Tag: India Properties

Housing starts slow down in Chennai, Bangalore & Kolkata

Housing starts in large cities such as Kolkata, Chennai and Bangalore have slowed down, according to the Housing Start-Up Index, a new indicator of housing construction, released by the Reserve Bank of India and the Ministry of Housing and Urban Poverty Alleviation (MHUPA) on Monday. However, in cities such as Ahmedabad, Bhopal and Hubli, housing starts have increased.

This index, first of its kind in India, provides an indication of how many building permits were issued in a given period, and how much of them were started and when.

An increase in the number of housing starts, as the report accompanying the release describes, indicates improvement in demand and investment. This index is critical for both property developers and policy-makers. So far, about six countries such as the United States and Japan had developed such an index. In the last few years, the RBI and the MHUPA have been trying to develop one for the country. Though , methods for developing it were recommended way back in 2009, the pilot study was taken up only recently.

The pilot study of 27 cities, which focussed on building permits issued between 2007 and 2011, shows that most of the construction started in the same quarter as the building permission was granted. The delay in commencing house construction at the most stretched to a year. The new data confirm that increasingly more multiple housing units (MHUs) are being constructed. The bulk of the building permission given in 27 cities pertains to MHUs.

The southern region witnessed high house starts in 2009, but slowed down in 2011. But, the western region showed a high start in 2011. The overall reduction in the construction activity in the country coincides with the low GDP growth between 2009 and 2010.

The RBI will publish the housing starts index every three years based on the data collected by the National Buildings Organisation and the National Sample Survey Office.

The government plans to extend the study to 300 cities, and develop the house start index for each of them.

Source: thehindu.com

Real estate related cases highest at consumer court

GURGAON: In a city which boasts of highest number of consumer grievances in the state, cases of insurance default and real estate invariably occupy the top slot.

The Times of India get a large number of cases related to real estate. The number of consumers approaching us for non-delivery of flats in times has been increasing. We have a number of cases of cheating by the builders. This includes even the top builders in the city. We have several cases of builders who are repeat offenders. We have issued arrest warrants against them as well,” said an official of the Gurgaon district consumer disputes redressal forum.

The official said consumers also approached the forum with complaints against HUDA relating to disputes of plots.

“In Gurgaon, consumers are more educated about their rights. Of late, we have solved several cases relating their real estate,” said Raghvinder Singh Bahmani, president, district consumer disputes redressal forum, Gurgaon.

Consumer disputes relating to airlines and travel tourism, especially holiday clubs and resorts, is also higher in Gurgaon compared to cities in the state.

“The reason is that large number of technocrats, CEOs and top MNC officials keep visiting different countries. Case relating to airfare, baggage and deficiencies of the services of the resorts are much higher in Gurgaon. We have 19 cases relating to airlines and several cases against top resorts in the country,” said an official from the forum.

Cases relating to mobile phones, automobile, Bank ATM and Postal Delivery are also higher in Gurgaon compared to cities in the state.

Source: The Times of India

Make security measures must in buildings: Citizens

PUNE: Over 15,000 citizens, including members of civic organizations and political parties, have asked the Pune Municipal Corporation (PMC) to amend the draft Development Control (DC) rules to make security measures mandatory for new and existing buildings in the city in the wake of recent terror attacks.

The views were received through suggestions and objections to the draft Development Plan (DP) for old city areas.

“Pune is vulnerable to terrorist attacks. The state government’s suggestions, which recommend setting up security outposts, fulfilling fire safety requirements and constructing blast-resistant buildings among other things, need to be implemented. Neither the DP nor the DC rules suggest enough steps to meet these requirements,” stated a suggestion.

Following the blast at German Bakery in 2010, the PMC officials had said that the civic body would amend the DC rules making it mandatory for existing and new buildings to have security measures in place. However, no steps have been taken so far.

“Pune is no longer insulated from what’s happening around the world. First it was the attack on German Bakery and then multiple blasts happened on JM Road. Out city faces major security concerns. We insist that the PMC amends the draft DC rules and make required provisions to tackle such attacks on establishments and citizens,” said Rajya Sabha member and NCP city chief Vandana Chavan, adding that the NCP has incorporated this demand in its suggestions and objections document.

A few years back, the state government had appointed an expert committee under former principal secretary of the public works department M V Merani. The panel suggested certain regulations to be followed to ensure better safety in and around buildings. The special regulations envisage security outposts, approach roads with sufficient restraints to prevent direct movement of vehicles towards structures, a control room for security and electronic surveillance operations, light controls, fire-safety requirements and buildings with blast-resistant designs.

The Merani committee’s suggestions were discussed by party leaders in the PMC following German Bakery blast in 2010. One of the suggestions was to make it mandatory for developers to provide their own security set up and make it mandatory for them to submit a security plan with the building permission proposal.

A PMC official admitted that no concrete steps have been taken because the corporators and the civic administration have failed to reach any logical conclusion on the implementation mechanism to be followed.

“The panel appointed to hear suggestions and objections to DP should consider views that recommend improvement in security set up of the city. It is necessary to protect lives of common citizens,” said Ramesh Punde, a witness to blasts on JM Road last year.

City engineer Prashant Waghmare said, “The Merani committee’s suggestions are for public places. However, the PMC has already made it compulsory for housing societies to install CCTV cameras. The PMC will make every possible effort to ensure that security measures are incorporated in the draft DC rules. There are many logistics like cost and maintenance involved in making security measures mandatory and we have to work out the details.”

CCTV proposal still on paper

The PMC had recently approved amendments to DC rules making it mandatory to install 24×7 closed circuit television (CCTV) cameras at public places in the city. However, the PMC is struggling to implement the proposal. As per the proposal, shopping malls, market places, religious and historic structures, hotels, important tourist destinations, exclusive business buildings and offices of government and semi-government organisations would have to install CCTV cameras and make strctural changes to improve fire safety and security on their premises. The PMC has failed to work out implementation mechanism in this case.

Source: The Times of India

India realty space to see $4-5 billion foreign inflows in 2 years

India’s realty sector is set for robust inflows of USD 4-5 billion from overseas investors in the next couple of years, with Bangalore, Delhi and Mumbai emerging as the favourites, global real estate consultancy giant Jones Lang LaSalle has said.

“The early foreign investors in India, who came in around 2006-07, did not have very good experience, partly because of their inexperience in doing business in India and partly because of global financial crisis,” JLL Asia Pacific CEO Alastair Hughes said here.

“However, foreign investors are now looking with a renewed interest at India, given its still robust economic growth rate as that bodes well for good returns to their investments,” Hughes told PTI in an interview here.

Hughes, who was here to participate in the World Economic Forum Annual Meeting, said foreign fund inflows were expected to pick up in the Indian realty sector going forward.

He added: “They (investors) are now looking much more closely at India to put in their funds into Indian real estate sector. They had come in between 2006-2007 and first half of 2008, but they completely went away in 2009 and have been mostly away since then.

“The overseas investors are now looking to come back and what they are looking for right now is good partners in India, because it is a difficult place to do real estate business because of various reasons.”

Right now, many Indian developers and fund managers are seeking to get international money and that is much more likely to come in, Hughes said, adding that there is more international money today waiting to be invested in India than any of the last five years.

Overseas investors have invested USD 14 billion into the Indian real estate sector over the period from 2006 to 2012. In the last two years, foreign investment into Indian real estate has been around USD 1.2 billion per annum.

Around half of all transactions were invested in residential property, a quarter in the offices sector and the remaining quarter was split among the other sectors. Regionally, half these investment come from US with rest coming from the Middle East, Singapore, the UK, Hong Kong and Germany, Hughes said.

Terming the next two years as much more promising, Hughes said that 2013 and 2014 will have a total of USD 4-5 billion come into the sector, mainly to buy income yielding SEZ assets at a capitalisation rate of 10.75 per cent.

“We expect interest from global and US investors to maintain. Favourite location foreigners will be Bangalore, New Delhi and Mumbai,” he added.

Globally, Hughes said, there was a big boom in 2007 and then a big bust in 2008 for the realty sector, while there has been a gradual recovery since the end of 2009.

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As per a report released by JLL here at Davos, global investment capital is leaning towards real estate and the commercial real estate direct investment volume is expected to more than double to USD 1 trillion by 2030 and Asia Pacific region is leading the investment growth since crisis.

Hughes said investments into Asia Pacific commercial real estate market fell by around 10 per cent in 2012, from USD 98 billion to about USD 92 billion.

“That was because of a sense of caution prevailing in different countries. But now we are seeing a change in the sentiments.

“One of the reasons for that is people looking to divert their investments from bonds to equities and other asset classes and that include real estate. Therefore more money is coming to real estate and a bigger proportion of that we see coming to Asia Pacific,” he added.

Hughes further said: “We believe that the volume of real estate investment deals would go up in 2013 to something close to USD 105 billion, from USD 92 billion last year.

“This would make 2013 the biggest investment year for real estate market since the global financial crisis hit the world, although it would still be below USD 120 billion figure recorded by Asia Pacific in 2007. We are not back to where we were in 2007, but the scenario is getting better and closer to that level.”

Hughes said that 2012 was very bad for the Indian real estate sector, as there were difficult market conditions and India was probably the only country in the world where conditions were even worse than 2009.

Going forward, he said, the growth in Indian office sector would depend on the economic growth.

In the retail sector, a very high growth is expected with the entry of foreign retailers, as they would need large space to set up shop in the country and most of the current developments are not designed for the international retailers.

Besides, manufacturing and industrial sector would also benefit a lot as these companies would need to set up logistics and other facilities.

Hughes said that robust activities are expected in residential space also.

Source: The Economic Times

Kolkata, Mumbai and Pune positioned top, by adding New Homes in 2012

At a time when the real-estate sector across the country is witnessing a slowdown, Kolkata, Mumbai and Pune recorded significant growth in new residential units, in 2012.

According to study released by real estate consultants Cushman & Wakefield, the total new units launched across eight cities went down by approximately 16 per cent (to 162,000 units) in 2012 when compared to 2011.

Mumbai, Pune and Kolkata were the exceptions with 72 per cent, 34 per cent and 19 per cent increase.

The study was carried out across eight cities — Delhi & NCR, Ahmedabad, Bangalore, Hyderabad, Chennai, Mumbai, Pune, and Kolkata.

While Bangalore saw the highest decline of nearly 50 per cent (16,543 units), Mumbai witnessed the maximum growth of 72 per cent (22,423 units).

Of the total number of units launched, majority were in the mid-end segment, which comprised approximately 83 per cent of the total launches.

According to the report, a total of 8,900 units were launched in Kolkata in 2012.

Nearly, 62 per cent of these units were in the mid-end segment (5,535 units) and priced between Rs 36 lakh and Rs 60 lakh. This was followed by the high-end segment, priced upwards Rs 60 lakh, which accounted for another 38 per cent of the launches.

On a year-on-year basis, supply of mid-level homes increased by 26 per cent to 5,535 (from 4,372). Similarly, high-end home launches too increased to 3,360 units – 17 per cent up from the 2,863 units launched in 2011.

Interestingly, supply of luxury homes dipped drastically in 2012. The number of units launched dipped from 280 (2011) to just 23 (2012) — a near 92 per cent fall.

“Cash-strapped developers were not willing to take up projects that may fall short in interest from end users, thereby keeping their risk exposure minimum,” Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield says.

According to the report, the short term outlook of the city suggests a cautious approach by end-users in the wake of high home loan rates coupled with inflation.

Harsh Patodia, President (Bengal), Confederation of Real Estate Developers Association of India (CREDAI), pointed out that over the last 18 to 24 months, launches in Kolkata were much lower than in other cities.

Source: The Hindu Business Line