Affordable Housing – Page 6

Honey, I Shrunk the Flat! Budget Housing Sizes See Most Decline in 5 Years

Anuj Puri, Chairman – ANAROCK Property Consultants

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.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The slash in GST rates to 5% without ITC from the previous 12% with ITC for premium homes, and to 1% minus ITC for affordable homes from the earlier 8%, gives the beleaguered realty sector the much-needed breathing room and will certainly help it maintain some forward momentum in 2019.

Another booster shot given by the government is changing the very definition of the budget-range of affordable housing.

Extending the definition to housing priced within INR 45 lakh is credible. It will make more properties from the premium budget fall into the affordable segment category, and thus benefit buyers in cities like MMR where property prices are exorbitant.

Yet again, the affordable segment has got a major push today and buyers of this segment will benefit immensely. This will certainly cause sales of housing units within this segment to rise to a significant extent. Most players currently have considerable unsold stock within this segment.

ANAROCK data confirms that there are as many as 5.88 lakh under-construction homes lying unsold in the top 7 cities. Of these, 34% are priced below INR 40 lakh alone.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

India continues to strive for a more globally-aligned image for urban living conditions, which is what the Smart Cities mission is really all about.

However, the primary need if India’s housing market is to rank higher on global benchmarks of urban liveability is still a numbers game. Access to quality affordable housing, if ‘quality’ is primarily defined by location, is still a major challenge for most Indian citizens.

The dearth of affordable homes is only widening, with deficit numbers predicted to reach 30 million by 2022. This, despite the fact that the current Government has clearly understood that quality, quantity, availability and affordability of housing are integral drivers for a country’s economic competitiveness.

To be fair, India has ramped up massively on affordable housing, and this segment has been leading the pack in Indian real estate over the past 3 to 4 years.

The massive impetus that the Government has given to the one electoral promise which got the most attention – Housing for All by 2022 – has certainly caused a major sea-change.

Thanks to this impetus,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The interim budget was more or less a vote bank-facing exercise – an electoral pitch that drew attention to past achievements.

Vote-bank directed announcements included benefits to 12-crore small farmers via credit of INR 6k/year directly into their bank accounts, and also to 10 crore labourers by way of direct pension bonanza.

Direct and indirect positives for the real estate sector

Boost to Affordable Homes:

People earning up to 5 lakhs will get a full tax rebate. However, if one invests in specified Government saving schemes then the tax exemption extends to Rs. 6.5 lakhs. This can have good implications for affordable housing, but not really on the mid-income housing.

The Government also extended the benefit of tax exemption for developers by 1 more year, up to 2020 now. This, too, will give a push to the affordable housing segment.

Electricity for all by 2019 could have positive implications by making more far-flung areas liveable and therefore more viable for affordable housing.

The standard deduction for the salaried class was raised from Rs.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Benefits aside, a cut could have been a major setback to the affordable housing segment
GST rate cut, clarity on / abolition of ITC – boosted demand vs. actual sales

After much anticipation, the GST Council has failed to deliver a final verdict on GST applicable on real estate – but how much would it really have mattered?

Here’s a Utopian vision – the government would announce a GST rate cut, homebuyers would cheer up since prices would reduce marginally, and the market revives. Really?

The biggest paradox in Indian real estate is that numbers suggest a massive burden of unsold housing stock in the midst of a chronic shortage of housing. As long as prices don’t reduce significantly, the housing shortage will only widen regardless of tax sops.

What we have today is a nation of aspiring homebuyers, many of which are perpetually on the fence, waiting for a slew of minor policy windfalls to cumulatively make a home purchase feasible and attractive.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

If you are looking to buy a property or have already invested in one, you will know that there are tax implications involved. Let’s first examine the tax on property purchase and then elaborate on how one can save on it via tax exemptions and deductions.

To begin with, the taxation on property purchase has become much simpler than it was before. With the roll-out of GST, all taxes previously applicable on real estate purchase (VAT, Service Tax etc.) have been subsumed under this single unified tax system.

The overall costs involved in buying a property are broadly divided into two components – the first being the one paid to the builder/seller and other – the statutory and legal costs – to the government.

While the former roughly comprises 80-85% of the overall property cost, the remaining 15-20% goes as taxes to the government coffers.

So, are the taxes same for both under construction and ready-to-move-in properties? The answer is ‘No.’

Taxes for Under-Construction Properties

Statutory and legal costs for under-construction properties vary between 15-20%,

by Anuj Puri

New housing supply estimated at 1,93,600 units by 2018 end; an annual increase of 32%
Housing sales in 2018 estimated at 2,45,500 units; an annual increase of 16%
NBFC crisis holds sector at gunpoint as 2019 begins

Anuj Puri, Chairman – ANAROCK Property Consultants

The year 2018 was a veritable roller-coaster ride for Indian real estate. Despite signs of recovery across segments, the liquidity crunch – further exacerbated by the NBFC crisis – put all industry stakeholders on tenterhooks.

Consolidation via mergers and acquisitions was rife in all sectors, completely redefining the concept of ‘financial health’ among players and drawing clear lines on who will survive the heat. This process will continue throughout 2019, as well.

Despite all odds, economic indicators remained positive with India’s GDP growth rate pegged at 7.3% in 2018. CPI inflation, a major concern in the past, remained reined in at a manageable 4.8%.

GDP growth and contained inflation are generally considered panacea for most real estate woes. However, it took a lot more than that for real estate to retain even a semblance of an even keel in 2018.

by Prashant Thakur

Luxury supply increased by 29% since 2017
Of 12,090 units new luxury supply in 2018, MMR launched nearly 6,310
NCR – 2,650, Hyderabad – 1,585, Kolkata – 160; Pune saw least supply with less than 100 units

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Catering to a very niche clientele and not the masses, luxury housing has evolved at a rapid pace in India. The nouveau riche (newly rich) prefer discreet opulence over the commonplace, and look for experiential luxury, both at a unit and project level.

From start-up founders to high-salaried professionals, high net-worth individuals are prompting developers who understand the luxury segment to think increasingly out of the box and deliver something unique and aspirational.

On the ‘other side of the fence’, affordable housing has taken centre-stage in India over the past 3-4 years, not only because of the massive demand for it but also due to the concerted efforts by the Government to cater to it. Against such a backdrop, there are rising speculations that luxury housing is losing its sheen to the affordable segment.

by Anuj Puri

MMR, Pune, Bengaluru & Chennai accounted for 76% of the new supply
MMR saw max. jump in buys with 16% increase, NCR & Hyderabad lowest with 2% increase
Overall unsold housing inventory reduced by 2%

As anticipated, the real estate market across the top 7 cities in Q3 2018 stayed subdued. The quarter saw a meagre 3% increase in the overall fresh housing supply as against the preceding quarter.

These new launches were largely dominated by the lower-budget segment (< Rs. 40 lakh) with nearly 42% of the total new supply. 33% launches were in the mid segment (Rs. 40-80 lakh) and the remaining 25% in the luxury and ultra-luxury segments.

The third quarter of the year is usually a lull period due to the 15-day shraddh period, which is considered inauspicious for buying property. Consequently, builders keep new projects on hold for the ensuing festive season beginning early October.

In terms of purchases, there was a slight increase of 9% during the Q3 as compared to Q2 2018 across the top 7 cities of India.

by Arun Chitnis

51% home buyers seek rental income, 39% prefer affordable housing

39% prefer to invest in housing priced below ₹40 Lakh
68% seek property for end-use; 52% favour compact 2BHKs
51% of investors focused on rental returns

As many as 81% of polled aspiring homebuyers acknowledge Indian real estate’s improved and improving transparency, discipline and accountability post implementation of regulatory policies, reveals ANAROCK Property Consultants’ ‘Real Estate Consumer Outlook: H2 2018’.

Commenting on the survey, Anuj Puri, Chairman – ANAROCK Property Consultants says, “With the now discernible impact of RERA, DeMo and GST, housing sales are seeing an upward trajectory in 2018 q-o-q. New launches have also gone up this year with affordable housing witnessing significant growth. NRIs see India’s rebooted real estate market environment conducive enough to justify property investments, especially on the back of the depreciating rupee.”

Nearly 69% of prospective buyers are looking to buy property for end-use
84% are looking for homes which are either ready-to-move-in or slated to complete in the next 6 months.

Honey, I Shrunk the Flat! Budget Housing Sizes See Most Decline in 5 Years

GST Rates Cut, Affordable Housing Redefined

Why Is Affordable Housing In India Restricted To The Peripheries?

Interim Budget 2019: Affordable Housing Gains Amidst High Electoral Pitch

GST on Real Estate Maintains Status Quo

Taxes on Property Purchase – And How to Save On Them

The Highs And Lows Of Indian Real Estate In 2018

Is Luxury Housing Losing the Plot To Affordable Housing?

Q3 2018 – 3% Rise In New Housing Launches, 9% Jump In Buys: ANAROCK

Real Estate Consumer Outlook – H2 2018