The main reason that the Indian real estate market finds itself in trouble today is that prices have become unaffordable, even for most professionals. The underlying reason for this is an artificial scarcity of land in our cities
The resultant shortage of land where apartments, offices and shops can be built inflates prices. Today, as demand starts to weaken across property markets countrywide, we need to think of ways to build really affordable real estate.
The lack of cost-effective housing is one of India’s most pressing developmental problems. According to official figures, India faces a shortage of around 18.78 million homes, of which 10.55 million are required for the economically weaker section (EWS) and 7.41 million for the lower income group (LIG) section.
While the low-cost housing segment has got some boost in the last few years—primarily after the contraction of the housing market in 2008-09—there is still a long way to go and there is a need for comprehensive steps from the government.
The purpose of the MoU is to jointly enhance and promote the adoption of energy efficient and green homes concept in India. The MoU signed in presence of Arun Kumar Mishra, secretary of the Ministry of Housing and Urban Property Alleviation, was inked between chairman of IGBC Prem C Jain and NHB executive director Arnab Roy.
Land for developing a second home is a segment that is gaining transparency. Transparency is a key factor when it comes to this segment and here, the industry has been making concerted efforts to raise the bar. Setting new benchmarks for the industry has been the key to the evolution and growth of this section of the market.
Location is equally important if one wishes to buy land to use in a retail venture or a manufacturing unit, since such ventures are dependent on the immediate access to a customer attachment and man power sources.
India offers a wide range of real estate options for various budgets, with improved quality and features of properties. Currently the larger cities like Mumbai are witnessing a slump in sales forcing the developers to offer good deals. “There is a possibility of two-fold benefits for the NRI investors – the current weakening of Indian rupee is expected to be short-lived phenomenon, and once the Rupee starts appreciating, the investor will get more dollars for the same investment in rupees. Secondly over the mid-long terms (three-five years), property prices in India will appreciate considerably, thus giving good returns to investments,” said Mr. Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India.
At the Real Asset Conference held in association with moneycontrol.com, on 19th March, Mr. Chinmay Gersappa, GM, Corporate & Residential Sales, Rustomjee spoke on the Real estate asset class, that was followed by a panel discussion with eminent personalities from the Real Estate industry.
About Rustomjee, Mr. Gersappa comments that it is a predominantly Mumbai based developer, the company’s expertise is residential development, although Rustomjee has also undertaken resi-commercial, retail, across all the regions, but have a strong focus on residential spaces.
The panel discussion was moderated by Mr. Santosh Nair – Editor, Moneycontrol.com and joined by experts like – Mr. VK Sharma – CEO, LIC Housing Finance, Mr. Neeraj Bansal – Director (Risk Consulting), KPMG, Mr. Balaji Raghavan – CEO, IndiaInfoline, Mr. Sanjeev Dasgupta – President, ICICI Ventures (Real Estate) and Mr. Abhishek Kapoor – CEO, Rustomjee Urbania.
The discussion covered varied topics on the Real estate industry, trends and the issues and opportunities in the real estate sector. The Real Asset panel discussion focused on serious issues like affordability, assured return schemes being offered by developers and key regulatory changes required that need to be tackled for smooth functioning of the real estate industry.
Mumbai has been revealed as the favourite spot for Indian expats in the UAE to buy property, despite the city’s soaring home prices, according to a new survey.
Thirty one per cent of Indians in the UAE said that Mumbai was their preferred destination for property investment in India, the results of the Indian Property Show survey released yesterday revealed. About 14,000 Indian expats in the UAE participated in the survey.
“Despite being the ‘highly unaffordable’ place, even for the upper middle income group back home, Mumbai has become a top choice for non-resident Indians [NRIs] in the UAE for investment in the real estate sector,” said Sunil Jaiswal, the chief executive of Sumansa Exhibitions, which organises the Indian Property Show, to be held in Dubai this month. Home prices in Mumbai have increased by 66 per cent over the past four years, according to a recent report by Jones Lang LaSalle.
For Somesh Vaidya, who shifted to Virar from Borivili, it was a decision he would not regret. The area has excellent connectivity, more open space and social infrastructure is no less compared to the other suburbs. Another added advantage of buying property here is its easy accessibility to Mumbai via the Western Express Highway, which is just five kms from the area and the Metro is only in three kms. The roads are also constructed well and are in good shape.
Being the first station on the western railway’s suburban line, people get the benefit of travelling through local trains. It is the only station, which isolates Mumbai from other locations like Vaitarna, Safale, Kelwe, Palghar and Boisar.
Real estate has been booming because of players like Rustomjee, Ekta World, Bhoomi Group, Poonam Group, which have many good projects in the area. In the next two-three years, Virar is being considered as a major development city. Experts believe that if one is on a lookout for affordable housing projects, low- and high-yield investment near Mumbai, Virar is a good option. One room kitchen, one-BHK and two-BHK flats in Virar are come at a reasonable price bracket of Rs 15-30 lakhs, while the prevailing rates are Rs 3,250-5,500 per sq ft. The built-up area of a one room kitchen is about 350 to 450 sq ft and a one-BHK unit here is about 520 sq ft and two-BHK is 760 sq ft.
NRIs have always been opportunistic in terms of investment avenues and returns. The government regularly comes up with new schemes to attract more and more investments from abroad. Real estate is one of the sectors which always grabs the attention of non-residents.
The Reserve Bank of India has also given permission to all non-residents who possess Indian passports as well as people of Indian origin to put their money in the real estate sector (residential as well as commercial property). The number of NRIs investing in real estate is increasing fast as the value of the rupee is depreciating and real estate offers better returns. A place in the homeland usually gives a sentimental support and sense of security, which is the other reason of investment in real estate by NRIs.
Rustomjee Athena, at the 127 acre township in Thane – Rustomjee Urbania
In a good start to 2013, Mumbai’s real estate market saw its highest January sales registrations compared with January 2012 and 2011, indicating some pick-up in sales of houses, which remained sluggish over the last two years.
According to real estate industry experts, the December registration numbers are traditionally higher as customers flock the market to close their transactions to avoid paying higher stamp duty and registrations charges, which get revised every year in January with changes in Ready Reckoner rates announced by the state government.