Builders Priority to Clean Ready-to-Occupancy Inventory During COVID-19 Outbreak

Real estate sales in India were improving in the first quarter of 2020, until the social distancing advisory was implemented by the government, with the outbreak of the COVID-19 virus continuing, reducing site visits. Subsequent lockdown forced house buyers to postpone the decision to buy their home until the government and the market had more clarity than stability.

The economic relief measures announced by the government are extremely positive for the real estate sector on a large scale. This measure will compensate for the short-term impact of the crisis and increase liquidity, thereby easing credit flow and reducing the pressure of delivery deadlines. This will allow real estate developers to reorganize their business strategies and focus on high priority operations without additional financial burden. It will also ease home buyers' concerns and accelerate the completion of delayed projects. This step highlights the magnitude of the realty sector in India. Being the second largest employer in India, it is mandatory to protect the welfare and interests of all stakeholders.

Currently, the priority of most builders is to sell ready-to-occupant inventory. Now that the government has relaxed the lockout, the market may pick up momentum again, with more buyers entering the market. Although sales will be comparatively slow, it is unlikely to affect real estate prices overall, which has also maintained flexibility during demonetization and other reformist changes previously announced by the government .

In these challenging times, as people have realized the importance of owning a house, the demand for residential properties may increase in metro cities.

Better demand for property is likely to have a positive impact on property prices.

The place for price appreciation in real estate as the city offers quality housing options at affordable rates. Although the lockdown caused a short period of delay in construction activities, a reduction in prices is unlikely.

How migrant labour of our country get back to work?

As India enters 4.0 lockdown, the Narendra Modi led government is looking in every possible way to slowly resume economic activities. The Center has withdrawn its lockdown directive and only broad central guidelines and allowed states to follow their strategies for the gradual establishment of the economy. Therefore, the Modi government will have to come up with a big financial package, which will put money in the hands of the people so that they start spending on their essential needs.

To do this, workers must be assured that precautionary measures have been taken that require a strong message. In addition, the transport service is also required to return to the workplace with all health protocols, including facilities for daily commuting.

The migrant labor population is widely engaged in the transport, construction and MSME sectors. Getting them back to work is a challenge as we get out of lockdown but we have to assure them of their safety and health. Most people want to return home due to uncertainties combined with fear. The industry can play a major role at this time. State governments have started working towards restructuring the economy to allow for a regular job or assisted living which in turn will help them earn income and reduce savings after one month of lockdown.

The basic minimum living conditions will encourage them to return to work quickly. Authorities are working with skill occupations in the states, which map the skills of available laborers and accordingly ensure that they reach the nearest places where these skills are required in the industry.

Some economic activities, such as construction, may still require local labor from non-containment areas, and initially in small numbers. In rural areas, long-distance demand and supply chains of essential commodities are being opened through digital platforms by some state governments. But both central and state agricultural agencies will need to coordinate with district-level marketing boards to reroute supply chains to organized retail chains in cities and towns.

The government is required to play the role of a market proponent to improve economic duration. Manufacturing and construction companies have to get on track with better credit availability. Once manufacturing and manufacturing improve, more jobs will be possible. Better credit for companies will add liquidity to the economy.

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.

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.

India Prime Minister Announces Rs 20 Lakh Crore Incentive to Combat Corona virus Fallout

Prime Minister Narendra Modi announced a stimulus package of Rs 20 lakh crore to support the economy after the Corona virus crisis on May 12, 2020.

As India planned to enter the fourth phase of lockdown from May 12, 2020, to prevent the number of coronovirus infections, Prime Minister Narendra Modi announced on May 12, 2020, Rs 20 lakh crore to support the economy. Announced an incentive package. Narendra Modi extended the lockdown in India until May 30, with some ridership as Asia's third-largest economy attempts to mitigate the widespread damage caused by the epidemic.

In the coming times, Finance Minister Nirmala Sitharaman will provide details of the mega package, which is one of the world's most important stimulus packages against the epidemic. While Japan has announced a $ 992 billion coronavirus relief package that accounts for more than 21% of its GDP, the $ 2 trillion stimulus package announced by the US serves about 13% of that country's GDP.

India's support measure is likely to focus on tax breaks for small businesses and incentives for domestic manufacturing. Being the second largest employer in the country, real estate can be a major beneficiary of fiscal stimulus, Collier International India said in a statement.

Important is that the new package, which is equivalent to about 10% of India's GDP, includes the first Rs 1.7 lakh crore package announced in March 2020, as well as liquidity measures in various measures initiated by the Reserve Bank and Interest included Rate cut.

Corona virus stimulation package in India

The Center and the Reserve Bank of India (RBI) have announced a slew of measures in the past to support the economy as analysts predict a prolonged national lockdown to counter a corona virus outbreak in India's first-ill. May push economic growth to a three-decade record less.

In India, the number of infections has increased to 81,970, while the number of deaths by May 15, 2020 has risen to 2,649.

After the central government announced a Rs 1.7 lakh crore incentive package to provide direct cash transfers and food security measures to millions of poor people due to the lockdown, RBI announced a 75-basis point shortfall The interest rate, after an emergency meeting through video-conference of its Monetary Policy Committee (MPC) on March 27, 2020, to bring it to 4.40%.

A nationwide lockout that has forced India's 1.3 billion people to live in millions of low-income homes indoors, relying on daily wages to sustain their livelihoods in Asia's third-largest economy, which weakening economic activities in the country is also the weakest and brought many companies to the brink of bankruptcy.

How will corona virus affect the Indian economy?

ICRA states that India's growth fell to a six-year low of 4.7% in October-December 2019 and may decline to 2.4% in January-March 2020. On the other hand, rating agency Moody's projected job losses to accelerate in countries after COVID-19, resulting in widespread loss of income for businesses and individuals.

Tamil Nadu offers extension of three months on payment of property tax

Amidst the corona virus lockdown, Chief Minister of Tamil Nadu Edappadi K. Palaniswami extended the deadline for several loans and other payments to be paid appropriately by a quarter.

Chennai: To provide relief amid the COVID-19 lockdown, Tamil Nadu Chief Minister Edappadi K. Palaniswami noted in his address that property tax payments, water charges, agricultural loan installment to cooperatives, housing loan installment to cooperatives, Tamil Nadu Housing Board, Loan fisheries and hand loom cooperative society’s installments can be postponed by 3 months.

The government has also offered to extend the deadline for loan repayment to Tamil Nadu Industrial InvestmentCorporation (TIIC) and from StateIndustries Promotion Corporation of Tamil Nadu Limited (SIPCOT) then payment of maintenance expenses to units working in SIPCOT industrial undertakings.

According to Edappadi K. Palaniswami, a separate fund of INR 200 crore will be activated to finance the urgent requirements to run micro, small and medium sized units.

The extension also includes renewal of driving license and period of obtaining fitness certificate for vehicles till June 30, 2020.

Report suggests that RERAs extends the project deadline by 6–12 months

In a recent report by the PHD Chamber of Commerce, findings from various real estate bodies have suggested that the Center advise all the states to extend the deadline for Real Estate Regulatory Authorities (RERA) to complete projects ranging from six months to 1 year. Should be given just 3 months in the wake of the COVID-19 crisis and the ensuing nationwide lockdown.

The industry body has also proposed that a six-month suspension period be allocated for payment of local body taxes such as municipal taxes and property taxes.

It further suggested that current projects are considered assets to be loaned to developers.

The report states: “Stamp duty and registration fees should be reduced or waived on flats completed for a period of about one year. This will not only be a major challenge for the real estate sector, but it will also boost demand in key industries like cement, steel, electrical etc., while at the same time providing employment opportunities. This can go a long way in rejuvenating economic activities. "

It acknowledged that although the RBI's cut in the emergency rate would reduce interest rates, consumer sentiment should be further stimulated to buy a home.

According to the report of the Board of Industries, "It is suggested that the deduction in interest for home purchases should be reduced this year. For example, for the current year, the deduction of interest may be paid 200 percent of the interest. , Followed by deduction of 175 percent interest paid for the second year, 150 percent deduction of interest paid for the third year and so on. "

It has been suggested that the industry would be helped, such as during the COVID-19 crisis, that the minimum wages of construction workers would be borne by the government using labor funds collected by the developers.

The report also touched on a long-awaited request for industry status for the real estate sector.