Author: Anuj Puri

Anuj Puri is Chairman, ANAROCK Property Consultants. He has over 30 years of experience in multi-disciplinary advisory and transactions ranging from real estate to social development projects. Expertise in planning, undertaking demand assessment studies and transaction services including marketing strategies based on technical real estate market analysis, feasibility studies, program requirement derivation and fund and investor sourcing.

RBI Cuts Key Lending Rate – But Will Real Estate Benefit?

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

As widely anticipated, RBI has once again reduced its key lending rate by 25 basis point. The lending rate now stands at 5.75, and this is the third consecutive rate cut since February 2019.

Even though the Indian economy is perceived to be in the grips of a slowdown, the markets are quite bullish on Modi’s return to power with a thumping majority.

This may eventually lead to mitigated risks in fiscal deficit – in all likelihood, it is sensing this that the RBI has made this rate cut.

As for the housing sector, this rate cut may send only send out positive notional signals – its real gain can be realised only if banks pass on the benefits to actual homebuyer borrowers.

The apex bank will need to ensure that this actually happens at the ground level since there has been little evidence of such transmissions in the recent past.

In the current scenario bereft with rising NPAs and the ongoing NBFC crisis, things look quite bleak at the moment.

The reason why most banks are not really able to pass on the benefits of RBI’s rate cuts is that their deposit rates are still very high.

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NRIs Seeking Home Loans In India – A Checklist

by Anuj Puri

Shajai Jacob, CEO – GCC (Middle East) – ANAROCK Property Consultants

Just like resident Indians, NRIs can invest in any number of properties in India and are also eligible to avail of home loans for as many properties as they like.

Of course, while there is no cap on the number of properties for which an NRI can take home loans for, repayment capacity must always be factored in.

Over-leveraging is never a good idea and regardless of what viewpoint a bank takes, NRIs must do their own repayment capacity calculations.

In India, most banks and non-banking financial institutions offer home loans to NRIs. However, the tenure of the home loan may vary, and the rate of interest is usually higher for NRIs.

Loan Tenure and Rate of Interest

An NRI usually has to pay a higher rate of interest than resident Indians. The tenure for a home loan to an NRI usually ranges between 5 to 20 years – only in select cases can it go up to 30 years for salaried professionals.

Most banks determine the loan amount eligibility of NRI borrowers based on their income and credit history.

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Tier 2 And 3 Cities Are The New Draws For Over 25% Real Estate Investors In India

by Anuj Puri
  • Ahmedabad, Jaipur, Chandigarh, Nashik & Kochi top favourite among Tier 2 & 3 destinations
  • Bangalore 2nd-most preferred investment destination with 21% votes in favour, followed by Pune with 18%
  • For over 30% NRIs, Bangalore is the hot favourite investment hub
  • Low property prices coupled with improved infrastructure facilities in Tier 2 & 3 cities the primary investment magnets

Anuj Puri, Chairman – ANAROCK Property Consultants

The quintessential Indian’s yen for investing in real estate continues. The latest data vouchsafes the visible return of investor sentiment for real estate, and the enthusiasm is not limited to traditional property hotspots of the big cities.

ANAROCK’s recent second edition of its Consumer Sentiment Survey confirms that investors are equally – if not more – upbeat on the prospects that India’s Tier 2 & 3 cities offer.

Lack of affordability in the larger cities is the primary hurdle to the largest investor base, and property investors are now looking at smaller towns and cities.

However, their increasing bullishness on Tier 2 &

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India Real Estate Welcomes Modi 2.0

by Anuj Puri

Can the real estate industry’s strongest champion to date finish what he started?

Anuj Puri, Chairman – ANAROCK Property Consultants

Billions of Indians have given their verdict and the real estate sector has every reason to cheer. After all, the sector got the maximum policy-related attention during this government’s first tenure.

In retrospect, Modi’s victory in 2014 ushered in a new era of Indian real estate, unambiguously marked by his vision to set the ‘house’ in order.

He tightened the Centre’s grip on real estate – the favourite ‘laundromat’ for black money hoarders – and brought speculative activity to an all-time low even as big-bang schemes benefited genuine homebuyers and long-term investors.

His government gave a decisive impetus to all-around infrastructure development, major policy overhauls such as DeMo, RERA and GST, amended old Acts like Insolvency & Bankruptcy Code and the Benami Transactions (Prohibition) Act, and envisioned schemes like 100 Smart Cities, Housing for All by 2022, Make in India, AMRUT Cities etc.

Historically, no other government has done as much for the real estate sector. In just one tenure, Modi set the stage for Indian real estate to flourish in the long-term.

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Co-Living: The New Star of Indian Rental Housing

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Co-living, like car-pooling and co-working, is the result of demand for more evolved rental housing solutions coming from millennials, students and young working professionals whose choices differ vastly from those of previous generations.

Currently, this new accommodation option is most popular with young and unmarried millennials aged anywhere between 20-30 years. Professionals who don’t live with their families in the city of work are also considering this option.

Co-living provides such individuals with a way to circumvent the isolation and loneliness that is often integral to a hectic, driven urban experience.

While the primary demand for co-living spaces currently comes from such tenants, the concept itself is a lot more ‘accommodating’. In fact, the future may very possibly see demand for co-living solutions coming single seniors, as well.

Cities such as Pune, Bengaluru, Gurgaon, and Mumbai first saw this new concept emerge in force, and it is now also taking root in smaller cities such as Lucknow and Jaipur – basically, in cities with a large student and millennial workforce population.

So, How Is Co-Living Different?

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Will India Housing Sector Return To Favour With PE Firms?

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Inarguably, the Indian real estate vertical that in the direst need of funding is the residential sector. In a perfect world, the private equity that is now pouring into the country’s realty sector would focus on where it is needed the most.

However, PE firms have their own investment rationale, and Indian residential real estate has been far from attractive to them.

There are sound reasons for this. The Indian residential sector has been hounded by multiple problems for the last 3 to 4 years. These include the issue of stalled/delayed projects, liquidity crunch, and high property values despite weakened demand and slow sales.

The country’s housing market has also seen the highest impact of policy-induced disruptions. Given the fact that the housing market was tainted by malpractices and lack of customer-centricity by developers, the Government had to step in with policy interventions squarely aimed at cleaning up the sector.

The inevitable fallout of demonetization (DeMo) on an industry which was ‘thriving’ on black money aside:

  • The long-pending enactment of the Real Estate Regulation Act (RERA) drew clear regulatory lines for the housing market –

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2 Years of RERA – Project and Broker Registrations Rise Across States

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

  • Maharashtra still leads with 20,718 projects & about 19,699 RERA-registered real estate agents
  • Gujarat comes second – 5,317 RERA-registered projects & 899 registered agents and agencies
  • Karnataka – 2530 projects & about 1342 RERA-registered real estate agents; Andhra Pradesh – 307 RERA-registered projects
  • West Bengal the only state with its own real estate law WBHIRA

It’s been two years since the deployment of the Real Estate Regulatory Authority (RERA) across the country and the Centre’s aim to enforce it in each state is gathering visible momentum.

Even the north-eastern states including Manipur, Meghalaya, Mizoram, Nagaland, and Sikkim – which earlier shied away from it – have agreed to officially notify RERA rules soon.

West Bengal is the only state which notified its own real estate law under West Bengal Housing Industry Regulatory Authority (WBHIRA).

It may be recalled that RERA intended to cover developers as well as real estate agents seamlessly across the country.

As it stands now, 

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Private Equity Still Votes For Commercial Real Estate

by Anuj Puri
  • The commercial segment saw a total PE inflow of nearly USD 2.8 bn in 2018 – up from USD 2.20 bn in 2017
  • Office yields are 12-14% PA, rental yields for housing 2.5-3.5%
  • Residential revival depends on returning investor interest

 Anuj Puri, Chairman – ANAROCK Property Consultants

If the prolonged slowdown in the residential was not bad enough, to begin with, major policy overhauls over the last five years – DeMo, RERA, GST, amendments in the Benami Transactions Act etc. – literally paralysed the residential segment.

While any policy change brings with it some amount of teething pains, the residential segment took a prolonged hit because it had attracted the bulk of black money in the sector. Commercial real estate was far less affected, if at all.

Residential was also far less organized than the commercial office segment. Largely driven by IT/ITeS and BFSI sectors, the commercial real estate segment has been quite transparent and predictable – the primary criteria for foreign investors’ confidence.

Commercial Vs.

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Post-Election Inheritance Of 5.6 Lakh Stuck Housing In Top 7 Cities

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

  • ₹4,51,750 Cr worth housing currently stuck in various stages of non-completion across top 7 cities
  • MMR and NCR together hold 72% share of delayed projects worth INR 3,49,010, Cr; South cities collectively hold a mere 10% overall share
  • Chennai has the least stuck stock with 8,650 units worth INR 5,620 Cr
  • Bengaluru far better off than Pune with less than half of the delayed stock of 86,700 units

If there is one ‘inheritance’ that the Government in power post the upcoming elections will not look forward to, it is tackling the issue of the massive burden of stuck housing across the top Indian cities.

Despite the setting up of a regulatory mechanism, countless homebuyers have been left in the lurch by their builders. Sadly, most of these stuck projects do not fall within the RERA ambit as they were launched years before it was implemented.

Also, with many states having diluted the Centre’s original RERA rules, homebuyers have only the courts to approach – a notoriously tedious task in India.

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