Developers demand infra status for realty sector

Delhi/NCR

The real estate sector should be given infrastructure status along with other tax benefits, so that it attracts investments and construction activities increase, Credai (The Confederation of Real Estate Developers Associations of India) said.

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At present, despite the fact that the sector is the second largest employer after agriculture, in the unorganized sector, it does not enjoy any status and, consequently, banks are reluctant to give loans to developers for construction activities.

Because of this, unless a developer sells at least 70% of a project, they cannot start construction, which leads to delay in the completion of projects.

Getamber Anand, national president of Credai, said, "Development of an integrated township and group-housing development on more than 10 acres should be given infrastructure status." Anand says that any project involving a provision for construction of roads, water-supply system, water-treatment plant, sanitation, and sewerage systems and solid waste treatment and management systems should be treated as an infrastructure project by the government for all purposes.

To incentivize housing development, infrastructure activities should be included in Section 80IA of the Income Tax Act, which would make the profit from these activities tax free.

After purchasing agricultural land, these companies create most of the infrastructural facilities and only then does the raw land gets converted into developed land, fit for construction of buildings for residential and commercial purposes.

Parveen Jain, president of Naredco (National Real Estate Development Council), said: "The denial of industry status for funding purposes to the real estate sector has created a huge problem. The situation has worsened in the present situation of financial crunch and slowdown in demand."

Source -  Times Property, The Times of India, Delhi/NCR

Demand for homes on uptrend around Tumkur Road belt

Bangalore

Many locations here are witnessing a rise in residential property options and support civic infrastructure, leading to more demand for homes.

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Tumkur Road, the arterial road linking Tumakuru to Bengaluru, is the belt that houses the largest industrial cluster in the city at Peenya. An easy commute to the airport, the up-gradation of the highway, the currently-operational 10 km Metro Rail line and the development of Rajajinagar into a premium residential neighbourhood are leading to a change in the real estate profile of locations along Tumkur Road. Several residential projects and star hotels have come up here.

A S Sivaramakrishnan, Head Residential Services, CBRE South Asia, says, "This micro-market forms one of the main entry points into Bengaluru. The infrastructure in this area is well-developed in terms of connectivity to other parts of the city. Some of the infrastructure highlights of this locality are a functional Metro link running up to Nagasandra, an elevated flyover, the Yeshwantpur Railway Station and enhanced connectivity through the NICE Road. Residential real estate development began recently in this neighbourhood."

Metro-led growth

The Metro, as with Kanakapura Road, is having a significant impact here, leading to a turnaround in the way these traditionally-industrial locations are now being perceived by buyers. Ayub Khan, Proprietor, Apex Estates and Properties, says, "The Metro has made a huge difference to this area. The locations of Yeshwantpur and Peenya located on this road were, until recently, considered industrial zones with not much scope for residential growth. The Metro has changed that and so has the elevated flyover. A mall in the first integrated development in this belt has also become a major attraction in this area. There are many high-end apartments coming up on this road which are being sold from Rs 1.50 to 3.50 crores."

The Metro line, presently operational up to Nagasandra, will be extended up to the Bangalore International Exhibition Centre (BIEC) in Phase II, easing access towards Nelamangala. The transformation of Tumakuru into a 'smart city' is also expected to promote development on the stretch of the Tumkur Road extending into Bengaluru.

Source - TOI

Demand for flats in mid segment shows an uptick

Bangalor - Till some time ago, properties priced at over Rs 1 crore sold like hot cakes in Bengaluru. But a weak economy and subdued real estate sentiment have reduced the demand for such properties. People are trading down, making do with smaller apartments at lower costs. 

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Consequently, developers are seeing action in the mid-segment - apartments priced between Rs 40 lakh and Rs 80 lakh, with areas ranging between 850 sqft and 1,600 sqft.

Khushru Jijina, MD of Piramal Fund Management, which invests in residential developers in Bengaluru, says demand for houses still exists provided the developers price the products appropriately based on the location. "A builder can still sell 15 apartments priced at Rs 75 lakh each every month in Whitefield, Sarjapur or Hebbal; but if it is a Rs 2-crore apartment in the same areas, he will probably sell four units as sales have slowed in that category," he notes.

Rajni Mishra, chief general manager of the State Bank of India says, said the demand for home loans is being primarily driven by houses in the Rs 50 lakh-Rs 80 lakh range. "The segment is growing by about 23% (a year)."

Property developer Salarpuria Sattva Group's MD Bijay Agarwal says apartments in this segment now constitute about 40% of the group's revenues, up from 25% two years ago. Demand for the premium segment (above Rs 1 crore) is down 15-20%.

Premium housing company Sobha Developers forayed into the Rs 35 lakh-Rs 65 lakh segment earlier this year with a massive project near Varthur. The project consists of 650 sqft, 1 BHK units and 1,000 sqft-1,200 sqft, 2 BHK units. The company says it has already sold more than 1,000 units, or 50% of the apartments in phase I. "We hope to do better volumes through this project as this year has been tougher than the last," Sobha MD J C Sharma says.

Realty firm Unishire, whose apartments are priced from Rs 45 lakh to Rs 4 crore, reveals that 70% of its demand comes from the mid-segment. MD Pratik Mehta says the company sells about 30 units a month now, up from 20-22 that it sold six months ago.

Farook Mahmood of property consultancy Silverline Realty says the demand for the mid-segment is up about 20% now, compared to earlier this year.

Real estate industry body Credai Bengaluru's secretary Suresh Hari expects this segment to be the main driving force over the next two years. "IT people in the city are first-time buyers, and their salary increase has not been consistent with the rise in inflation."

Ashish Puravankara, MD of Puravankara Projects says customers are still waiting for interest rates to come down.

Sharma of Sobha, however, believes it's a matter of time before the premium segment gains strength. "Indians in general prefer bigger, 3BHK apartments. Affordability is there, but the sentiment is low now. Once the property sector rebounds, demand for the premium category is sure to go up." 

Source - TOI

Understanding the pent-up demand in Pune market

Pune developers are more organised and professional in understanding the pent-up demand in the market before launching a new project.

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When the organised real estate was in its infancy, developers from across the country were flocking to research agencies and independent property consultants for market feasibility study before launching a new project. The market boom, however, changed the demand and supply dynamics and the developer's gut feeling overtook all rational cost and benefit analyses.

Such high was the demand and absorption then that there was practically no need to define the demand in any of the eight top cities of India. However, the market slowdown taught everyone a lesson that it takes a lot to get a housing project absorbed than just the catchment area having economic activity.

What, then, makes Pune a market that has been witness to one of the best absorption rates in the country even today? Has it defined the demand in a scientific manner? Are Pune developers still going for market feasibility study to understand their core market?

A closer look at the Pune property market indicates the developers are more organised and professional in understanding the Pent-Up Demand in the market before launching a new project. Hence, the supply has never been ahead of or late than the demand. As a matter of fact, they are even open to change the plans if the study of the market suggests so.

In March this year, one of the developers in the city scrapped his project to come out with a new plan and layout. It made many of the critics reach the conclusion that the developer had been confused with his initial project. However, the developer's action was based on the recommendation of a research agency that did on-ground feasibility study in the wake of slowdown. He was hence backed with a research that indicated the slowdown has led to change in the consumption pattern of the given market. The developer then decided to restructure his project so that it could be absorbed in the market, instead of adding up to the inventory.

Requesting not to be quoted, the developer says, "What is the point of creating an inventory of premium housing when the current market demand in the catchment area is for affordable housing? Yes, the research came as a shock to me since I could not read the pulse of the market. However, I immediately offered my existing buyers to either switch to the new project or get the refund with interest rate applicable. Most of the buyers understood the method in this madness and switched for bigger apartments with the same payment."

This raises a fundamental question as to whether there could ever be a housing bubble in the city property market when the demand and supply cycle is by and large backed by research. After all, it is not the developer,s gut feeling but the ground realities that is defining demand in the city. Will Pune continue to be a leading city in terms of absorption of housing units?

Arvind Jain, managing di rector, Pride Group, maintains that in Pune there is no danger of formation of any bubble that could eventually burst. Sufficient demand for all types of housing drives Pune's real estate market. According to him, cities like Mumbai and Gurgaon are legendary for getting over-heated. Pune, on the other hand, has been experiencing a healthy growth and not speculator driven price inflation. Thanks to better land availability and the fact that the city is still expanding, Pune's property market is kept rational by a constant influx of supply in its new real estate destinations.

"Pune was also one of the first cities to deliver convincingly on the real estate format of the future namely townships. Many of these townships are located close to Pune's thriving Information Technology hubs, which spawn y hubs, which spawn the greatest demand for such offerings. While Pune's first integrated township Magarpatta City cre ated its own ITITeS hub, many others are located close to the Hinjewadi IT Park. In other words, Pune's developers have not only ensured that they do not create an oversupply, but have also concentrated on delivering the right kind of supply," says Jain.

Manju Yagnik, vice chairperson, The Nahar Group, agrees that the Pune real estate market is healthy and growing, attracting people from across the country. With large open spaces, there is huge scope for further development. Owing to the presence of large scale industries from the auto and manufacturing sector, a young talented workforce is in need of housing and therefore there is a huge demand for housing across all segments of property.

Source - TOI

Demand for 1 BHKs in Pune real estate on rise

As far as preference for property buying is concerned in Pune, 1BHKs have made their special space in the realty market. As per the latest edition of PropIndex (Oct-Dec) quarter, 1 BHK units saw a consistent rise in demand from the last three quarters. 

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The demand was registered from 28 to 34 per cent while supply remained stable at 17 per cent. Demand for 1 BHKs clearly shows that majority of buyers in Pune are opting for smaller units. As per industry experts various reasons can be cited for this particular trend.  “Pune city witnesses migration of professionals from across the nation and rather than staying on rent they prefer to buy,” informs Siraj Shaikh, lead consultant, Excel Real Estate. 

As far as preference for property buying is concerned in Pune, 1BHKs have made their special space in the realty market. As per the latest edition of PropIndex (Oct-Dec) quarter, 1 BHK units saw a consistent rise in demand from the last three quarters. The demand was registered from 28 to 34 per cent while supply remained stable at 17 per cent. Demand for 1 BHKs clearly shows that majority of buyers in Pune are opting for smaller units. As per industry experts various reasons can be cited for this particular trend.  

“Pune city witnesses migration of professionals from across the nation and rather than staying on rent they prefer to buy,” informs Siraj Shaikh, lead consultant, Excel Real Estate.

Which are the areas offering 1BHK’s the most?   

As per the data with Magicbricks.com, localities such as Wagholi, Hadapsar, Wakad and Kharadi offers 1BHKs the most in Pune.

Wagholi

Located in South Pune, the area is renowned today as one of the fast developing parts of city. Most of the demand comes from IT professionals for end use. Those who cannot afford to buy in premium areas such as Koregaon Park, prefers to buy here. As per Magicbricks data, a 1BHK unit sized from 500-1100 sq ft is available in a budget range from Rs 10-40 lakh.

Hadapsar

Strategically situated on the Pune-Solapur Highway, Hadapsar is in close proximity to the old central business areas of the city and about 5 km away from Magarpatta. Its close proximity to IT hubs and affordable property values makes the area a favourite of IT professionals at mid-level designations.  

The value of 1BHK will be within Rs 15-50 lakh. The sizes of flats are ranging from 450-700 sq ft.

Wakad

Located in West Pune, Wakad is a favored place for buyers owing to its proximity to Hinjewadi IT Pak and Mumbai-Pune Expressway ensuring quick access to Mumbai and main parts of Pune. Professionals working in the nearby IT companies find it convenient to settle down here as the properties are cheaper. One can buy apartments sized 600-1000 sq ft in price band of Rs 25-55 lakh.

Kharadi

Housing various renowned IT/ ITeS companies, Kharadi is one of the most preferred locations for 1BHK units. Although developers are delivering both 1 and 2BHK units but the demand of the former is more. 1BHK sized 500-1000 sq ft are available in a budget range of Rs 15-50 lakh.

Festive Offers: The developers are offering discounts in Pune to attract buyers this festival season. This Diwali, developers are offering new car on every booking! Many cases tax exemption is provided by the developers as additional benefits. Discounts on base price, pre launch offers, and other corporate discounts are provided. 

Source - TOI

Pune's top 3 most in-demand areas to buy property

he latest edition of Housing Sentiment Index (HSI), a joint initiative by Magicbricks and IIM-B, indicates West Pune as the most preferred destination with 30 per cent respondents preferring to buy residential property in the region.

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The western corridor of Pune comprises of various major localities such as Pashan, Pimple-Saudagar, Aundh, Kothrud, Balewadi, Hinjewadi, Baner, Wakad and Bardhan. All these localities are highly preferred owing to their easy accessibility from the Pune Mumbai Expressway and Hinjewadi IT Park.

What are the advantages of buying property in West Pune?

• West Pune ensures quality living.  The social infrastructure of the region is well-developed and caters to the needs of the mid-segment buyers. Some areas have witnessed more developments in terms of social infrastructure. For example, Aundh boasts of a number of shopping centers and supermarkets.
  
• The physical infrastructure is well-developed. The Hinjewadi Highway ensures smooth connectivity to nearby localities such as Wakad. Further, other infrastructures such as Dange Chowk Flyover, Bombay Pune Highway, Pune - Mumbai Expressway (West).
  
• West Pune is within the reach of common man which makes it a desirable place. West Pune offers varied housing options such as apartments, villa, residential house, plots and builder floors apartments.  
  
• With multiple housing options available, physical infrastructure in place and more employment opportunities, West Pune seems a locality to justify the cost you will invest.  Localities in West Pune are easily accessible from the Mumbai-Bengaluru Bypass, Hinjewadi IT hub and Rajiv Gandhi Infotech Park, thus boosting the real estate.

Localities in West Pune	Average Value – Rs/per sq ft
Pashan	6520 to 7770
Aundh	8040 to 10090
Kothrud	8410 to 10800
Hinjewadi	5290 to 6480
Baner	6620 to 8190
Wakad	5740 to 6820

• Unending supply of electricity and water is an advantage for the residents. Sewerage management in the region is also established.

Source - MB 

Property demand in Delhi-NCR slumped by 35%: Assocham

NEW DELHI: Demand for property in Delhi-NCR region has slumped by 30-35 per cent in the last one year, a survey on Thursday said. 

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According to the survey by industry body Assocham, the unsold inventory pressure in the region is the highest among all other cities, even as prices have declined in the last one year. 

"The National Capital Region (NCR) residential market is stuck with an estimated inventory of 1,70,000 units while another 90,000 dwelling units under-construction are likely to be delayed for hand-over," the survey said. It added, "Prices of 3-bedroom, 2 BHK and single room flats have seen correction by 30 per cent in Noida, 25 per cent in Gurgaon and 15 per cent in some key areas of Delhi but still, the demand stays subdued." 

The survey was conducted by Assocham among 120 real estate developers in Delhi-NCR. 

"A large inventory is piling up despite prices correcting by over 20 per cent in the last one year, while there is a huge fall in the new projects being launched by developers who are hard-pressed for cash," the paper noted with concern. 

The increase in inventory level is because of the falling demand from actual users as well as investors. Even the ready-to-move flats are finding few buyers, majority of respondents who took part in the survey said. g "The sentiment in the housing market is really at a low key. Even though there are signs of macroeconomic improvement, it would be a quite a lag before it gets reflected on the real estate markets," Assocham secretary General DS Rawat said. 

The survey further said, one of the issues afflicting the sentiment is the high level of debt with the real estate developers and their poor valuations in the stock markets, limiting their avenues for repair of the balance sheets. 

Majority of real estate developers said about 60 per cent of the unsold real estate in the NCRregion is in areas that are currently uninhabitable. The problem has been confounded by delays in regulatory clearances and litigations. 

As per the survey, there are nearly 8.5 million workers engaged in building and other construction activities in India.

Source - TOI