Anuj Puri – Page 22

Can RERA Rescue ₹4,64,330 Cr of Stuck Housing?

Anuj Puri, Chairman – ANAROCK Property Consultants

Highly-delayed units in MMR and NCR are worth a whopping ₹3,60,000 crore
Hyderabad has least project delays with around 8,900 units worth ₹5,500 crores delayed
Dilutions in RERA make it ineffective in some states

Incessant project delays, dodgy activities of some developers and land litigation issues have plagued the Indian real estate sector over the last several decades, not helping its domestic and international image.

Realizing the significance of real estate on the economy of the country, the Government has, over the last few years, been taking active measures to bring in greater transparency and efficiency.

However, despite the implementation of game-changing policies like RERA and GST, the issue of stalled or delayed projects that has primarily been at the core of buyers’ discontent is yet to be addressed satisfactorily.

If we add up the numbers for the top 7 cities, it emerges that the residential real estate launched in or before 2013 that is stuck in various stages of (non) completion is collectively worth a whopping ₹4,64,300 crore for a total of 5,75,900 units that are yet to be delivered to their respective homebuyers.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Among the top 7 cities, MMR saw most new launches – nearly 13,600 units & highest sales at 15,200 units in Q2 2018
17,220 promoters and 15,550 agents under MahaRERA – highest RERA registration Pan India
Stamp duty increase may be a slight dampener in the short-term

On the back of critical policy reforms like DeMo, RERA and GST, 2018 is seeing both sales and new supply picking up across cities. Interestingly, the Mumbai Metropolitan Region (MMR) leads this trend.

ANAROCK data indicates that out of the total new housing supply of around 50,100 units in Q2 2018 across the top 7 cities, MMR saw the highest number of new launches with nearly 13,600 new units – a 59% increase against the preceding quarter.

In terms of sales too, MMR clocked the maximum housing sales with approximately 15,200 units being sold in Q2 2018 – an increase of 26% against Q1 2018.

MMR’s top 3 micro markets across budget ranges 2017 – Q2 2018:

Affordable Segment (<

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Maharashtra has the most RERA-registered projects with 17,353, UP with 3,950 projects
Serious developer-favouring dilutions impacting demand in many states

More than a year after RERA was formally implemented, we are beginning to see some real impact on the ground. However, the results are still far from scintillating.

Progress so far

Out of all the states and Union Territories in India, Maharashtra takes the first place when it comes to proactive RERA adoption, implementation and integration, followed by Uttar Pradesh, Gujarat, Madhya Pradesh and Karnataka.

As per the latest registration updates, more than 32,306 projects and 23,111 real estate agents have been registered under RERA across states.

Maharashtra has the highest share of registered projects under RERA, accounting for 17,353
Uttar Pradesh has 3,950 projects registered
Gujarat with 3,300 projects registered
Karnataka has 1,982 projects registered
Madhya Pradesh has 1,901 projects registered.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Seasonal swelling, eroded mangroves a major cause of flooding
Cleanup was supposed to start in June ’18

Despite the repeated claims of the Mithi River Development and Protection Authority (MRDPA) to make the river risk and stench-free within the next two years, the progress has been far from satisfactory.

The river continues to be the sewage disposal stream for Mumbaikars, and the clean-up act – promised to start from June 2018 onward – has yet to see the light of the day.

In what could be called a saving grace, the authorities have been successful in preventing 2005-like floods in the city, or else this laxity in the river clean-up would have been embarrassingly highlighted.

The authorities continue to pat themselves on the back for the deepening and widening of the river over the last decade at the cost of a whopping ₹1200 crore, which they claim has helped make the river ‘almost completely safe.’

The fact that it continues to be a toxic cesspool puts a big question mark on the ‘safety’

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

When we reflect on India’s 71 year-long independence in context with real estate, one thought overshadows all others – affordable housing. No nation can call itself truly self-sufficient until there is a roof over every head.

We can talk about increased transparency and efficiency, but this has true relevance only if it is not just the industry that benefits but also the common man.

Embodying this very basic but profound premise, the Modi Government’s election manifesto of providing Housing for all by 2022 definitely rang all the right bells.

Obviously, it boils down to unleashing a massive number of affordable homes, and the Government has certainly gone the extra mile to make that happen. Unfortunately, what we have seen so far is more marketing hype than genuinely affordable housing.

Many developers have climbed on the ‘affordable housing’ bandwagon, but actually the term ‘affordable’ is in most cases just being misused to ostensibly show alignment to the ‘Housing for All’ mission.

Of course, builders have been generously applying terms like ‘affordable’ and ‘luxurious’

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

In the 71 years since India gained independence, the country’s real estate market has changed tremendously.

While it has not always been consumer-favouring throughout this period, it is certainly so today. The country’s cities have expanded, new economic drivers have come in and jobs are being created at all levels.

Likewise, appropriate housing is now being created for all income levels. The current Government has taken the needs of the people to heart and deployed various policy initiatives to ensure that homeownership becomes affordable and desirable.

Like the real estate market itself, the market for housing loans has become very competitive, giving consumers the edge of choice. Moreover, property prices have also rationalized across the country after the Government’s demonetization move late last year.

While it was initially expected that only the resale homes and land markets would be affected, it quickly became evident that the lowered sentiment had percolated in primary sales as well.

Many of the most important changes to positively impact home buyers in India so far have been at the policy level,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The concept of ‘by invitation only’ (BIO) housing projects tends to make Indians’ antennae perk up, and not necessarily from a demand perspective. This is one of those ‘grey’ areas of real estate which carry with them very strong emotional markers.

We’re not taking gated communities here – the acquisition of a property in a gated community rarely depends on anything more than a buyer’s net worth. By invitation only projects clearly exclude a certain segment of buyers, often for reasons other than their lack of purchasing power.

What Is The Market Size for BIO Housing?

This is a very ill-defined segment of housing, which means it cannot be ‘tracked’ in the classical sense of the word. The overall ultra-luxury sector represents about 5-6% of India’s real estate pie.

Any luxury project could be marketed as ‘by invitation only’ – either as a sales gimmick or on the basis of actual selection criteria other than purchasing power. However, BIO projects may not necessarily refer to luxury at all – which makes it even harder to track.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

The 25 bps increase in the repo rate announced in today’s third bi-monthly monetary policy was in line with our expectations. Amidst rising inflation, depreciating rupee and other global macroeconomic risks, this increase is fairly justified.

While this may lead to a hike in home loan rates as well, the overall real estate sector now rests on a strong footing and buying decisions may not be altered by these marginal changes.

As per ANAROCK research, nearly 60,800 units were sold in Q2 2018 across the top 7 cities of India, which is a 24% rise over the previous quarter. Amidst a 50% quarterly rise in new launches in Q2 2018 too, unsold inventory reduced by 2% from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018.

These numbers clearly indicate that the markets are now recovering from the shocks of structural changes and policy reforms. In fact, genuine home buyers have welcomed these actions which have imbibed the much needed financial discipline, accountability and transparency in the sector.

With lucrative deals on the table,

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Miracles have been known to happen when a chequebook lies on the negotiation table

Stamp Duty Shocker

On the real estate market, upward revisions of any kind can doubtlessly hurt. Let’s take the Maharashtra Government’s proposal to levy a surcharge of 1% on stamp duty, effectively raising it to 6% from the existing 5%.

Such news, especially at a time when MMR’s real estate market was beginning to show some green shoots of revival with sales and new supply numbers rising, come as a shock.

This is a significant increase in the cost of real estate purchase that will hamper consumer sentiment – especially in the affordable housing segment.

On the one hand, the Government has rolled out multiple sops to boost affordable housing – and on the other, it is increasing the cost of properties. One can only hope that at least affordable housing is saved from this surcharge.

This is real and painful, and the impact is very hard to mitigate.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

New-age technology and data-driven concepts have significantly influenced asset management in the hotel sector today
Luxury hotel guests expect an international experience wherever they go and country-specific limitations are not accepted

Rising disposable incomes at the hands of the middle class, an increasing number of multi-millionaires and the growing quest to travel have given a major boost to the tourism and hospitality sector in India.

Over the last decade, this sector has accounted for nearly 7.5% of the country’s GDP. It is estimated that the Indian hospitality sector is likely to witness high double-digit annual growth by 2022.

The sector is a major direct and indirect employment generator, attracts massive FDI inflows and is the most important net foreign exchange earner for the country.

Considering its potential, the Government must necessarily incentivize investment into the hospitality sector by lowering the taxes on its development and giving it industry status.

Since it relies on a host of other sectors such as transportation,

Can RERA Rescue ₹4,64,330 Cr of Stuck Housing?

MMR’s Most Vibrant Housing Markets – Affordable To Ultra Luxury

RERA – Still Rare On The Ground

Mumbai’s Mithi River Rejuvenation Misses Deadline – Again

71 Years of Independence – Housing for All by 2022?

How Independent Is Indian Real Estate Today?

Breaking the Myths Of ‘By Invitation Only’ Properties

RBI Monetary Policy Reaction

Increased Property Purchase Costs – Hype Vs. Reality

Luxury Hotels Asset Management – Keeping The Rolls Royce Rolling