Real estate market may see an upswing, say developers

Vadodara: The real estate market in Vadodara seems to be set for an upswing this year.

The CREDAI Vadodara Property Carnival 2016 organized at Navlakhi Grounds saw a record number of bookings for apartments and duplexes over last three days.

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"The carnival saw nearly 160 on-the-spot bookings in three days. This the third edition of CREDAI property show but this is the first time that people have done on the spot bookings. Earlier, people only inquired about the property and left," said Vikram Gupta, president of CREDAI, Vadodara. He added that the high number of bookings indicated that real estate market in the city is seeing a revival.

"The maximum number of bookings are for affordable flats of two bedroom-hall- kitchen and three bedroom-hall-kitchen ranging between Rs 25 lakh to Rs 25 lakh. Most of those who booked were not looking to invest but to stay in the property they were buying. We got bookings in areas like Sama-Savli Road, Alkapuri, Waghoda Road, Bhayli and Sevasi," Gupta told TOI.

The property carnival that ended on Sunday was spread over five lakh square feet and had 84 stalls including 70 developers. Lakhs of citizens visited the carnival that also offered lucky draws to attract interested buyers. For the lucky draw, the first winner will get a two bedroom-hall-kitchen on Dabhoi Road, the second winner will get a car and the third winner will get a furniture.

"We got five bookings during this carnival and we are expecting more bookings in next one month. The footfall was genuine and it does indicate that 2016 will be a good year for real estate in the city," said Kunal Arya, director of Darshanam Group.

"The lucky draws, on-the-spot discounts and other schemes drew lot of customers to the carnival this year. We got an overwhelming response from citizens," said Kuntal Shah, managing director of Vedant Group.

Source - TOI 

Real estate market may see an upswing, say developers

Vadodara: The real estate market in Vadodara seems to be set for an upswing this year.

www.sevagiri.com

The CREDAI Vadodara Property Carnival 2016 organized at Navlakhi Grounds saw a record number of bookings for apartments and duplexes over last three days.

"The carnival saw nearly 160 on-the-spot bookings in three days. This the third edition of CREDAI property show but this is the first time that people have done on the spot bookings. Earlier, people only inquired about the property and left," said Vikram Gupta, president of CREDAI, Vadodara. He added that the high number of bookings indicated that real estate market in the city is seeing a revival.

"The maximum number of bookings are for affordable flats of two bedroom-hall- kitchen and three bedroom-hall-kitchen ranging between Rs 25 lakh to Rs 25 lakh. Most of those who booked were not looking to invest but to stay in the property they were buying. We got bookings in areas like Sama-Savli Road, Alkapuri, Waghoda Road, Bhayli and Sevasi," Gupta told TOI.

The property carnival that ended on Sunday was spread over five lakh square feet and had 84 stalls including 70 developers. Lakhs of citizens visited the carnival that also offered lucky draws to attract interested buyers. For the lucky draw, the first winner will get a two bedroom-hall-kitchen on Dabhoi Road, the second winner will get a car and the third winner will get a furniture.

"We got five bookings during this carnival and we are expecting more bookings in next one month. The footfall was genuine and it does indicate that 2016 will be a good year for real estate in the city," said Kunal Arya, director of Darshanam Group.

"The lucky draws, on-the-spot discounts and other schemes drew lot of customers to the carnival this year. We got an overwhelming response from citizens," said Kuntal Shah, managing director of Vedant Group.

Source - TOI 

Delhi HC issues notices to CCI, CREDAI and 20 realty developers over cartelisation, matter to be heard on Jan 18

MUMBAI: Realty developers' troubles regarding allegations of cartelisation have got murkier as the petitioner has now moved the Delhi High Court against competition watchdog Competition Commission of India (CCI) itself.

 The petition, along with CCI, has dragged builders' body Confederation of Real Estate Developers Association of India (CREDAI) and 20 prominent developers including Unitech, Tata Housing Development Co, BPTP, Oberoi Realty and Puravankara Projects, to the court. The petition is challenging the CCI's January order to close the case regarding allegation of cartelization among builders. 

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The Delhi High Court has issued notices to CCI, CREDAI and developers seeking response to this petition and the matter is scheduled to be heard on January 18. 

Following a complaint last year, CCI's investigation arm had prepared a report with findings that builders were engaged in unfair trade practices such as one-sided contracts with inadequate disclosures. The petition had then also alleged that the major realty developers were not disclosing crucial information such as total common area calculation and proportionate share of the apartment being sold on a super built-up area basis. CCI had, in January, dismissed the matter through an order.

 "The case has been admitted in September this year. CCI had closed down the case on the grounds of insufficiency of evidence, whereas my contention is that evidence is not required due to presumption of law enshrined under section 3(3) of the Competition Act," said advocate Jyoti Swaroop Arora, who has challenged the anti-monopoly regulator's order. An email query to CCI and CREDAI remained unanswered until the time of going to press.

 Confirming the development, Delhi-based developer BPTP said, "The matter is sub-judice and it would not be appropriate for us to comment on the matter at this stage, though it is matter of record that we have succeeded before the Hon'ble Competition Commission of India." 

While according to Mumbai-based Tata Housing Development Company the petition has not been admitted yet. "CCI has disposed the complaint by giving a clean chit to Tata Housing Development Co. Ltd. and other developers vide order dated 03.02.2015 of CCI. However, we have been informed that the complainant has filed a writ petition before the Delhi High Court which is not admitted so far," a Tata Housing spokesperson said in an email response.

 According to Rohan Pate, director of Pune-based Amit Enterprises Housing, the company has provided an immediate and complete response to the notice. "All calculations are made as per the industry standards and relevant information is shared with the client in advance. There's no question of making one-sided contracts and not sharing any important information with our clients," Pate explained. 

A cartel typically implies arrangements among more than two firms aimed at increasing prices through tactics such as cuts in production. Cartelisation leads to high prices, poor quality and reduced choice. As per the Competition Act, the maximum penalty for cartelisation is three times a company's profit, or 10% of its turnover, whichever is higher. 

BUILDERS DENY CHARGES 

"We deny any allegation of cartelization. The real estate Industry is bustling with competition which in turn offers the best choices to the discerning customer. The sheer number of players in the industry overrules any form of cartelization, hence the CCI rightly dismissed the complaint before it earlier," said Ashish Puravankara - Managing Director, Puravankara Projects.

 "We believe the CCI will file a suitable reply in response to the notice received from the Delhi HC and defend its earlier order," he explained. 

The petition has named Gaursons India, K Raheja Corp, Amrapali Group, Supertech Ltd, Ansal Properties & Infrastructure, Prestige Estates Projects, Avalon Group, Salarpuria Group, Tulip Group and Ambuja Neotia Group as respondents in the matter. Email queries to these companies remained unanswered. 

Source - ET
 

Developers to Deposit 70% of Project Cost in Separate Account

New Delhi: The government on Wednesday reached out to the Opposition including the Congress by agreeing to incorporate in the Real Estate (Regulation and Development) Bill 2015, a provision requiring real estate developers to deposit 70 per cent of the project cost in a separate escrow account.

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Congress and CPI(M) have demanded this provision specifically to be included in the proposed Bill.

Union Cabinet chaired by Prime Minister Narendra Modi approved several amendments to the Real Estate (Regulation and Development) Bill, 2015 aimed to protect the interests of buyers while at the same time promoting investments in the sector.

According to a senior Urban Development Ministry official, the government has gone beyond the recommendations of the Select Committee of Rajya Sabha which has recommended minimum 50 per cent of sale proceeds to be deposited in a separate escrow account.

The decision of cabinet today has significantly improved the prospects of the Real Estate (Regulation and Development) Bill 2015 being passed in the current session.

There are several changes in the Bill based on the recommendations of the Select Committee of Rajya Sabha that has examined the Bill pending in Rajya Sabha and the official amendments proposed earlier.

The Bill provides uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector. It will boost domestic and foreign investment in the real estate sector and help achieve the objective of the government to provide 'Housing for All' by enhanced private participation.

The amendments piloted by the Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu include mandatory registration with Real Estate Regulatory Authorities of projects of 500 sq mt area or 8 flats instead of 1,000 sq mt or 12 flats proposed earlier.

This enables registration of more projects with the regulatory authority thereby protecting buyers.

The Real Estate (Regulation and Development) Bill is a pioneering initiative to protect the interest of consumers, promote fair play in real estate transactions and to ensure timely execution of projects.

Source - NDTV 

Developers to Deposit 70% of Project Cost in Separate Account

New Delhi: The government on Wednesday reached out to the Opposition including the Congress by agreeing to incorporate in the Real Estate (Regulation and Development) Bill 2015, a provision requiring real estate developers to deposit 70 per cent of the project cost in a separate escrow account.

www.sevagiri.com

Congress and CPI(M) have demanded this provision specifically to be included in the proposed Bill.

Union Cabinet chaired by Prime Minister Narendra Modi approved several amendments to the Real Estate (Regulation and Development) Bill, 2015 aimed to protect the interests of buyers while at the same time promoting investments in the sector.

According to a senior Urban Development Ministry official, the government has gone beyond the recommendations of the Select Committee of Rajya Sabha which has recommended minimum 50 per cent of sale proceeds to be deposited in a separate escrow account.

The decision of cabinet today has significantly improved the prospects of the Real Estate (Regulation and Development) Bill 2015 being passed in the current session.

There are several changes in the Bill based on the recommendations of the Select Committee of Rajya Sabha that has examined the Bill pending in Rajya Sabha and the official amendments proposed earlier.

The Bill provides uniform regulatory environment to ensure speedy adjudication of disputes and orderly growth of the real estate sector. It will boost domestic and foreign investment in the real estate sector and help achieve the objective of the government to provide 'Housing for All' by enhanced private participation.

The amendments piloted by the Housing and Urban Poverty Alleviation Minister M Venkaiah Naidu include mandatory registration with Real Estate Regulatory Authorities of projects of 500 sq mt area or 8 flats instead of 1,000 sq mt or 12 flats proposed earlier.

This enables registration of more projects with the regulatory authority thereby protecting buyers.

The Real Estate (Regulation and Development) Bill is a pioneering initiative to protect the interest of consumers, promote fair play in real estate transactions and to ensure timely execution of projects.

Source - NDTV 

Odisha Developers Welcome New Housing Policy

Bhubaneswar: Real estate developers in the state are pinning hopes on the state’s new housing policy combined with the recent   Reserve Bank of India(RBI) decision to increase loan to value(LTV) ratio to revive the sluggish housing market in the festival season.

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The ‘Policy for Housing for All in urban Areas 2015’ unveiled by chief minister Naveen  Patnaik on October 11, promises a slew of incentives to create housing stock for economically weaker sections(EWS) and lower income groups(LIG). Though market watchers attribute the stagnation to demand exceeding supply in the state capital region, oversupply is a factor mostly in the middle and higher income segments. An estimated around 20,000 housing units, each in the price range of Rs 30 lakh to Rs 60 lakh, remain unsold in and around Bhubaneswar.

However there is  almost no housing units in the Rs 10 lakh to Rs 30 lakh segment where demand is maximum. “After the new policy is in place, developers will love to enter the market in the below Rs20 lakh  segment, where there is huge scope,’’ said D S Tripathy, joint secretary of Confederation of Real Estate Developers Association of India (Credai).

According to an estimate by the Technical Group on urban Housing shortage (2012-17),the state has a shortfall of about 4,10.000 housing units while Cuttack-Bhubaneswar needs to add 3.60lakh units by 2022. The government policy promises fast track approval, waiver of building sanction fee peripheral development for EWS/LIG units, Of the seven various models offered in the policy to create EWS/LIG houses, the developers are upbeat about Model  2.Under this model, private  developers constructing EWS/LIG units beyond the mandatory 10% of their project size will get several incentives.

They will get additional floor space equivalent to 100% of built up area used for EWS and 50% of area used for LIG which they can use for other category of houses. The developer   will   beat   liberty to determine the sale price of such extra EWS/LIG dwelling units subject to an overall upper limit of Rs 15lakh per unit.

“There will be huge scope in the segment for the developers because there will be a large clientele for such houses,” said Umesh Patnaik, president of Association for Odisha Real Estate Developers.

Notably, under the mandatory provision (model I), each developer has to reserve 10% of any residential project of size 2,000 square meter or more for the EWS. Sale price of such units will be decided by the Odisha Urban Housing Mission.

Developers feel the recent RBI decision to increase LTV (ratio of the amount of loan a buyer is eligible to total value of property) to 90% for houses priced up to Rs 30 lakh will also act as a huge push to the market.

Reda   president Pradipta   Biswasroy said while some recent developments were positive signs, the government should work out a rational value added tax structure for the housing sector.

Source - TOI

Developers want banks to cut rates

NEW DELHI: The sharp cut in repo rate is expected to give a fresh lease of life to the struggling real estate sector while lowering of risk weight for affordable housing loans is likely to add to the recovery. 

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Developers, who have been saddled with huge inventory, now want banks to cut their lending rates, particularly when the festival season is round the corner.
At present, the minimum risk weight applicable to individual housing loan is 50%. The RBI said it is proposing to reduce the risk weight applicable to lower-value but well-collateralized individual housing loan, in an attempt to improve "affordability of low-cost housing" for economically weaker section and low-income group and give a fillip to "housing for all". 
The general perception in market is that banks must cut lending rates to ensure a recovery in the real estate sector.
"We are hopeful that banks will take the cue and pass on the benefit to the end-user, which will trigger a rise in demand for housing ahead of the festive season," said Navin Raheja, chairman, National Real Estate Development Council.

SBI has already cut its base rate by 40 basis points to 9.3%. ICICI Bank has also expressed its intent to cut rate in due course. HDFC Bank cut its rate in the first week of September to 9.35%. Developers, however, feel rates should fall below 9% to enthuse buyers.

The 40 basis points cut effected by SBI will give a relief of only 2.8% in EMI to Rs 45,955 on a Rs 50 lakh loan for 20 years. A half a percentage point rate cut (50 basis points) will lead to reduction in EMI by only 3.5%. This means, on a loan of Rs 50 lakh for 20 years, EMI will come down from Rs 47,262 to Rs 45,631 if the interest rate goes down from 9.7% to 9.2%.
So, buyers feel that interest rate should be cut by at least one percentage point (100 basis points), which will give a relief of 6.8% in EMI. In 2015 calendar year, RBI has already cut repo rate by 1.25 percentage points in four tranches, but so far, banks have cut their rates by around 0.5 percentage points only.
Another key issue is whether developers will reduce prices or not. They say there is no scope to cut price as they are selling at the lowest possible price. "At the present price level we are hardly making any money," said Getamber Anand, president of Confederation of Real Estate Developers' Associations of India. Underlining the importance of availability of cheap fund, Anand said RBI must impress upon banks to cut lending rates. 
However, developers and investors are saddled with large inventory. So, in the coming festive season, developers in markets such as Mumbai, Banguluru and Pune are likely to offer large discounts and freebies to push sales and clear inventory.

Source - TOI 

Developers unhappy about rule on solar panels for high rises

MADURAI: The recent decision of the Tamil Nadu government to make solar power generation facility mandatory for buildings with more than four floors has not gone down well with many developers in the city, who are worried about the cost involved. 

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Setting up a single solar plant can cost up to Rs75,000 or Rs80,000. V G R Lakshan, general manager, sales and markeing, Meenakshi Towers LLP, said, "Real estate is in a pretty bad state right now. It is difficult for builders to shell out so much money." 

Developers want a 100% subsidy from the government to set up solar power plants. 

Besides the cost, the process of setting up the plants is itself cumbersome, they said, including the construction and getting permits. "We need to get banks loans as well, which is an added burden," Lakshan added. Developers also said that solar panels would occupy the entire common terrace, due to which residents would disagree to the move. 

A Madurai-based proprietor, Zaid Omar of Pryme promoters said, "The installation of a solar panel on the terrace would need a room for the batteries. Also, the investment is huge. Hence, some clause must be formed to recover the investments from the residents." 

A few developers welcomed the new rule. They said it would help cut down on the maintenance cost. Once solar panels are installed, there is no need to spend on batteries, due to which the house owners need to pay less. For 32 flats, the house owners will be able to save Rs1.4 lakh a year. Marketing manager, Shadab Hussain said, "The new rule set by the Tamil Nadu government would be effective after it is implemented since we can save a lot of money per month. But the only concern for us is the huge investment." 

Source - TNN 

Green Tribunal order on housing puts developers in a bind

The National Green Tribunal on Tuesday made it mandatory for developers to get environmental clearance for projects above 20,000 sq m.

The ruling comes as a big blow to developers. Here's why.

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"If the project area is less than 20,000 sq m, developers can get approval at the local level itself. Developers used to exclude non floor space index (FSI) while submitting plans, so as to decrease the total construction area and get the plan approved by the local corporation," said advocate Aditya Pratap, who argued the case before the bench.

The appellants were Sunil Kumar Chug and Ravindra Kumar Khosla, residents of an area in Sion where a Slum Rehabilitation Scheme was under implementation.

"Non-FSI area includes staircase, lobby, flowerbeds etc. Even though developers were charging buyers for super built-up area, they were systematically dropping this non-FSI area to avoid environmental clearance," Aditya said.

If a project is to be submitted for environment clearance, developers will have to show the entire plan, including parking space, recreation facilities, open space and fire safety system.

Predictably, the developer community is agitated. Ravi Patil, developer from Navi Mumbai, said that the appellate court ruling will have a negative impact on housing project in Mumbai city and its peripheries.

"Activists, buyers and residents of rehab buildings will use the order to change the plan. This ruling can set a wrong precedent to derail development. It is really a big setback. The government should appeal against this ruling," he said.

But Atul Nemade, a property expert, said that there is so much confusion in the developers' projects that no one understands what is the exact plan submitted and approved. "There should be transparency and rules have to be followed. Buyers should get adequate parking, open space and recreation facilities because they pay huge money to buy their dream homes," he said.

Aditya said most people were deprived of many facilities and amenities due to the developers' malpractice. "Earlier, in Slum Rehabilitation Projects, most parking was added to the sale component to make big money," he alleged.

He said that the present NGT order stated that the 2011 circular of the environment impact assessment will be applicable retrospectively since 2006.

Sunil Mantri, president of National Real Estate Development Council (Naredco), an umbrella body of developers, was surprised. "How can a ruling be implemented with retrospective effect? It will mess up the real- estate industry. As developers, we provide many services like gym and swimming pools. If everything is counted into FSI, developers will restrain from giving good facilities to buyers. This ruling may also override other decisions and circulars of government bodies. It will have an adverse impact on the property market. We will read the fine print and appeal against the ruling," said Mantri.

Source - DNA 

Allahabad High Court's stay on construction in Omaxe Grandwoods comes as a warning to all developers

Today builders change building plans at the drop of a hat, violating construction norms without fear of legal repercussions. However, a great concern is that development authorities in Noida and Greater Noida are wilfully disregarding the Uttar Pradesh Apartment (Promotion   of Construction, Ownership and Maintenance) Act, 2010. They are offering additional FAR (floor area ratio, which allows builders to add more structures or floors to buildings); and clearing changes in building plans without ensuring if consent has been taken from residents in the projects as per the Apartment Act.

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The matter was brought to light when the Allahabad High Court recently came to the rescue of homebuyers, restraining real estate developer Omaxe from further building any structures in its completed project, Grandwoods, in Sector 93, Noida.

How a developer was permitted by the Authority to revise its project plan after completion of the project is a question that only the top officials of the Authority can answer.

Grandwoods, launched in 2006 on a 1,20,000 sq mt plot in sector 93B, Noida, was allowed 1.5 FAR in its original layout plan. Apartments were sold till 2010 on the basis of the  original layout plan. When the project was almost ready, on May11, 2011, Omaxe applied for 33% extra FAR. Two days later, on May 13, 2011, the builder also applied for a completion certificate. A few days later, on May 31, Omaxe was given the required FAR, which meant that the builder could add more structures or build further on them.

Soon after that, in July 2011, Omaxe started construction on the basis of the revised plan and allegedly encroached upon common areas and facilities such as parks and common parking. In August, 2011, the apartment owners filed a writ petition in the Allahabad High Court (HC) for scrapping the revised plan for violation of the UP Apartment Act 2010. They alleged that villas would be built as per the new plans on areas meant for parks with grass lawns.

The HC granted an interim stay on construction on August 30, 2011, but in 2014, the developer again encroached upon another park area and started excavation work to construct two high-rise towers called Riyasat. Grandwoods resident Dipesh Jain filed another petition with the HC on April 2015. He pleaded that as per provision 4 (4) of the UP Apartment Act, consent of buyers was necessary for alterations in housing plans. No consent was given by the homebuyers, nor did anyone seek their consent for making alterations or changes in the original housing plans. Rather, Jain alleged, the entire process was kept under  wraps by the respondents (Noida Authority and the developer) to avoid any legal action and bring about permanent changes.”

Extra FAR of “33% had enabled respondent 4 (Omaxe) to encroach upon the common undivided open park area for the construction of an apartment tower named Riyasat, thereby reducing the exit passage below the applicable National Building Code. Extra floors and extra buildings have been added to the original sanctioned plan in the declared group housing scheme which is not permitted under law as no consent was obtained before the plans were amended,” Jain alleged.

Source - Hindustan Times