HUDA to speed up Dwarka expressway work

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In order to expedite work on the Dwarka expressway, which is running behind schedule, Huda administrator Anshaj Singh on Wednesday inspected ongoing work from Chouma Village to Kherki Daula and said the urban development agency would speed up the process of allotment of alternative plots to the families affected by the project.

“Some families have already been allotted alternative plots and now we are expediting the process for remaining families,” Singh said.

“We want to complete construction of the road in Huda area by March 2016. The under-construction railway over-bridge near Basai crossing is likely to be completed by June,” he said, adding officials have been directed to hold a meeting with the Indian Railways to streamline the work and ensure completion of over-bridge on time.

The expressway was sanctioned in 2007 and was expected to be ready before the 2010 CWG. But in 2008, some 350 out of 500 families living in and around New Palam Vihar, Tek Chand Nagar, Daultabad and Kherki Daula, and affected by the project, had filed petitions in the high court asking for a stay order on the acquisition of their properties, which was granted in 2010.

Huda had subsequently offered to resettle the petitioners in sectors 37C and 110A. The stay order was lifted in July after the petitioners accepted the rehabilitation plan, paving the way for construction of a 2.5km stretch of the road.

The expressway was planned to decongest traffic in Gurgaon by allowing vehicles from Jaipur to skip the expressway and head towards Dwarka and IGI Airport. NPR will be the third link road connecting Delhi and Gurgaon.

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Haryana to develop Gurgaon as smartest city: Manohar Lal Khattar

Haryana Chief Minister Manohar Lal Khattar on Wednesday said that Gurgaon will be the ‘smartest city’ and the state government will spare no efforts in this direction.

While addressing the Nasscom Product Conclave in Gurgaon, Khattar said though Gurgaon lagged behind as two other cities – Karnal and Faridabad – have been ranked above in the smart city race, but “this is not final”.

He said that as per the laid criteria of the Union Government, one of the main reasons for Gurgaon trailing behind in race for smart city was it’s non inclusion in Jawahar Lal Nehru Urban Renewal Mission (JNURM), which alone carries 20 marks, so Gurgaon has to compete out of 80 marks.

However, the state government has requested the Central Government that if Rs 100 crore, the amount to be given by Union Government annually for developing smart city, is provided to Haryana government, then Gurgaon can be included in the list of smart cities, Khattar said.

“The Central Government is considering this proposal. If accepted, Haryana might have three smart cities instead of two. Even if it is not accepted, then also the state government is committed to develop Gurgaon as ‘Smartest city’ because it is already a ‘smart city’,” the Chief Minister said.

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One of the best kept secrets of Indian real estate is out…

The Economic Survey for the last financial year states: “Data shows that the first claim upon the savings of households is physical assets such as gold and real estate.”

That Indians love their ‘real estate’ would be like stating the obvious. But sometimes it is necessary to state the obvious as well. Why? That will soon become clear.

AkhileshTilotia, a thematic research analyst with the institutional equities arm of the Kotak Mahindra Group, makes a very interesting point in his new book The Making of India—Gamechanging Transitions. As he writes: “Thanks to its love for real estate investments, India is in a curious position of having more houses than it has households.”

This becomes clear from the Census 2011 data. “India’s households increased by 60 million to 247 million from 187 million between 2001-2011. Reflecting India’s higher ‘physical’ savings, the number of houses went up by 81 million to 331 million from 250 million. The urban increases is telling: 38 million new houses for 24 million new households,” writes Tilotia.

So what is happening here? One explanation for the number of houses rising faster than the number of households may lie in the fact that houses are being bought as investment and not to be lived in. What this means is that many Indians own more than one house and then there are many more who do not own any, because prices are way beyond what they can afford. Further, given our penchant for owning real estate, a lot of real estate is being built sheerly from the point of view of fulfilling investment demand.

This is the best possible explanation for why the number of houses has gone up at a much faster pace than the number of households. Further, those who have black money to hide, don’t bother much about the location of where houses are being built. And that explains why houses even miles away from India’s biggest cities are so expensive.The Caravan magazine in a 2011 article, when real estate investment was at its peak, quoted Gautam Bhan, a consultant with the Indian Institute for Human Settlements, to make this point: “This economy is being built solely on speculation…These properties are being built solely for investment cycles. Why else would you build halfway to Agra? If you have ten businessmen who occasionally want to get rid of black money, you’ll have an apartment building. These flats will be bought and resold and bought and resold. Nobody even needs to live there.”

So what is the way out of this mess? How can houses be built and sold at prices so that people can buy them to live in them? As I have mentioned more than a few times in the past, the government needs to actively go after the black money hidden in physical assets like gold and real estate. There is no point in trying to actively pursue all the black money that has left the country and not do anything about all the black money lying in the country.

A crackdown on black money will lead to better tax compliance, meaning more taxes for the government. Further, it will also bring down the amount of black money that goes into real estate. This is easier said than done and will need solid political will for many years, if it has to be pursued seriously. Further, it is high time that agricultural income be brought under the tax net. There is no reason that rich farmers should not be paying income tax. In fact, in cities like Shimla, Chandigarh and even the National Capital Region, all the untaxed agricultural income chasing real estate has also been responsible for driving up home prices, among other things.

Ensuring affordable housing becomes available at a large scale level should be a major priority for the Narendra Modigovernment. As the Economic Survey points out: “Nearly 30 percent of the country’s population lives in cities and urban areas and this figure is projected to reach 50 per cent in 2030.” If affordable housing does not become the order of the day slums will become as common place in other cities, as they are currently in Mumbai. And that is not a happy thought to look forward to.

Also, as Tilotia points out in his book, “more than three-fourths of urban residents live cheek by jowl in cramped spaces.” This basically happens because of two reasons. The first reason is the low FSI ratio which has made land very expensive. The second reason is “the inability to commute cheaply and quickly, which means that people have to congregate in and around areas where they can find economic activity and public infrastructure.”

If affordable housing has to take off, all this needs to be set right.

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India’s real estate to need $ 257 billion investment by 2015

India’s real estate sector would need an investment of $ 257 billion by 2015, including Economic Weaker Section (EWS) housing, of which residential real estate alone would require $ 29 billion, says an EY-FICCI real estate report. “Investments required in the Indian real estate market by the year 2015, is approximately $ 42 billion (excluding EWS housing) and $ 257 billion (including EWS housing). Residential real estate alone will require an investment of $ 29 billion,” the report said. The Indian economy is ready to experiment with advanced funding options, such as real estate investment trusts (REITs) and provide industry players with a global competitive edge, said EY Tax partner (Real Estate Practice) Gaurav Karnik. “The contribution of the sector to country’s GDP has been estimated at 6.3% in 2013, and the segment is expected to generate 7.6 million jobs during the same period,” he said. However, due to macro-economic conditions, the Indian real estate sector across major cities is expected to see a mixed performance, the report said.

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How Indian Real Estate Market Will Likely Fair in 2015?

According to the National Housing Bank (NHB) Residex Index, residential property prices show an upward trend in the second half of 2014. First half had seen property prices dip, as the weak rupee and high inflation had a negative impact on spending. Needless to mention that 2015 will largely be about recovery. The RBI will most likely cut interest rates and this will see more spending in the residential real estate segment. The Ministry of Statistics Program and Implementation and PwC Analysis predict a growth of 8 to 9 per cent. Added to this, the introduction of REITs, improved market sentiment and more efforts by the government to reduce project loopholes and bottlenecks in transactions will go a long way in clearing the way for positive trends in 2015.

In India, real estate plays an important role, from affordable housing to infrastructure and generating employment. Here are some of the reasons why:

  • The Economic Survey of 2012-13 revealed housing to be the second largest industry that generates employment, after agriculture.
  • With more than 300 linked industries like steel, transport, construction, cement and brick, real estate contributes significantly to the country’s GDP share and capital formation.
  • NHB’s report places real estate as the third most impactful industry in India in terms of its effect on other industries and fourth in terms of employment generation.
  • The residential segment, comprising residential buildings, townships, schools, colleges and hospitals and other projects, makes the maximum overall contribution in the real estate industry and commands the largest part of its market share.
  • The real estate sector employs more than 35 million people, especially low and medium skilled labour
  • Directly impacts manufacturing
  • Attracts a lot of money in foreign direct investment (FDI)

Recap of 2014, its main events and economic drivers

  • According to Colliers Research, Bangalore and Chennai witnessed maximum demand and growth, while Kolkata, Mumbai and Gurgaon were unchanged. Despite this, many developers launched new projects during the end of 2014.
  • There is a backlog of unsold property. 2014 has seen delays in approvals, project clearances and targets, apart from debt commitment on property and government spending less in this area and a huge delay in finishing projects
  • Construction industry has grown 2 per cent from 2014 to 2015.

Trends in 2015

  • The Planning Commission estimates that by 2030, about 600 million people will live in cities. Affordable housing therefore is a huge demand and the industry has a large gap to meet, with shortage seen among the low income groups.
  • International agencies like IMF and World Bank predict an increase in GDP.
  • Real estate market is driven largely by sentiment.
  • First half of 2015 will be largely recovery with property markets.
  • ProjectVendor.com projects a 10 to 15 per cent increase in growth from FY14 to FY17 and 11 per cent growth in FY15. Residential and commercial projects, organised retail will contribute to this growth significantly.
  • Real estate construction market is poised to grow by 20 per cent between now and 2017.
  • Both large and specialised players stand to benefit and gain equally.
  • Real Estate Investment Trusts (REITs) and commercial real estate will make significant impact. REITs will have a huge impact in 2015. It is an internationally tried and tested strategy, especially in the USA, Taiwan, South Korea, Singapore and Australia. An REIT is a trust that buys, sells, develops and manages income-generating real estate property such as malls, commercial office spaces and more, with the main intention of attracting investors who can manage an interesting array of properties. Corporate investors benefit from tax exemptions. It largely impacts small investors and encourages proper investment channels in large real estate accounts, and is a better alternative to investing in stock, due to its higher returns and a diversified portfolio of investments. Blackstone, Xander, Brookfield and more real estate funds intend to launch REITs in the country and DLF, Phoenix and Prestige are expecting to make use of this huge opportunity.
  • The residential real estate space in India is divided into affordable housing, mid-level priced houses and the luxury segment. The onus on low cost housing is expected to put pressure on the luxury segment, but this is not significant. 2015 will focus more on recovery and clearing inventory, construction deadlines and backlogs.
  • Pricing is very important. Affordable price points will lead to higher absorption levels.
  • Easing pressure on the rupee will also impact the industry positively.

(more…)

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Decoding what Budget 2014-15 means for real estate

With a large number of offices and ITeS segment growth apart from residential growth coming from small tier II and tier III centres, the development of smart cities can bring opportunities for real estate developers, investors, end users and well as the housing loan sector.
On expected lines, the real estate sector and the infrastructure sector were the focus sectors of the government in the annual union budget of 2014-15. The finance minister announced a series of measures to bring investment into the sector while giving special emphasis on affordable housing. The announcement that Rs 8000 crore will be earmarked for rural housing along with a series of dedicated proposals augers well to the future of the realty sector in the country. Market analysts and real estate experts have given the budget a big thumbs-up as is focuses evenly on housing and development with both domestic and foreign investments in the sector.

(more…)

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NRI real estate investment norms simplified

The purchase and sale of immovable properties in India by a Non Resident Indian (NRI) or by a Person of Indian Origin (PIO) is really a very simple and easy affair with not much hassles and problems.

For a detailed and authentic answer one should always refer to the Foreign Exchange Management (Acquisition and Transfer of Immovable Properties in India) Regulations, 2000 as amended from time to time.

(more…)

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Realtors ‘launch’ projects sans nod

The Haryana government ban on ‘pre-launch’ of realty projects seems to have turned into a farce. In blatant violation of warnings by the authority, well-known brands and small developers continue to illegally pitch residential projects before acquiring the required licence, and in some cases, even without a final building plan.

Brokers openly send emails and SMSes in the name of soft launch to lure buyers, especially on Saturdays and Sundays. Such offers are being given for several projects coming up along the Northern Peripheral Road (NPR) in Sector 81-85, 102, 107, 37C, 67-71 and other sectors earmarked in the Gurgaon-Manesar Urban Complex 2025.

(more…)

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Haryana fixes deadline to make land records online

CHANDIGARH: Haryana Land Records and Consolidation Department has fixed October 31, 2012 as the deadline for making all land records hundred per cent online.

No manual ‘nakal’ of record of rights will be issued from November 1, 2012 and only computerized ‘nakal’ from software of Haryana Land Record Information System (HALRIS) would be permitted, said a spokesman of the department on Saturday.

A communication to this effect has been sent to all Deputy Commissioners in the State, he added. (more…)

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