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

Budget 2017 analysis: Experts believe middle-class home buyers have been ignored | Housing News

https://housing.com/news/budget-2017-analysis-experts-believe-middle-class-home-buyers-ignored/?utm_source=housing-existing&utm_medium=email&utm_campaign=news-digest-4february2017

Budget 2017 analysis: Experts believe middle-class home buyers have been ignored

While the finance minister made several announcements for the affordable housing segment in the Union Budget 2017-18, we look at whether these will have any meaningful impact for the average home buyer

By Amit Sethi•February 2, 2017

While the real estate fraternity has largely welcomed the announcements in the Union Budget 2017-18, certain sections in this sector, apart from the affordable housing segment, as well as buyers, are still trying to figure out whether it will benefit them in any way.

"The entire focus of the budget has been on the low-income group (LIG) and affordable segment. All the other segments have largely been neglected," laments Rohit Gera, managing director, Gera Developments and VP of CREDAI – Pune Metro. "Indirect benefits may probably accrue, through additional disposable income in the hands of the SME segment, on account of the reduction in the income tax rate to 25%, for them. Time-bound incentives, including enhanced interest deduction for a limited period, could have helped the other segments in the real estate market," says Gera. However, this has not happened.

Budget 2017 ignores middle-class buyers

Experts maintain that while the middle-income group (MIG) home buyers may get some indirect benefits from the announcements made in Budget 2017, no direct assistance was announced for the middle-class.

The finance minister has not catered to the wants and needs of the middle-class tax payers, who have been impacted the most, by the recent demonetisation drive, feels Amit Wadhwani, MD, Sai Estate Consultants. "No relief in service tax and VAT, was a dampener for this class. The onus of filing TDS remains on the end-users for every property transaction. This should have been the builder's responsibility, as many ignorant consumers miss deducting TDS and end up paying penalties. The focus has been only on affordable housing, but housing remains unaffordable in the top four cities. An additional surcharge of 10%, for income between Rs 50 lakhs to Rs 1 crore, will also hit the upper middle-class tax payers, who may resort to tax evasion methods," he adds.

See also: Here's why infra status to affordable housing may not mean cheaper homes in the metros

More positive steps needed, say developers

Analysts say that if the government announces some positive steps for segments other than affordable housing after the budget, then, it may boost these segments. "There is not much for the luxury segment from the budget. However, if further interest rate deductions happen over the next couple of quarters, it will boost the luxury segment, as well," opines Dharmesh Jain, chairman and managing director, Nirmal Lifestyle.

While the budget has confirmed the roll-out of the GST, it refrained from touching upon multiple taxation under REITs, which could have provided an additional funding avenue for developers focused on the middle and premium-ends of the spectrum.

No relief in stamp duty payments and other taxes

Although recent government budgets have shown sincere appreciation for housing issues, the 2017 fiscal policy should have been more realistic, maintains Manju Yagnik, vice-chairperson of the Nahar Group. According to her, the restriction of 30 sq metres on unit sizes, makes it impossible to achieve affordable housing in metros. "Affordable housing has been given a boost. However, the MIG and luxury home buyers have been completely ignored. Neither is there any ready inventory from the MIG standpoint, nor are there any tax benefits. So, this will not even attract investors. The budget also fails to address stamp duty, surcharge, corporate taxes and other issues. There is no privilege for the investments that buyers make in this segment," Yagnik explains.

Announcements that will benefit home buyers

The change in the base year for indexation, from April 1, 1981, to April 1, 2001, for all classes of assets including immovable property, may motivate some buyers to invest in this market. Another small relief, has been the reduction in the holding period for calculating long-term capital gains, from three years to two years and some relief on capital gains taxation. This may help home buyers looking to liquidate their property, as they will incur lower taxes, because of the indexation benefits available on long-term capital gain.

Www.arundevelopers.com

Tax relief may spur joint developments in realty, Real Estate News, ET RealEstate

http://realty.economictimes.indiatimes.com/news/industry/tax-relief-may-spur-joint-developments-in-realty/56945659

Tax relief may spur joint developments in realty

MUMBAI |BENGALURU: Realty projects undertaken through joint development agreements are expected to get a shot in the arm with a Budget proposal on tax liability kicking in only on project completion. With land cost making up 30-50% of the total expenditure for any realty project, this will help in prompting land owners and developers inking more such pacts.

Several developers are already taking this capital-light approach for future projects, given that price expectation of land owners continue to remain high. The measure will help in creating more demand for land assets for future developments.

"Changes in the taxation aspect of JDA (Joint Development Agreement) will greatly encourage more land owners to partner with developers that will benefit the real estate developers and in turn likely to benefit end consumers," said Shishir Baijal, CMD, Knight Frank India.

In Mumbai, the country's most expensive property market, land cost usually comprises half of the project cost and this has been prompting developers to move towards a capital-light growth approach.

"As per the Budget proposal, the tax liability will get shifted towards the end of the project and that removes the hindrances in unlocking more land parcels for development though joint agreements. It allows the project to manage its cash flows in a more optimal way. Better project cash flows will also help homebuyers get better deals and pricing," said Ashish N Shah, chief operating officer, Radius Developers, one of the most active developers using such partnership models.

In a bid to achieve its state objective of Housing-For-All by 2022, the government has announced a slew of measures under the Union Budget to boost housing supply. The Budget's tax-related proposal for joint developments is also aimed at prompting developers to build affordable houses and undertake more such projects.

"The reforms pertaining to various taxations for the real estate sector is a move in the positive direction. Amendment with respect to capital gains tax shall bring in more certainty and predictability to the sector. This along with the reduction in the holding period will further enthuse market sentiment," said SK Sayal, MD and CEO, Bharti Realty.

Along with property markets such as Mumbai and the National Capital Region, other key markets like Pune and Bengaluru are also likely to see execution of more such agreements.

"Bengaluru is one of the markets that have seen most number of joint developments. The clarity on tax structure will boost development and also make available many more properties for joint development. Earlier landlord had to pay tax to the state government before entering into a joint development," said Bijay Agarwal, MD Salarpuria Sattva Group, that has over seven joint development properties under execution in the southern city.

Taxation of such pacts was earlier open to interpretation on whether it involves transfer of immovable property. Many landowners then used to convert their land parcels into stock in trade and used to take a view to pay business tax based on the percentage completion of the project. However, this would change now.

Www.arundevelopers.com