The new GST-related announcement has given real estate developers the choice to either opt for the old rates and the accompanying input tax credit (ITC) benefits or else to adhere to the new reduced GST rate of 5% without ITC.
While not exactly ground-breaking, it is indeed an intelligent move by smart play by the incumbent Government. With this decision, it has carefully side-stepped conflict with both builders and buyers.
Most developers reacted to last month’s announcement of the new GST rate minus ITC with trepidation.
There was justifiable worry about what would happen to the input stock which they have accumulated much before as part of their long-term purchases. For them, this new move will be beneficial.
However, developers choosing to go with the second option of new GST rates may not be able to hike property prices in the immediate future.
The possibility of prices being hiked was a matter of concern for aspiring buyers, but the fact is that developers can ill afford to test the currently fragile market sentiment by raising rates immediately.
Like it or lump it, but Modi’s victory in 2014 ushered a new era in Indian real estate – starkly marked by his vision to set the ‘house’ in order and alter the scarred face of an unorganized sector beset by unscrupulous activities.
He tightened the Centre’s grip on real estate – previously the largest dump-yard for black money hoarders – and introduced big-bang schemes to benefit consumers.
From major policy overhauls to amendments in old Acts, from a decisive impetus to infrastructure development, and from the arguably Utopian 100 Smart Cities and Housing for All by 2022, one thing is clear – the Modi government set the stage for Indian real estate to flourish in the long-term.
The measures he took to achieve this did have short-term negative impacts, but nobody can argue that this is a case where short-term pain is necessary for the sake of long-term gain.
That said, the on-ground implementation for most of these initiatives is far from what could have been achieved even in just five years.
Let’s examine the five major initiatives Modi undertook for the real estate sector –
NCR and MMR account for 55% share of total 6 lakh affordable units launched across the top 7 cities; NCR saw maximum supply
Of the total 3.98 lakh units sold in sub INR 40 lakh category, NCR & MMR hold 57% share
Pune comes next with 1.13 lakh units launched and approx. 75K units sold in the affordable segment
Bengaluru, Chennai & Hyderabad saw the least activity in the affordable segment
Mumbai, 15 March 2019: It is the biggest shift that the Indian real estate market has seen so far. The previously ‘unaffordable’ real estate markets of NCR and MMR have led the thrust of affordable housing – in both new supply and housing sales – over the last five years.
ANAROCK Property Consultants are knowledge partners at the CII Real Estate Confluence 2019 to be held on Friday, 15 March in Mumbai.
This year’s conference theme ‘Maharashtra Real Estate: Ahead of the Curve – Refine. Reboot. Re-emerge’ is aptly chosen for the state which has been the forerunner in RERA adoption and implementation. ANAROCK, in partnership with CII, will also unveil its latest report ‘Affordable Housing: The Blue – Eyed Boy of Indian Real Estate’
Properties within INR 40 lakh budget see 23% fall in average sizes – from 750 sq. ft. in 2014 to 580 sq. ft. in 2018
Avg. property sizes in the top 7 cities decline by 17% in 5 years; from 1,390 sq. ft. in 2014 to 1,100 sq. ft. in 2018
Bangalore sees the least size reduction at 12%, MMR tops with 27% average decrease
When it comes to housing, size matters for all kinds of reasons. The added floor space of larger homes definitely spells comfort, convenience and family scalability, every additional square foot either comes at a higher price or pushes available options further away from the central regions of a city.
Millennial homebuyers have already made it clear that they prefer affordability coupled with good location over larger-sized homes in the far-flung suburbs. Simultaneously, developers are intent on making their housing projects more pocket-friendly for a higher customer base.
As a result, the top 7 Indian cities collectively saw average apartment sizes shrink by nearly 17% between 2014 and 2018.
After zeroing on a property, buyers need to identify a suitable home loan lender to fulfil their financial needs.
Officially, there are two major lenders in the market – banks (including both public and private banks) and the housing finance companies (HFCs).
To get the best deal, a buyer must select a lender depending on their prevailing interest rates, eligibility criteria, processing fee and other factors.
Both banks and HFCs have their own pros and cons. Here are some advice and guidelines for taking a home loan in India.
Banks vs HFCs: Which is the better option?
Declaring an outright ‘winner’ among the two options is indeed difficult. Earlier, the steep interest rates of HFCs gave banks an edge.
However, now there is a parity between the two as most HFCs offer loans at rates within 8.6%-11.2%, while banks offer loans at 8.3%-10.5%. The gap has significantly reduced and buyers may now consider either option.
Eligibility criteria & process:
Rising NPAs over the past years have compelled banks to follow stricter norms for lending.
To market properties across India to Kenya’s populous & thriving ‘44th tribe’ targeting investments in their homeland
Nairobi, 10 March 2019: India’s leading real estate agency ANAROCK has partnered with Satguru Group for an event to promote investment into Indian real estate by Kenya-based NRIs. This feature-rich event will be held on Sunday, 10th February 2019 in Nairobi.
During the event captioned as ‘Karmbhoomi Se Janambhoomi’, ANAROCK and Satguru Group will showcase attending NRIs with some of the best investment opportunities in India real estate.
The spread of options will encompass all housing formats from apartments and villas to townhouses in both the affordable and premium segments.
Shajai Jacob, CEO – GCC, ANAROCK Property Consultants says, “While there is a constant discussion revolving around NRIs from the Gulf, US, UK and Europe, Kenya-based Indians do not seem to appear on anyone’s radar. This is surprising, given that Kenya-based Indians – though only about 1% of the country’s population, are actually heavily involved in Kenya’s economy. In fact, Indians in Kenya contribute substantially in most of the sectors driving Kenya’s economy and operate countless small and large business enterprises in all of Kenya’s major geographies.
Nearly 60% of women home seekers prefer a property within the budget-range of INR 80 lakh; 52% will opt for ready-to-move-in homes
Women homebuyers benefit from lower stamp duty charges, low home loan interest rates, and tax deductions
Women must now mandatory be either co-owners or sole owners of affordable homes.
There’s a famous saying – the hand that rocks the cradle rules the world. This is so apt today, as women are excelling across sectors and increasingly making their mark in a male-dominated world.
The 21st-century millennial woman is progressive and increasingly financially independent. This had led to a distinct shift in her investment preferences – where gold and fixed deposits were the primary choices for Indian women, real estate now rides high in her investment portfolio.
In fact, in ANAROCK’s consumer sentiment survey, nearly 20% of participants were women. Among the many highlights of this survey – nearly 42% of women respondents preferred real estate as an investment asset class, followed by 30% for FDs and a mere 17% for gold.
ANAROCK Launches Dedicated Operations In Abu Dhabi
To expand next into Oman, Bahrain, Saudi Arabia and Kuwait
More than 50% of NRIs living and working in the UAE have interest in Indian realty; top investment cities are Bangalore, Mumbai, Delhi NCR, Hyderabad, Chennai & Kochi
In ANAROCK’s Consumer Sentiment Survey, NRIs from the GCC countries comprised maximum share with 36% (followed by 23% from Western Europe, 22% in Asia and 19% in North America)
NRI investors have a higher appetite for under-construction properties than resident Indians; higher focus on investment for ROI rather than on end-use
Abu Dhabi, 5 March 2019: Marking the next step on its international expansion agenda, ANAROCK Property Consultants has announced the launch of its dedicated office in Abu Dhabi, the high-profile capital of the United Arab Emirates (UAE).
ANAROCK Abu Dhabi is the Firm’s second operational base in the UAE after launching operations in Dubai in 2017.
“We are in aggressive expansion mode in this key market.
No discussion about Mumbai’s notoriously land-starved real estate market is complete without mentioning the massive tracts of land held by various Government and non-Government agencies and bodies.
Arguably, Mumbai Port Trust (MbPT) is currently one of the largest landowners in the country’s otherwise land-scarce financial capital.
Mumbai Port Trust owns nearly 1,900 acres of commercially useable prime land in South and South-Central Mumbai along the sea-facing eastern coast. If put to good use, this large tract of land can help considerably in solving the city’s immense housing shortage.
Initially either oblivious or indifferent to its real worth, the port authorities have now realized that they sit on a veritable goldmine that can fetch massive capital. However, it is definitely not as easy as it may appear since many are now trying to capitalize on this precious land.
Some existing lessees are refusing to vacate the leased premises – even post expiry of their lease period of 100 years – or even allow the rentals to be hiked to match the current market rates. Others are engaged in long-drawn court cases commissioned by either party.