Affordable Housing – Page 8

Sohna – From Tourist Destination To Real Estate Hotspot

Prashant Thakur, Head – Research, ANAROCK Property Consultants

Nestled in the foothills of Aravalli – one of the oldest range of folded mountains in India – Sohna was for long a major tourist attraction due to its lakes, hot springs, temples and many places of historical importance.

Located in the southern part of Gurugram, Sohna is also popularly known as ‘South Gurugram’. In the last few decades, Gurugram’s unprecedented economic growth has led to accelerated urbanization and rapid growth in migrant population flocking the city for employment.

Over time, the fast-paced growth in key areas such as MG Road, Udyog Vihar and Cyber City has created a ripple effect and pushed developments towards the western and southern parts of the city. This led to the emergence of new areas such as Golf Course Road, Golf Course Extension Road, Southern Peripheral Road (SPR) and Sohna Road – leading right up to Sohna town.

With proximity to various business centres and industrial clusters, good overall accessibility, affordable prices and planned infrastructure upgrades, Sohna is evolving as a key real estate destination for the working population of Gurugaram and surrounding regions.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

All eyes were on the Finance Minister as he delivered his fifth full Union Budget – the last one before the general elections in 2019.

As expected, the budget turned out to be populist and sounded excessively cautious while the need of the hour was to provide a positive boost to the economy, which is reeling under the pressure of structural changes and policy reforms.

The Budget did not offer any substantial incentives to individual taxpayers, with slabs remaining constant. A change in the standard tax deduction in lieu of transport and medical expenses, which now stands at INR 40,000, was the only gift to the salaried class.

There was no change in tax savings on home loans, nor were the 80C limits raised. While this put paid to any hopes for significantly increased home buying appetite, there were some notable announcements with positive implications for the real estate sector:

The continued push for affordable housing

As many as 51 lakh houses in rural areas are to be built in 2018-19.

by Anuj Puri

Commercial, warehousing the flavours of 2018; affordable housing’s continuing allure

Anuj Puri, Chairman – ANAROCK Property Consultants

Sluggish demand along with bleak returns on investment has dented the previously glowing charisma of Indian residential real estate in the preceding 2 to 3 years.

The cascading effect of demonetization, implementation of RERA and GST further dampened investment traction in this segment in 2017, leading to a decline in average prices between 5 to 7% during the period.

Although the tail-end of 2017 showed some signs of revival in the sector and there was an uptick in sales of ready-to-move-in properties, the multitude of existing challenges will continue to be felt in 2018.

The huge unsold inventory on the market and the possibility of distress sales in the offing will limit the possibilities of any significant price appreciation in near-term.

During the year 2017, PE investments into the residential asset class fell significantly and witnessed a loss of around 25% in overall share compared to the previous year. Also, for the first time in last three years, it lost its #1 position in PE investment share.

by Santhosh Kumar

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Exponential urbanization and tremendous employment opportunities have made NCR one of the fastest-growing regions in the country.

It is the largest urban agglomeration in India, with more than 28 million urban residents (around 7.5% of overall country’s urban population).

The accelerated urbanization and rampant migration of working population from different states have created a tremendous need for affordable housing in NCR – and the requirement keeps growing.

A recent ANAROCK report shows that NCR comes out on top in terms of the number of units added in the affordable housing segment (priced < INR 40 lakh) during the last two years, and accounted for around 26 to 30% of the overall affordable housing segment’s supply across the top Indian cities.

The region’s share of new launches in the affordable segment has grown from a mere 21% in 2012 to 71% in 2017 (up to Q3).

While the entire region possesses the opportunity to shine in this segment, ANAROCK’s report has identified some pockets which qualify as the key destinations for affordable housing projects in NCR.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Every year, the Union Budget presents the Government with an opportunity to tweak the direction that the Indian economy is taking. Sometimes, hard decisions are taken which, while necessary, do not necessarily go down well with Mr Everyman.

At other times, the Union Budget is clearly meant to be a crowd-pleaser. This invariably happens when an incumbent Government is finishing its term and general elections loom, for obvious reasons.

The current Government has done a lot for the Indian real estate industry, even when it was in the form of hard decisions like demonetization and the disruptive but very necessary RERA.

With the hard decisions now taken, the Indian real estate sector fervently hopes that it is at the receiving end of the benevolence implied in a populist budget. This benevolence needs to go beyond improving personal finances and the implied boost to real estate investment appetite.

Despite the Government’s very proactive stance towards cleaning up and regulating the sector, there are still several policy-related pain points where the coming Union Budget can make a decisive difference:

1.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

2017 was an unprecedentedly rough one for the Indian real estate sector with the implementation of RERA, GST, demonetization and several other reforms and initiatives.

The residential market was beset by more policy changes in this single year than in the two preceding decades. The resulting distress signals that this notoriously change-averse sector sent out were loud, though not necessarily clear. However, there were also positive vibrations.

Tuning Into Residential Real Estate’s Distress Signals In 2017

In 2017, the residential property sector saw:

The lowest rate of new project launches in last five years:

2017 witnessed a significant fall in new launches across top 7 cities, which declined by around 45-50% compared to the previous year. While in 2016 the top 7 cities added around 2.4 lakh units, new launches shrunk to only 1.25 lakh units in 2017.

Property prices either stagnating or correcting:

In 2017, due to a massive burden of unsold stock and low demand,

by Anuj Puri

Press Release

ANAROCK Launches Report On Affordable Housing In NCR

Supply-absorption break-up of units priced < INR 20 lakh & between INR 20-40 lakh
Key hotspots, supply as per completion timelines

Delhi, 14 December 2017: ANAROCK Property Consultants today released its definitive research report ‘NCR – An Affordable Housing Goldmine’ at the Delhi leg of Economic Times’ ACETECH – Asia’s leading trade fair for architecture, building materials, innovation and design.

The report pitches the phenomenal expansion and urbanization rate of India’s largest planned region against the real estate industry’s affordable housing response. Intensely data-driven, this study lays bare the opportunities, shortcomings and challenges that Delhi-NCR presents to the real estate sector.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “Affordable housing has once again taken centre-stage in all real estate forum discussion, and deservedly has the undivided attention of all industry stakeholders including developers, investors, customers and the Government. As India’s largest urban agglomeration, Delhi-NCR is extremely important from every perspective –

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

“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

Anuj Puri, Chairman – ANAROCK Property Consultants

‘Infrastructure status’ typically helps to raise long-term funds at low rates and attract significant foreign investments.

The Government’s recent move to grant infrastructure status to the logistics sector is extremely progressive and will to make funding easy and cheap for companies that operate industrial parks, cold chains and warehousing facilities.

With massive investments likely to flow in the logistics sector, the Government’s plan to develop 35 MMLPs to serve as centres for freight aggregation and distribution, multimodal transportation, storage & warehousing and value-added services, is advancing in the right direction.

As per the Government’s notification dated 20th November 2017, logistics infrastructure was included by insertion of a new item in the renamed category of ‘Transport and Logistics’.

Logistics infrastructure includes Multi-Modal Logistics Park (MMLP) comprising Inland Container Depot (ICD) with a minimum investment of INR 50 crore and a minimum area of 10 acres, Cold Chain Facility with a minimum investment of INR 15 crore and a minimum area of 20,000 sq.ft., and/or Warehousing Facility with a minimum investment of INR 25 crore and a minimum area of 1 lakh sq.ft.

Sohna – From Tourist Destination To Real Estate Hotspot

Budget 2018-19: Balanced But Not A Boon For Real Estate

The continued push for affordable housing

Why Residential Real Estate Is A Fading Blip On Private Equity Radars

Emerging Affordable Housing Corridors In NCR

6 Ways The Union Budget 2018-19 Can Bolster India Real Estate

Why 2017 Was The Year Of The Home Buyer In India

The lowest rate of new project launches in last five years:

Property prices either stagnating or correcting:

ANAROCK Launches Report On Affordable Housing In NCR

Affordable Housing In India: The Game Gets Real

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