CREDAI members to build 352 affordable housing projects across India, to invest Rs 38,000 crore

NEW DELHI: Builders' body Confederation of Real Estate Developers’ Associations of India (Credai) today launched 352 affordable housing projects to be built across India with an investment of Rs 38,003 crore.

The members of Credai aim to build 203,851 low-cost homes, in the price range of Rs 15 lakh to Rs 30 lakh in 53 cities across 17 states in the country.

“I would like to congratulate Credai on the initiative being taken to align the real estate industry with the objective of Housing for All of the Government of India," M Venkaiah Naidu, minister of housing and urban poverty alleviation (HUPA), said while launching the housing projects.

Naidu also assured Credai and its members that his ministry and central nodal agencies like the National Housing Bank and Housing and Urban Development Corporation (Hudco) will extend full cooperation in reaching the benefits prescribed under the Pradhan Mantri Awas Yojna (Urban) to the home buyers of these projects.

Over one lakh units is planned to be built in Maharashtra, 41,921 houses in the National Capital Region, 28,465 in Gujarat, 7,037 in Karnataka and 6,055 in Uttar Pradesh to name a few.

"India has a recorded shortage of 20 million homes and our endeavor is to ensure that we overcome this shortage by placing consumers at the center of all our efforts," said Jaxay Shah, the newly appointed president of Credai.

The builders' body is also in talks with the State Bank of India (SBI) to create special financial package both for home loans and for construction finance.

The government has recently taken several measures to promote the affordable housing segment and also gave it an industry status in the Union Budget this year.

It also extended the credit linked subsidy scheme (CLSS) component of PMAY (Urban) to middle income groups with annual incomes in the range of Rs 12 lakh to Rs 18 lakh under which interest subsidy of 4% and 3% on housing loans will be provided.

With this, home buyers in EWS, LIG and MIG segments with annual incomes up to Rs 18 lakh have been brought under the ambit of PMAY (Urban), opening up substantial investment opportunities for real estate developers.

The ministry of HUPA on its part has approved construction of 1,773,052 affordable houses so far under PMAY (Urban), with an investment of Rs 95,660 crore in 30 states and Union Territories.

A central assistance in the range of Rs 1 lakh to Rs 2.35 lakh will be provided to each beneficiary under PMAY (Urban), which was launched by prime minister Narendra Modi on June 25, 2015.

Source : ET Realty 

Govt to launch 2 lakh affordable housing units on Sunday

NEW DELHI: To give push to the National Mission of Housing for All, urban development and housing minister M Venkaiah Naidu will launch around 2.03 lakh affordable housing units in a function organised by CREDAI (Confederation of Real Estate Developers Associations of India) in Gujarat's Ahmedabad on April 9.

The union government is working hard to promote the affordable housing and is working with private developers and their association.
Various measures have been announced by the government to promote affordable housing and the activities in the construction sector have started showing the result.
The maximum size of these housing units will be 643 sq ft carpet area which is equivalent to around 900 sq feet built up area.
President of CREDAI Getamber Anand, who is also CMD of NCR-based ATS Infrastructure said that the association has decided to assume a major role in involving its members for affordable housing projects.
He said that as the government is promoting affordable housings very aggressively, CREDAI would like to work as a nodal agency to enable the buyers to take the benefits announced by the central government under the Prime Minister Awas Yojana.
MD of Ahmedabad-based Savy Infrastructure Jaxay Shah, who will be appointed president of CREDAI in the Investiture ceremony on April 9 said that with the various measures announced by the central and state governments, the affordable housings will be the main area of activities in times to come.
Shah said that with according infrastructure status will help the developer in securing construction loan at very competitive rates.
Along with this, extending the 80IB benefits which will make the profit earned by a affordable housing project tax free, the prices of affordable housing units will become very competitive.
The prices of the projects a announced are in the range of Rs 12 lakh to Rs 35 lakh depending the cities and locations.
A senior official in the ministry said as the developers are the second most important stakeholder in the housing sector after the buyer, the government has decided to rope them in to distribute the various benefits to the end users.

Source : ET Realty 

RBI OFFERS MULTIPLE INDISCERNIBLE PLUSSES

The financial year 2016 – 17 was a true example of any developing economy which was marked with both ups and downs for the real estate sector.  Where one could see the peak of the sector in the past couple of years during the festive season, suddenly after it, demonetisation crippled the sector to its bottom most for the upcoming two months. But with things like RERA, Smart Cities Mission and Housing for All in the pipeline, the sector is expected to perform better than ever. As one of the highest contributors to the country’s GDP and an end user to over 30 allied industries, very high hopes rest on this sector to perform well in order for the economy to revive. On top of it all, the Reserve Bank would always play a key role in deciding the fate of this sector through its bi – monthly monetary policy reviews.

With today’s decision in the monetary policy review, the Repo rate remains unchanged at 6.25 percent. However, the corridor under the LAF has been narrowed down to 25 basis points which makes the Reverse Repo rate stand at 6.0 percent. This adjustment under the LAF also means that the Marginal Standing Facility (MSF) also stands reduced at 6.5 percent basis the recalibration of MSF difference to 50 basis points above the Reverse Repo rate. Cash Reserve Ration (CRR) at 4 percent and Statutory Liquidity Ratio (SLR)  at 20.5 percent remain unchanged. There are no direct benefits attached for the financial institutions but indirectly they gain a lot with the increase in Reverse Repo and reduction in the MSF, allowing them to lend to RBI at higher rates and enabling overnight borrowing at a lower rate.

Industry Reacts:

Manoj Gaur, President CREDAI-NCR & MD, Gaursons India Ltd.

It is great to see that the Reserve Bank has been so persuasive towards reduced lending rates in the market, especially from the end of Financial Institutions. Increased Reverse Repo rate would mean RBI withdrawing money from the market at a higher rate, hence filling the hands of the banks further. However, it’s on the part of the financial institutions to convert these indirect benefits into something substantial for the end users and promote healthy business environment in the market.

Gaurav Gupta, General Secretary, CREDAI - RNE

A recalibrated MSF standing reduced at 6.5 percent would mean that the overnight borrowing of banks from RBI would come at a lower rate giving a freer hand to banks at lending. However, some direct rate cuts could have been also beneficial in the short term for the realty sector because with the recent data release by RBI which states that HPI has picked up in the last calendar year would have allowed the realty sector to ride on improved sentiments from all corners of the economy.

Vikas Bhasin, MD, Saya Group

Also with global growth indicators showing signs of stronger activity in most of the Advanced Economies and further indicators pointing to a modest improvement in the macroeconomic outlook of the country might have prompted the apex bank to keep a cautious approach towards any major changes in the key rates. However, it was very heartening to see that the RBI has been very accommodative towards reduced lending rates in the market and hence has passed on benefits indirectly to the government allowing them the necessary room to work upon.

Dhiraj Jain, Director, Mahagun Group

In case of a low interest rate environment surrounding the economy and cash available in abundance, the risk of inflation moving up exists. Hence, the RBI doesn’t reduce the rates until it has been fully convinced about the inflation control; as even the inflation had been on a rise for the fifth straight month till February but has taken a downward trend in March which would be kept under strict vigil the next policy review allowing them the necessary cushion to work further on the key rates. Till then, even the financial institutions should also devise ways to offer indirect benefits to borrowers.

Rajesh Goyal, Vice President CREDAI-Western U.P. & MD, RG Group

This is not a surprise move by the RBI as everyone was expecting a stagnant approach towards the key rates. The market has been gaining stability and post the union budget, further ease could have been thought off on the cards. Even though the RBI has not provided any rate cut this time, fresh home loan borrowers should not worry much as they may still witness lowered EMIs because amidst intensifying competition among the lenders, the banks might be forced to start cutting down the interest rates themselves.

DEHRADUN’S REALTY CATCHING UP PACE

       If you are planning to buy a second property, then Dehradun might just be the perfect destination to fulfil your desires. From being a favoured tourist hot spot to a pilgrimage, Dehradun is a good real estate bet that can allow a buyer to not only get a second home residence option, but provide greater returns on investments too. Due to its existing institutional, education and industrial hubs, the infrastructure in the region is ever-expanding; and now with the realty giants stepping up, a big makeover is in progress that will further enhance the attraction quotient of the city.

Even the NRIs have been showing a keen interest in the region, says Avneesh Sood, Director of Eros Group as he adds, “Since the fall of Rupee against the dollar, last couple of years have witnessed a surge in foreign investments in Dehradun and it ranks quite well against other major cities in the country and we expect this investment plan to increase by another 20-25 percent in the next couple of years.” According to a report by Assocham in 2013, Dehradun ranked fifth amongst the top favoured destinations in India by NRIs where Bangalore claimed the first spot.

Realty Map of Dehradun

The city being the capital of Uttrakhand is spread across an area of 3,088 sq. kms. with a population of almost 1.7 million. Apart from this population, there is a strong domestic and international footfall that takes place across Uttrakhand where Dehradun picks up the limelight. According to a data from Ministry of Tourism, total of approx. 2.5 crore Indian tourists visited Uttrakhand in 2015 coupled with over 1 lakh foreign travellers. This footfall has been increasing on an annual basis, highlighting the development of the state and its major cities, where Dehradun is most prominent. These increasing numbers have pushed the developers to come out with residential, commercial and mixed-land use projects across the city. “Hospitality, retail and realty sector and industries gain the most when a region offers a wide variety of options for a tourist. Developed retail and hospitality sites in such regions allows greater footfall that can also enhance the demand for real estate in the long run. Tourism in India has been a strong converter for the realty sector as well where Tier 2 regions gain the most”, avers Prithvi Raj Kasana, MD, Morpheus Group.

Speaking about the popular micro pockets of Dehradun, there are a total of 11 favoured regions by the developers where construction is taking place at a rapid pace and several projects have been already delivered. Descending on the basis of demand of the regions, chart begins with Sahastradhara, followed by Rajpur Road, GMS Road, Mussoorie Road, Haridwar-Dehradun Road, Dalanwala, Nehrugram, Canal Road, Race Course, Jakhan and Chakrata Road.

S. NO.	REGION	CIRCLE RATES(Rs. per sq. mtr.)	AVG. PRICE(Rs.)	UNIT SIZE RANGE(sq. ft.)
1	Sahastradhara	28,200	35 Lakh	550-3,550
2	Rajpur Road	65,000	55 Lakh	475-3,019
3	GMS Road	36,000	40 Lakh	1,120-2,883
4	Mussoorie Road	38,100	40 Lakh	413-3,250
5	Haridwar-Dehradun Road	38,100	40 Lakh	625-3,200
6	Dalanwala	38,100	40 Lakh	631-5,712
7	Nehrugram	28,000	35 Lakh	950-5,100
8	Canal Road	65,000	55 Lakh	1,020-4,030
9	Race Course	38,100	45 Lakh	850-2,620
10	Jakhan	28,000	40 Lakh	970-3,143
11	Chakrata Road	28,200	35 Lakh	845-1,555

“Real estate map of Dehradun offers a wide range of unit sizes available at highly affordable prices which makes it an even better deal for people opting for second property options. Even the property prices observe good appreciation on an annual basis with infrastructure witnessing a major revamp. Due to the residential sales rising in the regions, demand for commercial setups has lead to the supply of retail and office spaces”, says Abhishek Bansal, Executive Director, Pacific Group.

At present, Dehradun offers a total of 157 residential and 6 commercial projects that are in different stages of construction with several projects ready to move in. Amongst the big names, Pacific Group, Supertech, ATS Group, Pushpanjali Builders, Unitech Group, Pearls Infrastructure, Parsvanath, Sikka and others have projects in place.

Demand for housing in Dehradun is a lot different from that of NCR. Obvious reason being, located at hilltop, it doesn’t allow the developers to construct high rises. As per the present building by-laws in the city, a tower can have a maximum of G+9 floors. Thus, the concept of independent or villa living is predominant in Dehradun. Even the current inventory of Dehradun offer more villas than apartments. Highlighting the same, Kushagr Ansal, Director of Ansal Housing explains, “The criteria for development on hilltops is way different from the plains due to the different building by-laws present in those regions and thus, the concept and demand is also different. Duplex and Villa living is more common than apartment style living and thus, projects offered according to the former concept is more prominent in such regions than the latter.”

Infrastructure In Focus

Dehradun has been quite active in terms of developing and upgrading the infrastructure along the micro regions. Speaking about the developed infrastructure, there is a strong presence of hospitality, retail, health, educational institutes, IT parks, administrative setups and strong road and aerial connectivity. For instance, Doon University, Indian Military Academy, IIAE aeronautical college, Forest Research Institute and Institute of Petroleum comprise amongst the educational strongholds in the region. FMCG industry has been the core behind Dehradun’s development with the presence of big brands such as HUL, ITC, PepsiCo India Holdings Pvt. Ltd. and inclusion of Patanjali in 2006. Furthermore, Jolly Grant Airport has been upgraded and shares a strategic connectivity with Dehradun, Hrishikesh and Haridwar, falling within a distance of 25 Kms from each. Also, the existing Helipad in Sahastradhara is under plans to be upgraded into an Airport that will directly cater the city. Dehradun is located nearly 45 Kms from NH 58 and has another National Highway- NH 307 which links it with Chhutmalpur in Uttar Pradesh on NH 344. Also, there are 2 state highways connecting Dehradun with Shimla and Saharanpur via SH 2 and SH 57 respectively. “Long run acceptance and performance of any region is directly dependent on its infrastructure. Tier 2 cities have been well planned and connected with Tier 1 cities, where Uttrakhand and UP presents a classic case of infrastructure driven realty. With so many infra projects in pipeline, National and State Highways offering superior road network, the region’s realty sector will shape up even better few years down the line”, concludes Rakesh Yadav, Chairman, Antriksh India Group. 

Property prices in Gurgaon set to go down on likely 5% cut in circle rates

GURGAON: The long spell of slowdown in the real estate market has prompted the Gurgaon district administration to propose a reduction the circle rates of properties across all segments by 5%, for the financial year 2017-18. If accepted, property prices in Gurgaon are set for a downward correction for the second year in a row. Last year, circle rates were reduced by 10-15% in different parts of the district.

Before that, Gurgaon circle rates had remained unchanged for two consecutive years, 2014-15 and 2015-16, due to the real estate slump. “Gurgaon circle rates haven’t increased in the last four years. This will be the second consecutive year when rates will be reduced, which says a lot about the condition of Gurgaon’s property market,” said Pradeep Mishra, a real estate expert.

Terming the revision as a reflection of prevailing market sentiment, district revenue officer (DRO) Hariom Atri said, “We’ve sent a proposal for revision of circle rates in Gurgaon and are waiting for approval.” He added the proposal was made considering various issues, including the bad shape the sector is in, and that in some areas, circle rates are higher than the market rates.

The circle rate is the minimum value at which sale or transfer of plots, built-up houses, apartments or commercial property can take place. It is the price at which the buyer pays stamp duty to the government while getting a property registered. “A 5% reduction in circle rates will create multiple benefits for consumers and developers, such as relief from high capital gains tax, stamp duty and registration charges,” said Ravish Kapoor, director, Elan Group.

Welcoming the move, president of National Real Estate Developers Council (NAREDCO), Praveen Jain, said, “It will help revive the market. Though circle rates were reduced last year, there still exists a difference between market rate and circle rate in some parts. Due to this, developers face difficulty in selling property, while buyers are shy of buying new property.”

Jain said the government is also facing a dip in revenue from stamp duty due to fall in number of registries. “In areas like Sohna and the city outskirts, circle rate is higher than market rate. For example, market price of land in Sohna is Rs 50,000 per acre, while circle rate is Rs 90,000 per acre,” said Jain, adding the government should standardise circle rates.


Source : ET Realty 

India needs Rs43 trillion of investment in infrastructure over next 5 years: Jaitley

New Delhi: India has a huge unmet need for investment in infrastructure, estimated to the tune of Rs43 trillion or about $646 billion over the next five years. 70% of which will be required in the power, roads and urban infrastructure sectors, finance minister Arun Jaitley said on Saturday.

Speaking at the inauguration of the 2nd annual meeting of New Development Bank by the five member BRICS (Brazil-Russia-India-China-South Africa) countries, Jaitley said in emerging markets and developing economies (EMDEs), the overall growth is picking up, although growth prospects diverge across countries. “But there are newer challenges, most notably a possible shift towards inward-looking policy platforms and protectionism, a sharper than expected tightening in global financial conditions that could interact with balance sheet weaknesses in parts of the euro area and increased geopolitical tensions, including unpredictable economic policy of USA,” he saids.

Amidst the challenges, Jaitley said lie the opportunities with the estimated unmet demand for infrastructure investment in emerging market and developing economies (EMDEs) is gargantuan, estimated at above $1 trillion a year by the World Bank. “Most importantly, the EMDEs need to carry out this huge investment in a sustainable manner. The established MDBs are now capital constrained, and with their over emphasis on processes, are unable to meet this financing challenge. A Bank like the NDB is well poised to step into the void,” he added.

Chinese finance minister Xiao Jie speaking at the event said BRICS countries should work towards reforming the global economic system since voice of the emerging economies that contribute 80% of global growth remains “gravely inadequate” in multilateral institutions.

Jaitley said India has proposed projects worth about $2 billion for NDB funding, which he hopes will be taken up by the Board expeditiously. “We shall work with the NDB to develop a strong shelf of projects in specific areas such as Smart Cities, renewable energy, urban transport, including Metro Railways, clean coal technology, solid waste management and urban water supply,” he added.

In the annual meeting, the five member board of governors will deliberate on Bank’s strategy for the next 5 years, including issues such as the Bank’s capital, loan portfolio and expansion of Membership. “The uniqueness of NDB should lie in faster loan appraisal, a lean organizational structure resulting in lower cost of loans, a variety of financing instruments, including local currency financing, adoption of country system whenever possible and flexibility in responding to the needs of the clients. These are the elements which would make NDB truly a “new” institution, and make it distinct from older MDBs (multilateral development banks),” Jailey said.

Source : Livemint

GST council clears bulk of rules for new tax regime

NEW DELHI: The GST Council cleared the bulk of the rules framework that constitutes the nuts and bolts of the goods and services tax regime, days after the Lok Sabha approved crucial laws related to it.

The quick decision by the GST Council on Friday brightens the chances of the new tax being rolled out from July 1 though industry has stepped up the demand for a September 1start to give it more time for preparation.

The council will take up on May 18-19 the last big remaining task of fitting individual goods into the four tax slabs already decided.

The council approved five rules dealing with registration, refunds, returns, invoice-debit and credit note payments that have been amended in line with changes to the GST laws.

In addition, it approved the draft of four remaining rules out of the total nine.

"Draft rules for input tax credit, valuation, transition and composition scheme have been approved by the council," finance minister Arun Jaitley said after the meeting.

These drafts will be made public so that industry can give inputs and the final draft will be up for approval at the next council meeting to be held on May 18-19 in Srinagar.

The Lok Sabha had on March 29 approved the four GST laws — central GST, integrated-GST, union territory - GST and compensation. These now have to be approved by the Rajya Sabha, which should not pose a problem as these are Money Bills.

The next meeting will also take up the crucial issue of deciding the slabs that goods and services will be slotted into.

The council has finalised a four-tier tax structure of 5%, 12%, 18% and 28%, but the highest rate has been pegged at 40%.

With the next council meeting more than a month away, achieving the deadline may be difficult, experts said.

"Given the fact that the council is meeting next on May 18-19 to finalise these rules and rates would be finalised thereafter, implementing GST from July 1may be extremely difficult for the government," said Pratik Jain, indirect tax leader, PwC. "One could expect that the voices for September 1 implementation would get stronger over the next few days."

MS Mani, senior director, Deloitte Haskins & Sells, concurred with Jain.

"Today's announcement of the draft rules together with the GST legislations approved two days back gives businesses a very short window of three months to prepare," he said. "Since the rates would be known only by end of May, a process-based systematic approach by businesses is the need of the hour."

Source: ET Realty