Real estate sector likely to revive in 2013

                      Real estate sector likely to revive in 2013

After a long lull, the year 2013 is expected to bring back hopes of growth to the real estate sector, mainly due to the government's positive approach towards reforms and moderation of interest rates, experts say.

Land Acquisition and Real Estate Regulation Bills are expected to be passed during the year, while there is a likelihood of Reserve Bank bringing down the interest rates.

"The passage of FDI in multi-brand retail by the government shows its seriousness on introducing reforms. RBI can be expected to lower interest rates in the coming months which will benefit developers as well as consumers. This will boost the sentiments," Knight Frank India chairman Pranab Datta said.

Residential prices, which have been increasing over the past few years are likely to witness subdued growth in most markets in a short to medium term till the pressures of unsold inventory are eased out, CBRE chairman and managing director Anshuman Magazine said.

Finance Minister P Chidambaram had recently asked the developers to sell their unsold inventory at a lower price.

"Besides, infrastructure initiatives such as Greater Noida metro rail network and proposed metro link in north-west Bangalore are likely to have a positive impact on the residential market of these cities," Magazine said.

FDI in multi-brand retail will also boost the demand for commercial real estate.

"Apart from the international brands, several domestic brands are also exploring opportunities to increase their foot prints across the country. This anticipated growth in demand is expected to bring some upward movement in retail rentals, particularly along established hubs," DTZ-India chief executive officer Anshul Jain said.

According to Jones Lang LaSalle, major cities like Mumbai, NCR-Delhi, Bangalore, Chennai, Pune, Hyderabad and Kolkata will see the addition of close to 9.5 million square feet of mall space in 2013.

"The primary reason is that a sizable amount of supply that was expected to reach completion in 2012 has been being pushed to 2013," JLL chairman and country head Anuj Puri said.

While Mumbai, NCR-Delhi, Bangalore and Chennai will together contribute 70 per cent of the total retail space absorption, cities like Pune, Hyderabad and Kolkata will account for the remaining 30 per cent.

Further, the ongoing policy reforms are expected to provide some cushion to corporates who are likely to execute their expansion plans in near future.

"Demand for office space is expected to be broad-based and not restricted to IT-ITeS and banking sectors. However, even as leasing activity performs relatively well, rentals are expected to remain stable owing to large upcoming supply and high vacancy levels across most cities," Mr Jain said.

According to JLL, cities including Mumbai, Bangalore, Delhi NCR, Chennai, Hyderabad and Pune will witness commercial corporate property transactions focused on their own occupancy needs.

"We expect 2013 to bring a larger-than-usual number of NRI investors into the commercial space arena. This is because NRIs are currently enthused by the prevailing exchange rate benefits and the fact that commercial real estate capital values are still 15-25 percent under their 2007-08 peak levels," Mr Puri said.

700 plot owners in Gurgaon to get fresh allotment

For over 700 plot owners on disputed Haryana Urban Development Authority (HUDA) land, the agonizing wait for getting fresh allotment might be over by January next year. Sorting out the cases of disputed plots has been a huge task for HUDA, officials said. The disputed plot owners had been fighting cases for more than seven years to get alternative plots by HUDA.

“So far over 300 disputed plots have been cleared and the owners have been allotted as per HUDA rules and regulations. Now in the next lot we are planning to clear over 700 plots,” said HUDA, administrator, Praveen Kumar. Earlier, because of paucity of the land and vacant plots, HUDA had been grappling with the allotment of the plots and this led to litigation in different courts.

Most of the plot owners were allotted plots and have paid substantial amounts to HUDA. The entire process of allotment went haywire after the landowners dragged HUDA to court and it became difficult to allot the plots. After the recent high court order HUDA has now swung into action and has expedited the allotment of the plots. HUDA has now worked out demarcation of all the vacant plots that are clear of any encumbrance.

The estate officer-II, Manoj Khatri, said: “Clearing of all the cases of owners of disputed plots has been the top priority and I am sure that all the cases in EO II range will be completed”. Khatri has done all the spadework before clearing the disputed plot cases. The demarcation of all the vacant plots has been done in all the sectors now the next stage of action is seeking green light from the chief administrator’s office. “The details of the plots on offer in different sectors will be sent to the chief administrator, HUDA, and then the allotment process will start, most likely in the first half of January,” said Khatri.

As per the tentative plan, alternative plots will be offered in Sectors 33, 47, 49, 50 and 43. HUDA is also looking for records of other sectors, which have vacant or surrendered plots. Asked about the payment pattern for the plot, another senior HUDA official said: “The plot owners will not require to pay any extra money in case they have cleared all the dues. They will be given fresh allotment letters as per HUDA rules.” The plot owners have welcomed HUDA’s decision to clear all the pending allotments but they demand compensation for the delay.

“The delay in allotment has proved costly for all us as construction cost has shot up. I had got allotment in 2006 and the rise in construction cost has grown manifold now,” said a plot owner, who did not want to be named.

Connectivity, Public Transport and Down Payment attracts First Time Home Buyers

  The property market in India has seen a lot of action over the past decade. Decent economic growth, easy availability of finance coupled with high disposable income has made many young Indians look favorably at a real estate investment. What are the various considerations when a first time home buyer sets out to search for a property? Is there a change in the mindset of the home buyers? To understand this and many more questions related to the psyche of a first time home buyer, Makaan.com, the fastest growing real estate website in India, conducted a research christened “First Home Survey” that ran on the website between 23rd May to 13th June 2012 and witnessed a participation of more than 3953 first time home buyers from across the country including key cities of Mumbai, Delhi NCR, Bangalore, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad, Chandigarh & more. Most of the survey takers were male, in the age group of 26 – 45 years.

   It is a popular belief among real estate players that Construction Linked plan (CLP) is preferred by home buyers as it provides protection against construction and other delays. Home buyers, however, seem to have a different take on the issue. They prefer a Down Payment (DP) plan as it comes with maximum discount. The research shows a whopping 41% home buyers preferred “Down Payment” plan. The urge for a discount is stronger than the security of a timely possession at least in case of a first time home buyer. In fact CLP is not even the second preference. Flexi Plan (FP) which is essentially a mix of Time Linked (TLP) & CLP is preferred by next 30% home buyers. This plan also offers greater discount compared with CLP. The pseudo favorite Construction Linked Plan (CLP) is favored by just 18% home buyers.

 

 

 We believe this to be an important insight into the buying psyche but limited to first time home buyers only. For people buying their second home or someone who has experienced a delay in possession, the preference will be for a CLP. Home buyers will realize their DP advantage only if their projects are handed over on time, a delay of 12-18 month will erode that advantage.

‘New circle rates in Delhi higher than market value’

NEW DELHI: Some real estate experts have said the new circle rates, or the minimum valuation at which a property can be registered with the government, are higher than the market value in a few areas.

The revised rates, which came into effect on December 6, are 200 per cent higher in Category A colonies, 50 per cent in Category B areas, and 22 per cent in the other colonies.

In the first big deal, involving a bungalow on central Delhi’s KG Marg, the buyer had to pay stamp duty at 770,000 per sq yard, which, according to experts, is more than double the existing property rate of about 300,000 per sq yard.                                                                                                       

                                

The 18,670-sq ft, over 70-year-old bungalow owned by the Sardar Ujjal Singh Family Trust and the family of Sardar Mohan Singh, was bought by Ambience group owner Raj Singh Gehlot for Rs 136 crore.

“The price in this area is much lower than the new circle rate,” said Santhosh Kumar, chief executive officer, operations, at Jones Lang LaSalle India, one of the real estate firms that advised the deal. Gehlot, who bought the property in the name of two family members, said because of the new circle rates, he had to pay much higher stamp duty and registration charges, which collectively came to about Rs 12.5 crore.

“Clubbing areas as varied as Lutyens Bungalow Zone and central Delhi with Golf Links, Vasant Vihar and Shanti Niketan, where per sq yard rates are much higher because of smaller plot sizes and permission for higher ground coverage, has created this anomaly in the market,” said Jaiwant Daulat Singh, director of Daulat Singh Consulting, another firm that advised on the transaction along with Mine & Young Advocates & Legal Consultants and Jones Lang LaSalle.

The situation is the same in areas like New Friends Colony, Friends Colony and Maharani Bagh, where experts say the market rate does not exceed 400,000 per sq yard but buyers will have to pay stamp duty at the rate of 770,000 per sq yard.

The revised circle rate for Category A areas is 770,000 per sq yard, compared with 260,000 per sq yard earlier. The neighbourhoods of Greater Kailash, Defence Colony, Gulmohar Park, Panchsheel Enclave, Anandlok, Green Park, Golf Links and Hauz Khas are among the areas under this category.

                                                                                             
                                                  

'Delhi govt delaying registration of unauthorised colonies'

New Delhi: North Delhi Municipal Corporation Standing Committee Chairman Yogender Chandolia on Tuesday accused Delhi government of delaying the registration of unauthorised colonies developed on private lands.

"The issue is being delayed keeping the forthcoming (Delhi) Assembly elections in mind," Chandolia said in a statement.

As per building bylaws, unauthorised colonies developed on private lands where ownership or possession lies with the owners by way of power of attorney, registered deed or as per agreement to sale, such kind of map should not be approved.

In such condition, owners must pay conversion and other charges to the agencies concerned and thereafter No Objection Certificate (NOC) is issued.

"The Delhi government is evading this fact. So this would be additional burden on the unauthorised colonies residents," he said.

He demanded that the registration be immediately started and these colonies be handed over to the Municipal authorities for providing proper civic amenities. 

Mumbai among world's 'dirtiest' cities: Survey

Washington: India's commercial capital, Mumbai, has been named among the world's 'dirtiest' cities, ranking last in the "cleanest streets" category, a global survey of 40 key tourist cities has found.

According to TripAdvisor's Cities Survey, Tokyo grabbed the first place while Mumbai ranked last in the list of "cleanest streets".

Similarly in the category of "ease of getting around", Mumbai ranked at the last position while Zurich stood at first place, the company said in a press release.

The cities with the rudest locals, dirtiest streets and worst shopping have been revealed by the Survey which found that the least-friendly locals were from Moscow.

The Russian city ranked last in a number of categories, including "friendliest locals".

Tokyo was the most highly decorated world city, ranking number one for best taxi services, friendliest taxi drivers, best public transportation, cleanest streets and safety.

New York City took out the top gong for shopping, but travellers felt the city's streets could use a sweep with the Big Apple ranking 28 out of 40 for cleanliness.

"New York City's global reputation as a shopping mecca was reinforced by the opinions of the TripAdvisor community worldwide," said Brooke Ferencsik, director of communications of TripAdvisor.

The survey, completed by more than 75,000 people, looked into how travellers and locals viewed 40 key tourist cities around the world. 

Govt plans easy norms for colonies

Registry To Open With 312 Colonies On Private Land;Survey On For Others 

New Delhi: The Assembly elections just a few months away,the cabinet is expected to discuss a proposal to ease norms for development works in unauthorized colonies on Monday.Minister for urban development and revenue Arvinder Singh Lovely confirmed to TOI that registry will open in first 312 colonies on private land.The revenue department is carrying out a survey in the remaining 583 colonies to establish if any of these are on private land.The survey will be completed by December 20, Lovely said.There are plans to hold camps for colonies on government land after the survey.These colonies will need to pay regularization charges to earn the legal tag.



LEGAL TAG SOON: There are plans to hold camps for colonies on government land after the surveyBut even as the state prepares to woo residents of unauthorized colonies with plans of development,the government will still have to contend with an aggressive BJP in the assembly.Meanwhile,former NCP MLA and Delhi Vikas Morcha president,Ramvir Singh Bidhuri,declared on Sunday that a demonstration will be organized outside the CMs residence on Janaury 6 to highlight the problems of people living in unauthorized colonies,unauthorized regularized colonies,resettlement colonies,JJ clusters and villages.A statement issued by the Morcha asks CM Sheila Dikshit (in picture above),along with Union urban development minister Kamal Nath,Union minister for housing Ajay Maken and Delhi urban development minister Arvinder Singh Lovely to come to the rally and answers questions from residents.So far there have been only assurances.People want answers now, Bidhuri asserted.