Tag Archives: Community organizing

Real Estate Sops can’t impress Firms.

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The finance minister relaxed borrowing norms for real estate firms and extended the loan subsidy for low-cost affordable houses. The concessions have, however, failed to impress the industry leaders who termed it as a too-little-too late move that would have a limited impact on the sector.

“I propose to allow ECB (external commercial borrowing) for low-cost affordable housing projects,“ the Budget said.

The move has a dual aim of expanding the window of funds for real estate developers such that affordable housing projects do not face cash crunch and are completed within the time frame.

Global consultancy Deloitte said RBI had earlier allowed ECB for developers in integrated township projects of 100 acres or more till December 31, 2010.

The FM also extended, by a year, the 1% interest subsidy on loans up to R15 lakh where the cost of house does not exceed R25 lakh.

Realty Sector in Disappointment

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The Union Budget 2012-13 on Friday proposed allowing external commercial borrowing for low cost affordable housing projects.

Presenting the Budget in the Lok Sabha, the Finance Minister, Mr Pranabh Mukherjee, also proposed setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans.

The Minister also proposed to enhance provisions under Rural Housing Fund from Rs 3,000 crore to Rs 4,000 crore besides extending the scheme of interest subvention of 1 per cent on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, for another year.

Meanwhile, real estate players were disappointed with the Budget saying it failed to highlight the role of the housing sector in the economy.

“The proposal of bringing in an umbrella tax structure to the cement industry will increase the cost of housing and will negate the development process. Also providing ECB to affordable housing is a minor respite to the sector. There is an inherent risk of liquidity drying up wherein the exemption of capital gains tax to invest in small and medium enterprises may result in cash out from real estate,” Mr Lalit Jain, President, CREDAI, the industry body of real estate players, said.

The sector also said that the increase in service tax will increase the cost of construction by Rs 50-100 per sq feet.

According to Mr Anurag Mathur, Managing Director, Cushman & Wakefield India, “The increase in allocation in infrastructure implies a clear intent on enhancing the urbanisation process as well as providing a support to the slowing industrial sector. At the same time the increase in the service tax from 10 per cent to 12 per cent would lead to additional burden on the tenants as the service tax on rentals has remained unchanged.”

Builders say that Pranab Mukherjee has ignored ground realty in the Union Budget 2012-13.

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With predicting an escalation in property prices, top players in the realty sector said they had been ignored by the finance minister.

Chief of the Confederation of Real Estate Developers’ Association of India (CREDAI), Lalit Kumar Jain, said the announcement on external commercial borrowings (ECB) for affordable housing was a minor respite but still meaningless. Jain, who is also chairman and managing director of Kumar Urban Development Ltd, added, “We contribute 6.5% to the GDP and expected a big boost from the budget for affordable housing through special schemes, an interest subvention of 5-7 % for LIG (low income group) and EWS (economically weaker section) housing and promotion of rental housing through tax exemption.”

Jain also pointed out that the interest subsidy on home loans was too low. The Budget has extended the scheme of interest subvention of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for another year.

In addition, Gaurav Gupta, director, Omkar Realtors & Developers, lamented that the realty sector had got nothing to boost market and customer sentiments. “There are no indications of this sector being granted the status of an industry, which it much deserves. On the contrary, the increase in service tax will push up realty prices as the additional cost will be passed on to the buyers.”

Tata Housing MD and CEO Brotin Banerjee added, “Initiatives to make affordable housing available to a larger section of the society have only been met partially.”

There were some who welcomed the proposals. Sachin Sandhir, MD, RICS South Asia felt it “exceeded expectations” given the pressures on the fiscal situation.

Budget 2012: A ray of Hope for the Real estate sector.

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The real estate industry is very optimistic about the coming budget 2012 as the budget may bring a sheer relief  for the affordable housing buyers.

Real estate industry generates countless jobs across its various verticals and also the sector is a major driver for economic growth so it is  hoping to get an industry status.

To improve the significance of the housing sector sufficient steps were not taken in the Budget 2011-12 which in return gave very less to the developers and customers.

Shailesh Sanghvi, Director, Sanghvi Group of Companies said that,”We expect revision in tax for affordable housing projects in order to address the acute housing shortage in the country.”

The priority must be given to the banks who  in return offer concessional costs to the common man and also affordable housing should be considered important .

The interest subvention of 1% on home loans could be raised from Rs 20 lakh to 30 lakh.

In addition Ajmera also said that “The budget should look forward to extending the existing benefit of Section 80 IB(10) of the IT Act for developing affordable housing as the country is still in a huge shortage of tenement.”

Government must take steps which in return would be beneficial to both developers and also buyers. Real Estate sector is hoping the best from the Budget 2012.

As per the developers, Pranab Mukherjee, must present such a Budget that should bring happiness,joy and comfort to every sector.

 

 

Affordable Housing Policy to be implemented by the State Government from 15th April.

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From April 15, the state government’s affordable housing policy is set to be implemented. With a preliminary notification already out, the policy will be implemented after the final notification in a month’s time.

This decision took place at a recent meeting between Additional Chief Secretary (Urban Development Department) TC Benjamin and representatives of Confederation of Real Estate Developers’ Associations of India (CREDAI) from Pune, Nagpur, Kolhapur, Nashik and Aurangabad.

The government in the notification has made it mandatory for all projects on more than 2,000 sq m land to reserve 20 per cent of the land or constructed space for small-sized housing.

Benjamin said that, “The state has a dearth of such housing and this initiative will help bring about more such houses in residential projects. It will have to be implemented by the builders after April.”

Builders expressed reservations about whether the 20 per cent of the land should be reserved in the same area. However, it was decided that they could have a little farther but in the same zone. To this Benjamin added that, “They have to provide the housing with almost the same kind of infrastructure.”

However, most of the builders had reservations about having the economical housing on the same campus but agreed to have it a little farther away from their projects.

Pune CREDAI representative Satish Magar, who attended the meeting, said, “We are open to the policy but had some issues, which we discussed.”