Tag Archives: President

Lalit Kumar Jain: Bihar is better than Maharashtra for builders.

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When it comes to ease of approval and a good bureaucratic set up for real estate, Bihar seems to be better opportunity than Maharashtra, according to Lalit Kumar Jain, real estate tycoon and president of Confederation of Real Estate Developer’s Association of India (CREDAI). Jain was speaking to DNA against the backdrop of the first ever all India CREDAI meeting to be held in Pune from Wednesday.

“In Bihar, the bureaucratic setup to get necessary sanction allows us to complete our projects on time. Thanks to the organised system there, the end buyer also pays less for real estate compared to Maharashtra,’’ he said.

The two-day conference, will discuss amongst other things, the various challenges faced by the industry in terms of approvals, government’s decision to reserve 20%flats for economically weaker section of society and other issues.

While commenting about various problems facing the industry, Jain saidthe apparent delay in the process of getting sanctions for the projects was a major concern. “In case, the sanctions are delayed, the cost of the project escalates which results in a burden on the customer,’’ he said.

The decision of the state government to compulsorily reserve 20% of the flats for economically weaker sections of society according to Jain would be have a negative effect on the industry. “To compromise on this, the builder will pass on the cost to other buyers who will feel the pinch,’’ he said.

Real Estate Sector in Bangalore may see 25 per cent growth.

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The real estate sector in Bangalore has grown to a large extent in the past one year. In the year ahead, the city’s realty is expected to grow by 25 per cent, estimates the Karnataka Chapter of the Consortium of Real Estate Developers’ Associations of India (CREDAI).

“We are expecting the realty to grow by 25 per cent in the coming year. Last year too we have witnessed a similar growth,” said Sushil Mantri, president, CREDAI Karnataka.

As per studies conducted last year, the city is likely to absorb about 7.1 million sq. ft. of office space against a supply of 7 million sq. ft. While demand for office and commercial sales in the city saw a rise, residential sales remained slow.

Experts said that the city witnessed a great strength in high street leasing and rent, and capital value has increased nominally in a few sub-markets. Also, there was a rise in rental value as demand by retailers remained strong.

With commercial office space developers offering favourable options, predictions for 2012 are that several IT companies in the city will look at pre-leasing office space.

However, analysts opine that office space supply will outweigh demand.

“FDI in multibrand real estate is expected to catalyse a lot of demand from international retailers. International luxury brands will restrict their growth plans to Mumbai, Delhi and Bangalore,” states a projected report by Jones Lang LaSalle India, Realty Intelligence firm.

The report states that the mid-end and affordable housing segments will record healthy appreciation in capital value in short term from a low base.

 

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.”

CCI again caught DLF for imposing unfair conditions on flat owners.

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CCI has again accused DLF of imposing unfair conditions on home buyers on its high-end residential project Magnolia in Gurgaon. For this, Magnolia Flat Owners’ Association had filed a complaint against DLF Universal, Haryana Urban Development Authority and the Director Town and Country Planning, Haryana, with the Competition Commission of India (CCI).

In the report, the CCI director general found that DLF has issued allotment letters, and apartment buyers’ agreements were signed even before it got approvals from the town planner. Also, the builder has revised the building plans and applied for increasing the height of the towers after collecting 90% of the money from the buyers, and two months after the original date of delivery promised by the company.

CCI had also found DLF guilty of abusing its position at the Park Place Project in Gurgaon, where they asked the company to cease and desist from imposing unfair conditions on buyers. The order had also directed DLF to suitably modify the unfair conditions imposed on existing buyers within three months.

Drish Paul, the president of the Magnolia Flat Owners’ Association, said that “Many people are living on rent, waiting for apartments to be handed over. We would eventually like to get compensated for the loss due to the delay in completion of the project.”

In a similar order in August 2011,CCI had slapped a fine of 630 crore on DLF for unfair practices, abuse of market dominance and disregard for consumer rights in its Belaire residential project in Gurgaon.

Brokers Hunt for Jobs as Slump Hits Realty Sales

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NEW DELHI | BANGALORE: Broker in Bangalore bylane has just opened a stationery shop. He has named it ‘Smart Shop’, borrowing the name from the realty brokerage firm that he ran from the same premises until about two months ago. He switched to retail after his property business hit a rough patch following a slump in home sales. About 03-quarters of his revenues came from sale of apartments, the remaining from renting.

“With home sales dropping, it doesn’t make business sense anymore,” he says. It’s the same story in other big cities. In Mumbai, a mid-size broker has set up a small fast food joint to make ends meet. In Nagpur, a real estater has quit the real estate business and set up an ice-cream parlour. Their worries are not unfounded. While the large and established players in the property business have managed to stay, even during the slump, thousands of smaller players like brokers and agents are being forced to look for other jobs.

It also hit lakhs of people employed with such small outfits – each of which hires 5-15 people.With many brokers closing shops or reducing size, these people are out in the market, looking for jobs in sectors such as retail, banking, insurance and call centres. The real estate industry employs about 10 lakh people across the country, the majority in the unorganised sector.

In the first quarter of 2011, home sales dropped 17 per cent in Mumbai, 14 percent in Bangalore and 15 percent in Hyderabad. According to consultant Jones Lang La-Salle, unsold residential units in projects that are complete or are nearing completion in 6-12 months in Mumbai and Delhi-NCR are as high as 25 percent and 16 percent, respectively. In other big cities, including Bangalore, Chennai and Kolkata, the numbers range between 12 percent and 19 percent. Sales in tier-II and tier-III cities are steady, though there is some panic due to the increase in interest rates, which have climbed to about 11 percent from 8.25 percent a year ago.

“For smaller brokers, the impact of the current market factors is a lot more compared to the larger brokers,” says the president of the National Association of Realtors India . “Even for our members – who are fairly well-off – business is down 40 percent compared to 2009-10. But the smaller guys are in trouble and are setting up businesses that move on a daily basis. Many I know have asked their employees to look out” Ravindra Bramhe, chairman of the Maharashtra Property Brokers’ Association, says.

For whatever business is left in the market, there are hundreds of agents in queue. For instance, there are pockets on the Noida Expressway, near large projects, where real estate brokers can be seen sitting inside small tents, under the sweltering sun, waiting for business. Those who can’t afford to set up these tents can be seen on the roadside, running after every car that passes by, with brochures and flyers of projects in hand. Industry refers to them as the broker mandi. “All my friends and colleagues are now looking outside real estate before things get worse,” says Chaudhary. Many have returned to the insurance industry and others have found jobs with small call centres. A few have found employment with retail stores.

13th India Realty Expo’10 A Success

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The India Realty Expo 2010 organized by the Maharashtra Chamber of Housing Industry (MCHI) in Dubai was a great success. It was the 13th year of the realty expo and 9th consecutive year of the expo in Dubai. The exhibition held from June 3, 2010 to June 5, 2010 saw a presence of total 2847 NRI’s. The event’s success can be contributed to the fact that the exhibitors were offering ready properties or possessions between 3-6 months.

The Exhibition was inaugurated by his Excellency Mr. Naresh Mehta, Consul Commerce of India, Consulate General of India, Dubai-U.A.E on June 3, 2010.

Eighteen leading developers and builders from India including Acme Housing (India) Pvt Ltd., Akar Creations Pvt ltd., Ashiana, Delta Group, Everest Developers, Godrej Properties Ltd, Hiranandani Constructions Pvt Ltd, Kolte-Patil Developers Ltd, Marvel Realtors, Nahar Group, Nyati Group, Our Town, Pathy Housing, Runwal Group, Rustomjee, Uma Constructions- represented by United 4 realtors participated in the exhibition.

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Photo by vasofoto.comMr. Sunit Mantra, President MCHI said on the occasion, “Looking at the factors such as attractive prices of Indian Real Estate as compared to Dubai coupled with a lackluster trend in local markets there, turned out a bonanza for the Indian realtors exhibiting their properties in the Dubai exhibition with investors and genuine buyers visiting in large number this year.”
The Hon. Secretary, MCHI, Mr. Deepak Goradia said, “We have seen tremendous response and turnout for the exhibition this time. Projects in Andheri, Powai, Navi Mumbai, Kandivali, Borivali, Bandra, Ghatkopar, Thane from Mumbai and other cities such as Bangalore, Goa and Pune received a lot of enquires for residential flats. Quality of visitors was good and mostly they were affluent, focused and high end consumers. Moreover visitors showed interest in 2/3 BHK flats ranging from 60 lacs to 1 cr.”

The Indian Real Estate Industry has only reasons to cheer in the time to come.