Renting Instead of Buying a Home? Here’s How To Get It Right

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

Don’t expect all available options to be available online
The ‘hidden’ costs of renting a home
The elements of a sound rental agreement

The Government’s much-touted aim to deliver Housing for All by 2022 may not have met with spectacular success in terms of on-ground deployment, but it was certainly a very effective electoral promise. Housing is a sensitive subject in India, precisely because so many people don’t have it. Such an electoral promise was bound to draw attention – and hope.

Providing a self-owned home to every Indian household in the promised timeline seems unlikely. Building enough dedicated rental housing and backing it with a sound rental housing policy could have brought this electoral promise closer to its goal. However, there has been little progress on this front beyond the discussion stage, either.

While a large number of Indians do hope to live in self-owned homes someday, renting homes is still the default option for many. For some, rental housing is seen as a temporary measure until the dream of homeownership is fulfilled.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

A possible GST rate cut at the very beginning of 2019 could bring in the much-needed respite for the Indian residential sector, which is still reeling from reformatory changes.

Though ANAROCK data indicates that sales numbers picked up by nearly 16% in 2018, sales are still far from their peak levels.

The ongoing 12% GST rate levied on under-construction properties has proved to be a major deterrent for homebuyers, who understandably shied away from this added burden on their finances.

ANAROCK’s consumer sentiment survey also confirms that the prevailing GST rate has prevented as many as 49% of property seekers from buying under-construction homes liable for GST. They preferred ready-to-move-in homes that were exempt from this tax.

To attract home buyers and kick-start a more convincing revival of the residential sector, the GST Council is now considering reducing the GST rate for under-construction homes during its next meet in January 2019.

In fact, this move was expected in December 2018; nevertheless implemented, it will be a perfect New Year bonanza for millions of aspiring homebuyers looking to buy under-construction homes in the coming year.

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 Arun Chitnis

New IT, Electronics Policy To Drive West Bengal Housing Demand – ANAROCK Report

Services is the fastest-growing sector with 15.6% growth in 2017-18
Housing prices declined in Q4 2016 after DeMo, but recovered within 4 quarters to register positive growth.

Kolkata, 28 November 2018: West Bengal’s new IT policy to disseminate the IT-ITeS activities across the state for the benefit of the population in the fringe and rural areas.

This will be a game-changer for the state’s real estate market as well as its larger economy. This is one of the many highlights of the report ‘Kolkata: The East’s Icon of Balanced Growth‘ by knowledge partners ANAROCK at CREDAI StateCon today.

The report emphasises West Bengal’s aim to spread the reach of IT/ITeS across the state will help replicate the success of Eastern Kolkata in other parts of the state.

Anuj Puri, Chairman – ANAROCK Property Consultants says, “While West Bengal’s real estate market has witnessed only marginal capital values appreciation since 2015, some significant reforms by the State Government have infused a fresh spark into it.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

Co-working and car-pooling have become viable options for the millennial workforce, and an exciting new trend – co-living – is also beginning to make its mark with the burgeoning student population across Indian cities.

While it is largely the major cities like Bengaluru, Mumbai, Gurgaon and Pune that began promoting this concept, the demand for co-living spaces is also gradually percolating into tier 2 cities like Jaipur and Lucknow where both working millennials and students are increasingly opting for co-living spaces.

Co-living is much more than a mere bed-and-breakfast deal. These are fully-furnished homes where the privacy of tenants is respected. Private bedrooms with access to common shared areas like the kitchen and living room are the norm.

Such spaces offer convenience and an entirely new lifestyle for young professionals – most often bachelors and singles – who are not keen to change cities because of their work.

Their main concern is finding the right accommodation. For them, co-living is an ideal solution, and conventional paying guest facilities and hostels are gradually giving way to this more sophisticated way of living in a less inhibited and restrictive environment with ample opportunities to mingle.

by Santhosh Kumar

Developers should not replicate another Yamuna Expressway story

Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants

The inauguration of the much-awaited Kundli-Manesar-Palwal Expressway comes at a time when NCR residential real estate needs some serious booster shots to up its flagging game.

And, of course, any infrastructure initiative of such a scale always gets touted to be a game-changer for the real estate market of the concerned areas and regions.

The Indubitable Up-side

The peripheral realty markets of Gurugram and Delhi will benefit immensely from the opening up of this Expressway.

It will not only ease traffic but also create more demand for housing and most other real estate assets, including warehousing and logistics. Other than these, cities like Sonepat, Kundli, Manesar and Faridabad are also likely to see a boost in demand.

One of the immediate impacts of this mega infra project will be enhanced economic activity in areas along the Expressway. For instance, areas north of Delhi that had already become hubs for logistics and warehousing are likely to see spiked industrial investments in various sectors.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

So far, there have been no answers – only more questions

Mumbai’s Dharavi, one of the largest slums in Asia, has been an area of contention for almost two decades now.

For all its revelations, the recent blockbuster film ‘Kaala‘ only underscored what Mumbaikars, human rights activists, urban planners and real estate developers have known for decades – there is no simple formula for unravelling the complex Dharavi equation.

Occupying 535 acres of prime land in the very heart of India’s financial capital, Dharavi could be a motherlode of pure gold for developers who could get a piece of it.

Formal housing developments there would also give innumerable Mumbaikars exactly what they need – homes in the heart of the city and within a short commute to some of Mumbai’s most important workplace hubs.

Not surprisingly, the Maharashtra State Government has been eager to redevelop Dharavi. Building affordable to mid-range housing projects here would completely reinvent the residential real estate equation of Central Mumbai and also make a major contribution to the Central Government’s Housing for All by 2022 target.

by Anuj Puri

Anuj Puri, Chairman – ANAROCK Property Consultants

It is still too early to provide hard numbers of 2018 festive season’s property sales numbers as it is yet to conclude. Also, sales numbers are usually collated by the end of the fourth quarter.

However, trends in recent years suggest that the entire fourth quarter of the calendar year is seen as an auspicious time wherein housing sales rise. Considering the q-o-q trends in 2018, sales numbers have increased across the major cities.

For instance, housing sales in Q3 2018 increased by 9% as against the preceding quarter. In comparison to Q3 2017, sales increased by 15% in a year across the top 7 cities.

If we go by these numbers and look at the current scenario, we can expect sales to go up by 9-12% in Q4 2018 (the festive season quarter) as against Q3 2018. However, the ongoing liquidity crisis in Indian real estate could, to come extent, play spoilsport for developers this festive season.

While sales numbers have been increasing q-o-q, there is no significant change noted in the number of inquiries seen during this festive season so far.

Renting Instead of Buying a Home? Here’s How To Get It Right

GST Rate Cut in 2019 – A New Year Gift for Homebuyers?

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?

New IT, Electronics Policy To Drive West Bengal Housing Demand – ANAROCK Report

Co-Living Spaces In India: Rental Housing With A Progressive Twist

KMP Expressway, NCR – Caution, Work in Progress!

Is There Any Hope For Dharavi?

How Real Estate Fared in Festive Season 2018