tax benefit to first-time home buyers to be a game changer: nandita chatterjee, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/regulatory/tax-benefit-to-first-time-home-buyers-to-be-a-game-changer-nandita-chatterjee/57177944

Tax benefit to first-time home buyers to be a game changer: Nandita Chatterjee

The secretary said the scheme is expected to be notified shortly and will be effective from January 1, 2017.

NEW DELHI: The government will give a benefit of `. 2.4 lakh to first-time home buyers with taxable income below Rs 18 lakh a year, which would be a game changer for the sector, Housing and Urban Poverty Alleviation Secretary Nandita Chatterjee said.

The amount is equivalent to the total interest subsidy over a 20-year loan and will be given upfront to the housing financing company, through nodal agencies such as National Housing Bank and Hudco to reduce the outstanding loan.For a 15-year loan, the value of the benefit would be Rs 2.2 lakh.

The secretary said the scheme is expected to be notified shortly and will be effective from January 1, 2017. "This is the first time we are talking about the middle-income group. We were hoping that this scheme would be a game changer," Chatterjee told a gathering of real estate developers and housing finance executives at the ET Roundtable on Housing for All.

Industry executives agreed. PNB Housing Managing Director Sanjaya Gupta said this would make projects affordable as EMI fall.Amit Bhagat, CEO of ASK Property Investment Advisors said: "The move will increase the affordability and eligibility of more than 90% home buyers as taxable income of . 18 lakh is significantly on the hig` her side."

The Pradhan Mantri Awas Yojana announced by Prime Minister Narendra Modi on December 31 gives homebuyers subsidy at different rates depending on their income.

For annual income below Rs 6 lakh, the subsidy is 6.5 percentage points on a principal component of Rs 6 lakh, regardless of their total loan. For income up to Rs 12 lakh, the subsidy is 4 percentage points on a principal component of Rs 9 lakh, and the highest income category, up to Rs 18 lakh, its 3 percentage points on a principal component of Rs 12 lakh. "For the last two years, the government has been trying to make an environment where affordable housing can be pushed ahead. Affordable housing has become an important sector," Chatterjee said.

Industry leaders said infrastructure status for affordable housing would ensure easy access to capital for such projects. "The infrastructure status makes life easier for us. The interest rate subvention will kickstart the demand," said Manoj Gaur, MD of Gaursons.

Getambar Anand, chairman, ATS Infrastructure, said there was a lot of ambiguity in defining affordable housing and said a uni form definition was needed.

HDFC's Sanjay Joshi said home loans should also cover stamp duties which are10% of the cost. "It will make it very easy for homebuyers to acquire property since there will have easy access to funds," he said.

SD Gupta of International Finance Corporation said housing finance firms needed more long-term funds from banks to meet the huge requirement of affordable housing.

Developers such as Stellar Group's Akshay Sethi said the government must define `carpet area' that qualifies for affordable housing in various metros. Eldeco MD Pankaj Bajaj echoed the view and added: "Developers should not be forced to use 90% of the Floor Area Ratio (FAR) if he is willing to give it up."

Emaar Group's CEO Sanjay Malhotra sought harmonising of centre's and states' regulations. "There exists a lot of dichotomy between the Centre's directions and the way states act. Developmental restrictions like size of the housing project in a lot of states create anomaly in the market," he said.

Shrikant Paranjape, chairman, Paranjape Schemes (Construction), said the government should help reduce construction costs and suggested SEZ-like structures for affordable housing. "When it comes to real estate developers, cost of land is insignificant for affordable housing. We want to reduce the cost of construction," he said.

Mahendra Singhi, group CEO, cement, Dalmia Bharat Cement, and Sanjay Kumar Gupta, chief marketing officer, Ambuja Cements, proposed the Mexican model of setting up an SPV with private players, states, developers and other stakeholders for affordable housing.

Gourav Bhutani of Shapoorjii Pallonjii said the approvals process are lengthy and costly, which would obstruct the goal of housing for all by 2022.

Arun Gupta

Move Over China: India's the Best Place to Invest Right Now - NASDAQ.com

http://m.nasdaq.com/article/move-over-china-indias-the-best-place-to-invest-right-now-cm748037

Move Over China: India's the Best Place to Invest Right Now

Zacks.com

• (1: 30 ) - Apple to begin iPhone manufacturing in India
• (6: 15 ) - Tesla speculates opening the doors into India's Market
• (9: 15 ) - Internet Expansion in India       
• (13: 35 ) - Amazon's Big Investment into India
• (21: 30 ) - India's influencing infrastructure
• (25: 25 ) - Stock Re-cap

Welcome to Episode #70 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Neena Mishra, Zacks Director of ETF Research and also the editor of Zacks Income Investor .

But she's not on the show this week to talk about ETFs or income stocks. No, she's joining Tracey to discuss a far more important topic: the investing opportunities in India.

Neena just returned from a trip to India where she noticed that there was a lot more optimism about the economy.

Prime Minister Modi has been trying to institute economic reforms to open up India's economy, which has been notoriously closed off to foreign investment. Given the developments over the last few years, it looks like he is succeeding.

While many American technology and social media companies are shut out of China for various reasons, India has seemingly opened its doors. With 1.2 billion people, and growing, many companies would love to tap that consumer base.

With one of the largest populations of Millennials in the world, and a growing middle class, 2017 could be the year of India.

Tracey and Neena discuss 5 ways in which investors can invest in India's rising economic power, without even leaving the shores of the United States.

5 Stocks to Play the Indian Growth Story

1.     AppleAAPL only has 2% of India's smartphone market. Estimated at 300 million, and growing, that's just a small sliver of the market. But until 2017, it hasn't been able to open Apple retail stores in the country. Thanks to a deal to manufacture the phones in India, which will bring costs of the phones down for consumers, Apple could soon be tapping India's growing elite.

2.    TeslaTSLA appears to be poised to enter the India market after CEO Elon Musk tweeted out in February 2017 that it is looking to enter India in mid-2017. There are also rumors that a long-awaited Tesla Asia manufacturing plant may get the green light in India, instead of China. Stay tuned.

3.    FacebookFB has long been shut out of the massive Chinese market, but that's not the case in India. One problem in India, however, has been the poor Internet infrastructure. There are just 250 million data subscribers, although that number is growing quickly. In 2016, Facebook tried to give away the Internet in India but was shot down by the government. However, data companies have been quickly expanding which is helping Facebook's reach. In the fourth quarter of last year, India was Facebook's fastest growing market.

4.    AmazonAMZN has put the most on the line in India as it has already spent about $5 billion to expand its fulfillment centers and delivery service in the country. Amazon Prime has launched in 100 cities. 10% of India's population speaks English, which makes it the second largest English speaking country, after the United States, in the world. It's facing competition, however, from Alibaba and homegrown FlipKart and Snapdeal. But it has launched Amazon Video and a recent 3-day Great Indian Sale saw sales growth surge over 200% compared to a regular shopping day.

5.    NetflixNFLX has an aggressive international expansion plan, and it includes India. In December 2016, just as Amazon Video launched, Netflix announced a partnership with Bollywood movie star and producer, Shah Rukh Khan. Right now, Neena says Netflix is charging around $10 a month for its streaming service. That is high for India. But, again, companies are looking at the growth potential.

What else should you know about India and investing in its hot growth story in 2017?

Find out the answers to this and more on this week's podcast.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

pune international airport project to get dpr consultant soon, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/infrastructure/pune-international-airport-project-to-get-dpr-consultant-soon/57119246

Pune International airport project to get DPR consultant soon

The DPR, once ready, will be sent to the state government for approval.

PUNE: The Maharashtra Airport Development Company Limited (MADC) will select a consultant to prepare a detailed project report (DPR) for the Pune international airport project by this week.

MADC vice chairman-cum-managing director Vishwas M Patil confirmed as much in reply to a text message. As per officials, the state government is just waiting for the completion of the municipal elections.

"The consultant will tell us the exact cost of the whole project. Once the consultant is finalized, work will start immediately. The DPR should be ready in 4-5 months," Patil told TOI.

The DPR, once ready, will be sent to the state government for approval.

With the model code of conduct being enforced for the elections, the district administration had put on hold announcement of a compensation package for the landowners in Purandar taluka.

"The delay gives the authorities more time to study the package and carry out more surveys if necessary," a district official said, adding that the package should be announced in the first week of March.

"The exercise talking to landowners will be started again. Simultaneously, the administration will initiate the process of land acquisition. There will be some teething issues, but the project will not be affected," the official said.

Www.Arundevelopers.com

soon, you will get lower loan rate with home cover, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/residential/soon-you-will-get-lower-loan-rate-with-home-cover/57118174

Soon, you will get lower loan rate with home cover

Now, a retail borrower pays an equated monthly instalment or EMI of Rs 874 at 8.6% for one lakh rupees loan amount taken for 20-years.

MUMBAI: Home buyers may soon get cheaper credit or more loans. All they need to opt for is property insurance.

National Housing Bank, the regulator for housing-finance companies, is working on a broad framework with the Insurance Institute of India, which could reduce home loan rates by about half a percent if borrowers opt for an insurance cover, aimed at mitigating default risk as well, said two sources familiar with the matter.

"We are conducting a survey in association with the Insurance Institute of India to assess the feasibility of calamity (property) insurance," Sriram Kalyanaraman, national director & chief executive officer, NHB, told ET confirming the matter.

"We are examining if taking an insurance cover while buying a home loan can lead to lower lending rates," he said.

"An insurance cover should bring down the risk premium, which lenders can pass on to consumers. Going forward, we would come out with a broader framework once the exercise is over."

Now, it is a common practice among housing finance companies to offer property insurance to borrowers taking home loans.

For example, largest mortgage lender Housing Development Finance Corporation (HDFC) offers HDFC Ergo products for nonlife including property insurance. Dewan Housing Finance Cor poration (DHFL) sells Cholamandalam MS General Insurance products through its various branches.

Customers prefer low-cost premium to higher coverage.Normally, property insurance shields potential financial losses arising out of any earthquake, flooding, act of terrorism, accidental firedamages, cyclones, lightning strike, vandalism.

On many occasions, banks and financial institutions compel their customers to buy property insurance, it is alleged.

The recent natural calamities in Bihar, Jammu & Kashmir, Uttar Pradesh, Uttrarakhand, Gujarat have emphasised the importance of property insurance as the risk mitigation instrument to reduce the loss to the stakeholders.

"Half of the exercise is over.Although it is not yet concluded but the cost benefit could be about half a percent," said an executive associated with the matter.

Now, a retail borrower pays an equated monthly instalment or EMI of Rs 874 at 8.6% for one lakh rupees loan amount taken for 20-years. Going by 50 bps cut in rates, the home loan customer will pay Rs 842 for the same loan, show an estimate by ICRA, a credit rating company .

Karthik Srinivasan, senior VP , ICRA, said: "Such measures, if finalised, should help borrowers.While it would potentially benefit them in improving the risk profile, their loan eligibility too may expands either through lower rates or more credit. The cost of the insurance cover is likely be borne by borrowers but still it will benefit home buyers as it could be nominal compared to higher rates."

Transparent and seamless transaction system in property insurance will provide more confidence to consumers, lending institutions like banks, housing finance companies; and insurers, and promote voluntarism on property insurance, NHB said.

Arun Gupta

These cities may beat the realty slowdown sooner than others… | Housing News

https://housing.com/news/cities-may-beat-realty-slowdown-sooner-others/?utm_source=housing-existing&utm_medium=email&utm_campaign=news-digest-11february2017

These cities may beat the realty slowdown sooner than others…

While real estate markets throughout the country are in the midst of a slowdown, some cities may emerge from this scenario sooner than others. We look at the cities that hold the best potential for investors

By Amit Sethi•February 7, 2017

The government's recent demonetisation move, is likely to result in a steep correction in real estate prices across the country, making it a good time to buy property. However, if you are eyeing the top Indian cities for this purpose, it may be worth noting that certain 'dark horses' (or smaller cities) in the realty market, could emerge from the slowdown much before the bigger cities.

"If we look beyond the state capitals and 'smart cities' identified by the government, smaller cities like Coimbatore and Kochi, which have a good saturation of IT professionals and enough IT/ ITeS companies, can be considered," says Santhosh Kumar, CEO – operations and international director, JLL India, as these cities will develop rapidly. "Non-metro cities will develop, in accordance with how their local governance bodies perform and the speed with which they implement government programmes. Cities like Nagpur, Jaipur, Surat and Indore, are coming to prominence on this front," he elaborates.

Hyderabad, Nagpur, Kochi and Jaipur, are witnessing significant investment in urban infrastructure.

See also: Emerging locations in the top 5 metros

This creates opportunities for investment in properties in the fringes of these cities. Moreover, with metro rail networks being commissioned, real estate prices in these cities are likely to increase.

Why smaller property markets may perform better than the major cities

In the past, HNIs and institutional investors, only looked at metropolitan cities. This is because these cities have displayed the maximum growth, in terms of employment generation and therefore, commercial and residential real estate absorption. However, this scenario is now changing, especially after the government announced the 'Smart Cities' programme, which is aimed squarely at helping smaller cities to grow faster.

"Kochi, Nagpur and Hyderabad, have the advantage of comparatively cheaper land prices and a considerably well educated workforce. Also, the central location of Nagpur and Hyderabad, make them cities that would benefit the most from GST, resulting in increased warehousing and light manufacturing activities," explains Saurabh Mehrotra, national director – advisory, Knight Frank (India) Pvt Ltd.

High-potential real estate markets in smaller cities

Jaipur: The government has unveiled numerous initiatives, to develop the infrastructure in Jaipur. The city's residential and retail real estate markets, have seen healthy growth and it is now among the most vibrant real estate destinations in north India. Areas like Malviya Nagar, Tonk Road and Ajmer Road, are witnessing high demand from end-users and investors.

Kochi: Kochi has transformed into a preferred real estate destination, owing to its rapid IT sector development and corresponding employment generation. Metro rail connectivity, its recent inclusion in the Smart Cities list, the fact that it has a major port to boost industrial and commercial growth, as well as international air connectivity, its ability to attract foreign investment and tourism for the hospitality industry, have all aided the city's growth.

Hyderabad: Hyderabad is among the most affordable tier-1 cities. Even in well-developed areas like Kukatpally, Manikonda, Sainikpuri and Miyapur, residential property prices are in the range of Rs 35-50 lakhs. Overall, housing prices in Hyderabad are almost 60% of the prices seen in Bengaluru and Chennai.

"Nagpur, Hyderabad and Kochi, witnessed heightened activity about four to five years ago. However, subsequently, these markets went into a lull due to various reasons – Hyderabad due to Telangana, Nagpur due to the lack of manufacturing activities and Kochi due to a slowdown in NRI investments. However, over the last one-and-a-half years, most of these factors have eased out and these cities have again become attractive for investments," concludes Mehrotra.

"All realty markets in India will experience pain to some degree or the other, due to the demonetisation move. There will be a shakeup in all markets but the end-result will be cleaner and more streamlined realty sectors in every city"- Santhosh Kumar, CEO – operations and international director, JLL India.

Arun Gupta

Manish Sisodia: Land, real estate should be brought under GST, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/regulatory/land-real-estate-should-be-brought-under-gst-manish-sisodia/57061347

Land, real estate should be brought under GST: Manish Sisodia

NEW DELHI: Land and real estate should be brought within the Goods and Services Tax (GST) regime and consumer durables should be taxed at the lowest slab to make the new indirect tax regime consumer friendly, Delhi Deputy Chief Minister Manish Sisodia said today.

The Minister assured industry chambers that he would take up the aforesaid issues in the forthcoming GST Council meeting as keeping land and real estate being outside purview of GST and that higher taxation slab for consumer durables would kill its basic purpose, a PHD Chamber release said.

Addressing a seminar on GST, Sisodia said dual control of GST also defeated its intended objectives and sought more intense consultations on the issue in future course of GST Council, arguing that the objective of the GST should be consumer and traders oriented and it should not entirely aim at raising taxation with higher rates.

"I fought tooth and nail for inclusion of land and real estate within the ambit of GST but somehow there couldn't be an absolute consensus on the issue at number of GST Council Meetings of all the States Finance Ministers because of obvious reasons," Sisodia said.

"Consumer durables such as TV, Mobiles, electric appliances and host of similar such articles should not be taxed luxuriously. That is our view and we will continue to articulate them whenever necessary in the interest of Aam Aadmi though the GST tax rates have yet to be finalized," he said.

CBEC Chairman Najib Shah asked the industry not to keep seeking exemptions under the GST regime as most of such exemptions would go away after it is put in place.

The Chairman also clarified that the anti-profiteering clause in GST Law is there as an enabler and industry should not read too much on it, promising that post GST host of indirect taxes would subsume in it making the new law user friendly, the statement said.

Www.arundevelopers.com

these 7 realty stocks generated up to 421% return in last 5 years, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/industry/these-7-realty-stocks-generated-up-to-421-return-in-last-5-years/56999324

These 7 realty stocks generated up to 421% return in last 5 years

With FM Arun Jaitley batting for affordable housing, the sector is all set to get a lease of life, and the performing stocks may continue to do well.

NEW DELHI: The real estate counter might be perceived as one of the worst places to bet on, but there are stocks within that space that have offered spectacular returns over the past five years.

Some of the stocks have even managed to generate returns as high as 400 per cent, or five times, the initial investment. With Finance Minister Arun Jaitley batting for affordable housing, the sector is all set to get a lease of life, and the performing stocks may continue to do well.

Data available with corporate database Capitaline showed shares of Delhi-based Ashiana Housing have surged five times, or 421 per cent, in last five years. The increase in Budget allocation towards Pradhan Mantri Awaas Yojana to Rs 23,000 crore from Rs 15,000 crore is seen as a positive for players such as Ashiana Housing with presence in the small ticket segment.

Kolte Patil Developers has seen its shares rise from 35 apiece to Rs 102.80 apiece, registering a 191 per cent surge in last five years. The company is likely to gain from the Budget proposal to accord infrastructure status to affordable housing.

Ahmedabad-focused Radhe Developers has seen a 154 per cent jump in share price in last five years. Prestige Estates, Ansal Housing TCI Developers and Phoenix Mills have doubled investor money during this period.

HDFC Securities believes Prestige Estates, Kolte Patil and Ashiana Housing are likely to be key beneficiaries of the changes in the scheme for profit-linked income tax deduction for promotion of affordable housing. Under the scheme, the carpet area will be counted, instead of builtup area of 30 and 60 sq metres for tax deduction.

"The government has understood the pains of the industry. It has taken a decision to give infrastructure status to affordable housing. This will certainly give a boost to affordable housing. More so the definition of affordable housing itself has been changed to 60 square metres carpet area and 30, of course, in the four metros," said Irfan Razack, CMD, Prestige Estates

Since their January 2008 peak levels, many real estate stocks have seen prolonged multi-year corrections, with some of them even falling up to 90 per cent.

In just five years, sectoral leaders such as Unitech and DLF have lost 81 per cent and 37 per cent, respectively, of their market value. Puravankara, Anant Raj, DB Realty and HDIL are other notable real estate stocks which are trading about 20-30 per cent lower from the levels where they traded five years ago. Returns are even poorer when one takes an extended period.

But with the government announcing a number of sops for the real estate sector, it is likely to get a lift after the cash ban in November hit the already-battered housing market hard.

"Changing the definition of affordable housing from built-up area to carpet area will give the much-needed boost to the realty sector, as most projects outside the periphery of the metros will now fall in that bracket and increased tenure to avail the benefit of 100 per cent deduction is a huge positive for the realty sector as a whole. The Budget is positive for Ashiana Housing, Kolte Patil, Brigade Entreprise, Prestige Estate projects and Mahindra Lifespaces," said Angel Broking.

The brokerage, however, said the near-term upside of these stocks might be capped as they have already moved up substantially. There has been an increase in the tenure for completion of projects from three to five years from the date of commencement to avail 100 per cent tax deduction for profit. This is seen as a positive for all real estate developers.

A one-year breathing space has been provided to builders for liquidating their inventory before being taxed on notional rental income. The base year for indexation is now proposed to be shifted from April 1, 1981 to April 1, 2001 for all assets, including immovable property.

Arun Gupta