Trends those are likely to shape the real estate market in 2020

2019 was a relatively challenging year for Indian real estate, which faced a slowdown in the sector. Nevertheless, the recession made Indian developers aware of where they stand and the drawbacks are to blame. As a result, industry experts expected, in 2020, to adapt to several changes in terms of preference, demographics, technology and policies, in a bid to boost buyer sentiment and promote affordable housing sales.

Even with the slowdown in the sector, sales showed some signs of improvement in Q3 and Q4 of FY19, due to redemptions made by developers in their product offering, based on an understanding of consumer demand. New age developments are more suitable for millennial, which are actually the target group of many affordable housing developers,” says Dinesh Doshi, Managing Committee Member, CREDAI MCHI, Raigad.

Top Realty Trends in 2020

Real estate to operate the end user

The market is becoming increasingly end user driven. “While the number of real estate investors is already small, this segment is shrinking further. In the coming year, it seems that almost all of the demand will come from end users, with the supply of products targeted primarily to them, says Mayur Shah, Managing Director, Marathon Realty.

Demand to increase compact housing, co-working and commercial space

The demand for 'compact housing' is likely to increase a great deal across the country. In different regions, homes whose price is right have the potential to elicit good feedback from consumers. Developers will address this challenge, going further,” says Shah. The healthy demand for co-working spaces seen in 2019 is likely to continue until 2020. The growth of the commercial real estate segment, which is attracting foreign investments, will also help in improving the economy.

Heavy Dependence Technology

New-age customers rely heavily on technology and social media as they enter the housing market. Thus, it will become imperative for developers to adopt and leverage technology, to engage with customers, to enhance the experience at every point of view and to create positive perceptions about the field. Adoption of technology will also increase efficiency, quality and transparency, which will lead to change in the sector, ” he explains.

Challenges facing real estate in 2020

The industry is seeking support from the government, to overcome some challenges and to emerge from the recession. While the government has taken several steps so far, continuous reforms are necessary in many key areas.

·     Industry status and single-window clearances

·     Funding from banks

·     Financial bailout

·     GST burden and input tax credits

·     High stamp duty charges

·     Home loan interest rates

Affordable Rental Housing For Migrant, Finance Minister Gives Push to Urban Poor

To relieve the real estate sector of some tension, Finance Minister Nirmala Sitharaman said that the government was extending a one-year extension to the CLSS or Credit Linked Subsidy Scheme which started in 2017 and ended on March 31, 2020. Until March 2021. This will help boost the demand for affordable housing.

The extension of the credit link subsidy scheme for a year will encourage many potential house buyers to buy houses, thereby increasing demand for affordable housing. There is currently a lot of untold inventory in the industry.

The mega-move will also help in maintaining employment as real estate is one of the largest labor intensive industries supporting around 200 allied industries. The proposed affordable rental accommodation under PPP is a welcome step. This will effectively help the issues of majority migrant laborers. Most of these urban poor live in miserable condition

Industry experts believe that the government's move to affordable housing in the last six years has been a great step forward. Its 'Housing for All by 2022' project has resulted in many soaps and incentives. In the last few years there has been a significant increase in buyer activities in the affordable segment.

Allowing new units and players to enter the affordable housing segment to build these rented dwellings, allowing manufacturing units and industries to take concessions and follow the same BOT model as road projects will do.

Karnataka minister announced no landlord should take rent during lockdown

R. Ashok, a revenue minister from Karnataka, said that landlords could not charge rent from tenants during the lockout. He said that action will be taken against the landlords if they force the tenants to vacate the property due to non-payment of rent.

"In this epidemic situation, action should be taken against the house owners in which owner can be imprisoned for up to one year or more under the National Disaster Management Authority," as he said.

However, if the order was not only for tenants belonging to economically weaker sections or people of the society, it did not make it clear.

Although the relationship between a tenant and an owner falls under the Karnataka Rent Control Act, 2001, the government may issue an amendment or an ordinance under the Act to chart instructions regarding collection of rent and eviction.

According to tax experts, Fiat can be challenged in court. Ashish K Singh, partner at law firm Capstone Legal, said, "In my opinion, the exercise of powers under the National Disaster Management Act for rent-related disputes would be challenged before the High Court or the Supreme Court." "It is clear that the NDMA's mandate does not cover the relationship between landlord and tenant."

The state government has taken cues from Singapore passing the COVID-19 Act 2020, which allows a tenant unable to pay rent and other dues under commercial leases from rental payment obligations for six months Seeks temporary relief.

According to property brokers, many prospective house buyers have postponed their plans to buy the property, which has boosted demand for rented houses in Bangalore.

Potential house buyers are expected to moderate prices and home loan rates.

Do not buy a home in India without reading it

Very few people in the country can wake up and buy a home. For the rest of us, making a huge financial decision like buying a home takes a lot of thought and planning. We have listed the most important aspects you need to consider before making this huge financial investment.

1. Set a budget

The way you calculate how much you spend on your home should be based on how much you make and how much you can comfortably pay on EMI. You should not struggle nor live by mouth due to number of EMIs. You start by adding all the sources of income you have i.e. 

 Salary + Freelance work + Bonus = Total Monthly Income

Now, cut your monthly expenses by this amount. If you think your expenses are too high, look at the areas on which you can cut expenses. EMI ideally should not exceed 20-25% of your net pay home pay. If your EMI is 40–50% or more of your net income, you may neglect other goals to pay the EMI, or may struggle if an unexpected expense arises.

2. Save amount for your down payment

The Reserve Bank of India (RBI) and the National Housing Bank have stated that housing finance companies and banks are not allowed to lend more than a certain percentage of the fair market value of the property. It is a LoanTo Percentage Value (LTV) ratio. For example, If you are looking for a loan amount of Rs 30 lakh, then you can get a loan up to 90% of the value of the home. For loans between Rs 30 lakh and Rs 75 lakh, LTV is 80% and above Rs 75 lakh, it is capped at 75%.

To buy a home for Rs. 50 lakhs, you will get at least Rs. 10 lakhs are ready and then you can borrow the rest. Therefore, depending on how much you have saved, you can decide your budget for the home. Or, you can start investing in debt schemes, investing in mutual funds, through monthly SIPs, to build your savings.

3. Decide where to buy a home

Do your research on which areas are growing, it is better to invest here than going to already developed area. The posh areas will be very expensive and you cannot appreciate the rate you want. Growing areas may be more economical and a better option. If you want to avoid congestion in the city, check out the options in the suburbs. While it may be tempting to buy a home in other cities, it is not a good idea. There are many cases in which buyers who were not familiar with the new city got stuck with the wrong project.

You should also be aware of rental rates and resale rates in the area in which you are investing. It shows you how risky / safe investment will be here.

4. See the best time to buy

In India, the most popular time to buy a home is during summer. It is understandable that children are on their summer vacation and easy to relocate as a family, this does not disrupt their school life. Since summer is a popular time, there are many builders who offer special discounts and offers to attract buyers; you can keep an eye on these. This offer also happens during the festival season, so timing is a must. If you want to buy a resale home, be patient. There are many home owners who sell their property at great rates. You can get a home in a great bargain, there are investors who now want to load property that they bought a few years ago at a 0% margin or even for less than what they paid for. Now is your time to grab these homes.

5. Choose the right home

If you are buying a home for as an investment, do not be hasty. Shop; see more and more options before choosing a home. Talk to several builders, talk to the residents and don't leave with your first home.

See reviews, work with experienced teams like SuGanta.com who can show you many options, give you the best deals and even negotiate for you on your behalf. Find out more here. Hire home inspectors and get excellent lawyers so that your documents and home are sound.

Good luck on your home purchase! And remember, SuGanta.com is here to help you in every way. Leave us a message or reach us at SuGanta.com.

Maharashtra Housing Department advises landlords to postpone rent collection for 3 months

In a month of April 2020 the Housing Department of Maharashtra issued a circular asking landlords and house owners to postpone the collection of rent in view of the lockdown situation for tenants for at least three months. It has also been said that landlords should not evict tenants for not paying rent during this period.

The circular signed by Housing Secretary Sanjay Kumar went viral on social media. Many zamindars are within a fixed range whether the government had the legal power to enforce it.

The lockdown has an adverse effect on people's income and employment. “Many people face difficult financial situations. A large number of people are not able to pay their regular rent. Therefore, recovery of rent should be postponed for at least three months and no tenant should be excluded for non-payment of rent, said in the circular.

The proposal is to be implemented with immediate effect. Issuers have gone well with landlords whose only source of income is rent. However, in the words of Housing Minister Jitendra Awadh, “Many people are experiencing economic difficulties as a result of the epidemic. The government has taken this step keeping in mind that it will be difficult for tenants to pay the rent in future.

Rents in Mumbai are skyrocketing and the move is a sigh of relief for the majority of tenants. Rajesh Prajapati, a member of the managing committee of the Housing Chamber of the Government of Maharashtra, said, "At the moment, the government feels that landlords are in a better position for economic devastation based on rental income."