Increasing interest from house-buyers as families stay at house

Although the residential real estate sector was expecting zero sales from the first quarter of the new fiscal year, the lockdown has surprisingly brought people closer to the desire to buy a house.

The current epidemic has had an unprecedented impact on the residential real estate market. With families spending more time in the home, organized real estate players have seen increasing interest among buyers. Potential buyers also include NRIs, who are demanding digital presentations from developers in metro cities. Weak rupee depreciation and low interest rates are also factors contributing to the decision.

With work-from-house being the new normal, even existing buyers are changing their existing bookings as they look for larger apartments. While the numbers are still not comparable to March quarter sales, large developers say there is latent demand but for this to translate into sales, the job market and economy will have to respond better.

Many developers feel that there will be not only a recovery, but also a rebound in residential. The decision to favor decision-making has accelerated due to houses being closed for two months. Noteworthy recovery may take 6-12 months as real estate is a highly suppressed category, but expect first-time house buyers and mid-segment buyers to take advantage given the experience in the last two months will be encouraged.

According to research, demand was seen in the top two cities in India in the last two years, with unsold inventory levels falling 7% in 2018 and 4% in 2019.

In the first 40 days of the lockdown, the Maharashtra government has reportedly seen the sale of only 3,806 properties, which earned the state a nominal amount in registration fees. Typically, the state government earns Rs 25,000 crore per year from the real estate sector. While many state governments have allowed online registration, developers say they expect not only a return but a demand for rebound.

As far as demand is concerned, there are some very interesting patterns. Developers and real estate companies are questioning people who have never visited the site and are responding to digital advertisements. It can be said that consumers are realizing the importance of owning a house. People have started research and are ready for minimal transactions. A strong demand revival is expected once the lockdown is lifted, provided people have a fixed job.

Although the outlook is more promising for the residential sector than retail and commercial, a visual recovery is at least two years away. Developers believe that the digital sales trend will also grow in the coming years as innovative sales and marketing solutions are being worked on and drone shoots and virtual tours are becoming more and more common.

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." 

Builders to take stuck projects at Puravankara

BENGALURU: Property developer Puravankara has teamed up with regional builders in Pune and Mumbai to launch stalled projects in the backdrop of a drastic liquidity crisis, a movement that will aid it to gain a share in Western India's residential market.

“We have reached a significant level in our focus markets, but will continue to move forward. Purvankara has distinguished Pune and Mumbai as the top 5-6 major cities that will be expansion accelerators for the company beyond India,” said Abhishek Kapoor, COO Residential, Purvankara, “ Moving on, Bengaluru, Mumbai, Hyderabad , Chennai, and Pune will be our focus markets. "

Several developers have enrolled in the western and northern markets to resume projects stuck in the midst of the cash crisis, threatening the real estate regulatory act and NCLT to be put into practice.

The company intends to generate 7 m sq ft of residential portfolio in these two markets spanning the Provident and Purvankara brands over the next 24–36 months. It currently develops luxury homes under the Purvankara luxury brand, while premium affordable housing is developed under the Provident Housing brand, which originated in 2008. Currently, 65% of the company's business originates from the larger housing brand - Provident - while the rest rest from the Purvankara brand.

Non-Bengaluru projects launch immediately for an ongoing 53% share and currently 77% for Purvankara. Future accounts for 3 / 4th of the boat pipeline.

Individually, the firm is developing its commercial duties. It plans to generate 10 meters square feet of commercial projects and use it in retail expansion overhead over the next five years in major cities.

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More than 60% of sub-registrars in Karnataka fail to meet revenue targets

Bengaluru: Out of 240 sub-registrar offices in Karnataka, over 60% have failed to reach the fixed revenue target for the initial seven months of the current financial year, causing a permanent decline in the real estate division in the state.

Reacting to this, the government has written a letter to 146 sub-registrar offices in the last week of November, recording a reduction of 17% for the period between April 1, 2019 and October 31, 2019.

Someshwar Reddy, Quick Past Chairman (Karnataka), Builders Association of India (BAI), said, "A compound of circumstances, tax rates ranging from demonetization to rectification, economic downturn and lack of price rise in the market, everything on sale. There has been impact, which is speculation on registration in the state. "

Out of 146 offices, 33 are in Bengaluru urban district, four in Bengaluru rural and 13 in Mysuru. And, in these offices which do not meet the 100% revenue target, some like Shiva ji nagar have less than 1%, while others like Doddaballapur have a deficit of 35%.

Nevertheless, in its letter to the sub-registrars, the Stamps and Registration Department has advanced requests about the valuation of the property. "It has been directed that sub-registrars, as in practice, assure that they accumulate funds, because they have been incurred due to valuation and due to incorrect order of documents."

Demonstrating how the wrong ordering of documents could harm the government treasury, an official said, "For example, if the document of commercial property is classified as residential, the change in services paid Will happen."

Both Realtors and officials acknowledged that the real estate regulatory authority could have an impact. He said, "Now, before construction starts, they panic to enroll a property for sale when construction is nearing completion,” one of them replied.

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UP-RERA 1200 realtors informing them about the stress fund

New Delhi: The UttarPradesh Real Estate Regulatory Authority (UP - RERA) has posted a letter to 1227 real estate authorities across the state detailing the benefits other pressure fund scheme issued by the central government.

"Classification has been practiced to ensure that the developers of the previously mentioned projects are knowledgeable about the plan. Projects are executed, and home buyers of such projects are able to acquire their home,” said the authority in a media release.

The authority held a conference in November in which all promoters informed them of the plan so that they would be able to appeal for the supply of current miles under pressure and in a strange way.

Eligibility that a project should be able to take advantage of the stated funds:

1. Project must be RERA registered

2. Project is postponed due to lack of funds

3. The project comes in affordable and middle income segment

4. The net worth of the project should be fixed

5. If the project is set up in the NCR region and is less than Rs 1 crore for the rest of the country, the parts will not cost more than Rs 1.5 crore.

6. Preference for projects very close to completion

7. Carpet area of ​​the dwelling should not be beaten more than 200 square meters

In November, the central government started a supply of Rs 25,000 crore to complete imminent reality projects. In all, the government has basically deposited funds up to Rs 10,000 crore and has to be offered by additional banks, and additional sources.

The fund will be settled with SEBI as a nominated Tier-II AIF(Alternative Investment Fund) loan fund and will be professionally stable. For the initial AIF after individual window pans, SBI CAP Ventures wants to become an investment administrator.

If there is any need to modify the developer for the project, the investment administrator will receive a call. They will also report revenue based on the outline and specifications of each project prospect.

The fund will manage the expenditure of assets and control the achievement of projects by the developer immediately or with the help of third parties. Permanent lenders will be interviewed as a component of the permitting process.

Net-worth positive frameworks are those projects where the charge of receivables linking the preference to the unsold index is more extensive than the full cost and outstanding contracts at the project level.

Home-buyers have been encouraged to exclude their individual lending organizations for significant personal supervision for supplemental financing or preaching of their actual home loans within the current legal and regulatory structure, and the Regulation Committee has approved lending Processes of organizations are recommended.

Realtors challenge the constitutional validity of the National Anti-Profiteering Authority

Mumbai: The government claimed by some real estate developers to practice in the court of the National Anti-Profiteering Authority (NAA) of constitutional validity and claimed that the body does not have the authority to engage on punitive penalties for it.

This happens after the NAA slapped notifications on 50 real estate developers beyond India to benefit from the Goods and Services Tax (GST). According to a warrant appeal registered in the Delhi High Court, the NAA is on a standard with a tax bench, but it is not actually a judicial member as a part of it.

Through the GST framework, the benefits of rate reduction have to be passed on to customers. If a firm is inadequate to do so, it can be fined and invested for profiteering from tax management. Split with anti-profiteering requirements in the GST Act: “A reduction in the price of tax on any supply of property or assistance or input tax credit shall be passed on to the beneficiary (consumer)." This same reduction in prices.

Input tax credit applies to a mechanism supporting the GST framework, in which the company when purchasing funds when it purchases raw materials or any other charges can be levied on the buyer when marketing assets or services is done.

Many real estate developers based in Mumbai, Chennai, Delhi and Bengaluru had to pay fines as they did not run on the benefits of input tax credit to customers.

According to inquiries by the NAA, developers are not spending on the advantages of input tax credit to customers. Real estate developers are investigating the NAA's jurisdiction to raise concerns over fines.

Khaitan & Co. partner Abhishek A. Rastogi said, "What is of concern is that the legal requirements (section 171) do not exist for interest," it said.

This is when the vested tax department initiated the developers' investigation on the development credit to which they were entitled. Real estate professionals had initiated taxes paid under the pre-tax regime on their GST responsibilities and the tax department directed them to change their activities.Many real estate developers had sought transaction credits on under-construction flats and were entitled to property or inventory for these, but the tax department denied the allegations by sending notifications. Taxes for some of the best players are in the hundreds of crores.

The NAA has also examined some additional divisions, such as FMCG and Pharma, for profiting from GST rate cuts in the past. The NAA investigated tax administrators and CFOs of about 150 Buyer Goods and Pharma Corporation to find that their stock was sold at low rates after the GST rollout on June 30, 2017, with publishers and stockists.

Some organizations also engaged the government and the complex tax department above GST on these occasions which could put long-term land lease agreements at risk.

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