Anuj Puri – Page 24

India Residential Property: A Recap Of 2017 And Glimpse Into 2018

Anuj Puri, Chairman – ANAROCK Property Consultants

2017 was quite an eventful year for the Indian economy at large, and the real estate sector got more than its usual share of the limelight.

A series of reforms and structural changes tore into the very heart of the industry, affecting a surgical strike at market opacity, unaccounted funds transactions and customer victimization.

The entire real estate fraternity had to re-orient their businesses to sustain in the changing environment.

Already, the real estate sector has shed a massive part of its unorganized and fragmented nature, and the ways and means of doing business in changed for good in 2017.

The incumbent Government maintained a laser focus on changing the fabric of the Indian economy, with direct implications on the real estate industry, by implementing highly impactful reforms:

Cracking down on black money transactions with demonetization
Setting up RERA – a regulator to increase financial discipline, improve transparency and empower property buyers
Introducing GST to boost transparency in taxes and improve business efficiency
Curbing anonymous property transactions and ownership by incisive amendments to the Benami Properties Act

Simultaneously,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The Indian real estate sector evokes a lot of interest from NRI investors.

This interest is driven by long-term fundamentals such as emotional connect, safeguarding retirement plans, better returns and yield on investments, and depreciation in the rupee’s value.

While there are around 30 million NRIs across different countries, investment into Indian real estate is led by NRIs from UAE, USA and Saudi Arabia.

From 2000 to 2014, NRI investments in Indian real estate reached substantial levels ranging between 10-18% annually. However, when the residential market began to slow down in 2015, the NRI investment fervour into this asset class began to cool off a bit.

To top it off, there was a slew of reforms and policy changes such as demonetization, RERA and GST, the combined effect of these being a decrease in NRIs’ investment in the sector.

The highest impact was in the residential real estate market – which, for a long time, was the primary focus of NRI investors with their interest skewing towards apartments and villas, followed by plots and other property typologies.

by Anuj Puri

Anuj Puri – Chairman, Anarock Property Consultants

At a time when technology is disrupting different industries across the world, the consumer-facing property brokerage industry cannot be far behind.

Real estate was among the first marketplaces in India to attract and justify professional brokerage services, and took off in earnest on the back of increasing need to connect renters and homebuyers with relevant suppliers.

Today, the real estate brokerage industry is on its next leg of evolution, leveraging technology as a competitive advantage. Indeed, technology is rapidly becoming the key differentiator for real estate consultants across market segments, especially the residential sector.

Getting ‘real’ – virtually

Let’s take a rather obvious example – that of ‘virtual tours’. Via this tech-enabled medium, real estate consultancies help prospective buyers, renters and investors to visually navigate the interiors of various properties on their computers or smartphones.

True, Indian residential property continues to be a ‘touch-and-feel’ marketplace in which personal site visits are more or less de rigueur.

However, providing customers with a virtual tour of various options,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

NCR has witnessed a 3 to 5% decrease in average per-square-foot property prices over the last one year (Q4 2016 – Q3 2017).

See chart below:

Currently, NCR has the maximum number of unsold units among all the top cities in India. An approximate 2 lakh unsold units are stocked up across different cities in the region. Greater Noida has maximum share of unsold inventory, followed by Gurugram.

There are many reasons for the price decrease in NCR. To begin with, excessive delay in project construction and possession has hurt buyers’ sentiments and led to subdued demand. Also, many projects have been stalled due to agitations and litigation issues.

The massive unsold inventory itself has acted as a sentiment suppressant – and finally, while demonetisation, RERA, and GST are potentially positive moves for the industry, they have played a significant role in reduced buyer sentiment, contributing to the price falls.

Prices are likely to remain stagnant for a few more quarters. Factors such as the huge unsold inventory,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The massive gap of affordable housing has drawn the Government of India’s focused attention and resulted in many initiatives to such housings.

Cognizant of the constantly growing demand for affordable homes across the country, the market has started responding with a significant rise in new launch supply in this segment over the last one year.

On examining the composition of the new launch supply across the top Indian cities in the current year (till Q3 2017), it emerges that affordable housing (units with average ticket sizes below Rs. 40 lakh) clearly leads the pack. It constitutes more than half (52%) of the overall new supply:

The chart below shows the share of newly-launched affordable housing units (< Rs. 40 lakh) during Q1- Q3 2017 across all the top cities.

Bangalore, MMR, NCR, and Pune are close together in terms of volumes, accounting for around 16 to 19% share of units in the sub-40 lakh price bucket.

In MMR, the new launch supply in this segment is led by the Ambernath,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

India has registered a historic improvement in latest ranking for Doing Business, released on 31st October by the World Bank.

In fact, it is one of the top ten improvers for the current year assessment, thanks to the implementation of key reforms pertinent to 8 out of the 10 indicators that World Bank factors in for this index.

With the overall ranking of India in the Ease of Doing Business jumping from the 130th to the 100th place compared to previous assessment, India is the only large country displaying such a significant improvement. How has real estate performed in this improvement? Actually, it’s a bit of a mixed bag.

India’s ranking for Dealing with Construction Permits has improved from 185 to 181, for Resolving Insolvency the improvement has been from 136 to 103, and for Paying Taxes from 172 to 119. However, on the parameter of Registering Property, it slipped 16 places from 138 to 154th.

The key reasons for the lower ranking in for this vital criterion when compared to other counties are the continuing multitude of procedures to follow and therefore more time developers have to spend in pursuing them.

by Anuj Puri

Anuj Puri, Chairman, ANAROCK Property Consultants

We keep hearing of the ‘wait-and-watch’ or ‘fence-sitting’ syndrome on the residential property market, which basically means that a significant number of people who want to buy a home are not doing so.

Property buyers tend to wait and watch rather than buy for two or three reasons. One would be that they are waiting for a ‘price correction’ – a meaningful reduction in the prices developers quote for their properties. Regardless of whether their hopes are realistic or not, this fence-sitting’ dynamic is a definitely a fact.

It is also frequently said that buyers may also be waiting for lower interest rates on home loans. This is only partly true.

While they certainly play a role in overall buyer sentiment, especially in the affordable housing segment, lower interest rates alone are not a sufficiently compelling rationale for aspiring mid-range housing buyers to abandon their ‘wait-and-watch’ mode.

If, however, the lower interest rates coincide with a hard discount or some other money-saving offer, many people will certainly come onto the market with a firm intention to finally buy a home.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

From official acceptance to investment safety, crypto-currencies are nowhere near becoming viable tender to buy real estate in India.

Bitcoin and other cryptocurrencies have been in the news a lot in recent times, often for the wrong reasons, but also because of the massive appreciation Bitcoin has been clocking up.

To top it off, real estate has now been dragged into the Bitcoin controversy, with a handful of projects in some parts of the US and Dubai actually inviting investments via the Bitcoin route.

With the ongoing slump in sales, is it possible that developers in India will offer such an option to prospective buyers as well? Let us take a closer look at this.

We should begin by understanding that the viability of any currency as a means with which to transact in real estate in India obviously depends on whether or not the RBI and Government recognize that currency as valid tender in the country.

So far, that is not the case with Bitcoin.

by Anuj Puri

“That which does not kill us, makes us stronger” – Friedrich Nietzsche

Anuj Puri, Chairman – ANAROCK Property Consultants

Over the past one year, demonetisation has been a buzzword across all Indian industries, but much more so in real estate.

The radical move of banning high-value currency notes, seen as the Government’s surgical strike on black money, has become a landmark event in the history of the Indian economy.

Looking back on Year 1 AD (After Demonetisation), it is plain to see that it has brought significant disruptions into the overall economy – and particularly the real estate sector.

The rolling out of key policy reforms such as the Real Estate (Regulation and Development) Act [RERA] and the Goods and Services Tax [GST] compounded the aftermath effects of demonetization.

Although there was a lot of confusion and uncertainty immediately after demonetization, the shadow of this radical move now appears to be fading.

The long-term effects of demonetization on the real estate sector are aptly summed up by the wise words of the German philosopher,

by Anuj Puri

Maximum City’s real estate triumphs, tribulations and opportunities on the road to future-readiness

Mumbai, 2 November 2017: ANAROCK Property Consultants today released its research report ‘Mumbai Redefined’ in association with ACETECH – the world’s 3rd largest exhibition and Asia’s leading trade fair for architecture, building materials, innovation and design, driven by Economic Times.

The report was unveiled by Maharashtra Chief Minister, Devendra Fadnavis, during the conference at Bombay Exhibition Centre in Goregaon, Mumbai.

Mumbai is in the midst of major ongoing infrastructure upgrades, aimed at making the country’s financial capital more livable and ‘workable’.

India Residential Property: A Recap Of 2017 And Glimpse Into 2018

How NRI Investors View Indian Real Estate Today

The Impact Of Technology On The Future Of Real Estate Consultancy In India

Unsold Inventory Highest in NCR, Lowest in Hyderabad, Chennai, and Bengaluru

Affordable Housing In India: The Game Gets Real

Why Improved Ease of Doing Business Will Boost Real Estate Funding In India

Home Buying Tips: Examining the ‘Wait and Watch’ Syndrome

Will You Buy Real Estate With Bitcoin In India Anytime Soon?

One Year Of Demonetisation: Real Estate Bruised, But More Resilient

ANAROCK Launches Report ‘Mumbai Redefined’ At Economic Times’ ACETECH