dholera Special Investment Region (SIR) will become operational by 2019 with many industrial units and a population of around 1 lakh people living in it. The ICT facilities will be looked after by Wipro. The various facilities envisioned for the Smart City include an integrated operation centre, e-governance, data centre, city-wide network and city dashboards.

Source: News reports
 
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Chennai

Embassy Group to co-develop SEZ in Chennai
Chennai Embassy Group is all set to co-develop a 30-acre Special Economic Zone in Chennai. The project on Thoraipakkam Pallavaram Radial Road in Chennai would be known as "Embassy Splendid TechZone. The first phase of the project is expected to be completed by 2019. IT/ ITES SEZs have been one of the strong factors of realty growth in Chennai. Out of the 35-40 SEZs operational in Chennai, the maximum number are in the IT/ITES segment.
Source: News reports

Kolkata

Wipro seeks approval to set up IT SEZ in Kolkata
Wipro has sought the government’s nod to set up an IT Special Economic Zone (SEZ) in Kolkata. The software firm has proposed to set up IT/ITeS SEZ over an area of 19.76 hectares in the city. In the past Infosys proposed to set up an SEZ in the city but it hasn’t worked out so far. There is news that the Government is planning to reconsider them and may come around this time. Kolkata realty suffers mainly on account of insufficient employment prospects. SEZs like this are the need of the hour.

Source: News reports
Kolkata
 
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Kolkata civic body to implement unit area assessment for determining property tax

The Kolkata Municipal Corporation is finally set to implement the Unit Area Assessment (UAA) for determination of property tax for city's property owners. The new system entails that a property owner can go for self-assessment of his/her property and declare the same to the civic body after filling up a prescribed format. Any deviation from the declared statement will attract penalty. As on now this system will be kept as optional. This system is believed to reduces tax burden on the middle class.

Source: News reports

Tier II at a glance

Chandigarh

Conclusive land titling system to become a reality in India


Chandigarh is all set to be the first city in India to officially introduce a conclusive land titling system. Under the new system, the estate office (and subsequently other property record keeping offices) will issue an online certificate of property title that will certify the ownership rights to the extent of share percentage of respective property. This certificate will also display a unique land parcel ID apart from the mandatory details.

Source: News reports

Lucknow

Minimum construction area for flats reduced to 300 sq m


Lucknow Development Authority (LDA) has proposed to reduce land limit for building flats from 2,000 square mt to 300 sq mt. The new rule implies both builders and individuals can construct up to 3-storey buildings in small plots of 300 Sqmt. LDA will allow G+3 floors in such plots. Beyond 300 sq mt, for every 100 sq mt area, one housing unit can be added. This change was eyed by the LDA for quite some time to make housing units available to maximum number of people. The areas being considered are Mahanagar, Nirala Nagar, Aliganj, Indiranagar, Vikas Nagar, Gomtinagar, etc.

Source: News reports

Surat

Surat Municipal Corporation to redevelop 13 slum settlements


Surat Municipal Corporation (SMC) has decided to redevelop 13 slum settlements in the city. As a result at least 4,350 new houses would be constructed in public-private partnership under slum redevelopment programme for slum dwellers. Private developers would be given additional FSI for their work. Redevelopment policy is a strong step towards affordable housing and it is strongly advocated. It also ensures optimal utilisation of available land.

Source: News reports

Kochi/ Trivandrum

30,000 beneficiaries for Credit-linked Subsidy Scheme in Kerala


As a part of Pradhan Mantri Awas Yojana (PMAY), 30,000 homeless people in Kerala will be given housing loans. The project aims at ensuring homes for homeless in urban areas by 2022. List of beneficiaries in 11 municipalities in various districts has been finalised. There are a total of 26,255 beneficiaries for the project. The loans will be given to those with annual income less than Rs 6 lakhs under Credit Linked Subsidy Scheme. The program, if implemented efficiently, seems to be a very good idea. It will provide a demand side intervention by reducing the overall cost of the flat and eventually increasing the affordability.

Source: News reports
 
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  Disclaimer
 
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The content discussed above is based on reports by leading national newspapers. Neither the whole nor any part of this document or any reference to it should be copied or reproduced without Liases Foras’ prior written approval.

The data of real estate projects has been collected through field surveys as well as primary and secondary research. As a result of the methodology, sources of information are not always under control of Liases Foras. The information and analytics also undergoes estimates and compilations derived out of statistical procedures. Liases Foras does not by any means guarantee the accuracy of the information provided in the above document. However, Liases Foras undertakes due care and statistical checks in the collection of the data and its research. LiasesForas makes no representation or warranty regarding the standing, credit or otherwise of any person, firm or company mentioned in the above document, or the suitability of the information for any purpose. A person is required to undertake his own due diligence with regard to its investment decisions, and investment decisions should not be purely based on the document presented above.

Under no circumstances shall Liases Foras or any of its successors, parents, subsidiaries, affiliates, officers, directors, shareholders , employees, agents, representatives, attorneys and their respective heirs, successors and assigns be liable for any damages, including loss of money, goodwill or reputation, direct, incidental, punitive, special, consequential or exemplary damages that directly or indirectly results from the use of, or the inability to use, of the information by Liases Foras in the above document.

Authors:

Mr. Pankaj Kapoor


Founder and MD-Liases Foras Real Estate Ratings and Research Pvt. Ltd

Email id: pankaj@liasesforas.com

Ms. Namrata Sen Chanda

Content Manager


Email id: namrata@liasesforas.com
 
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About Us. Liases Foras: The pioneer in scientific reasearch in real estate Strategic Partner: dmg::information

Founded in 1998, Liases Foras is a non-brokerage research centric firm that offers data and advisory services. Our works on industry and scientific prognosis of the local market is highly regarded. We have an organized and structured data source on real estate and property trends in India, which is updated on quarterly basis by primary market survey.

With a team of MBA’s, Urban planners, architects, chartered accountants and statisticians Liases Foras is progressively done studies in field of valuation, risk assessment, future forecasting and price behaviour. Our clientele includes leading mortgage companies such as HDFC Ltd, Axis, among others, real estate fund houses, developers, government bodies and leading international research organizations. We are also research partner for CNBC Awaaz real estate awards from 2012 onwards.

In 2015, DMG information, UK acknowledged us as their strategic partners.
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