Budget2016 Real estate - read breaking and trending Budget2016 news, stories, headlines. Business insider India is providing latest, handpicked stories related to the Real estate category.

Budget2016 Real estate - read latest and trending Budget2016 news and headlines

New Delhi [India], May 23 (ANI): Once notorious for oversupply and all-round market disarray, Delhi-NCR's real estate sector is witnessing a reversal of winds as the unsold inventory in the region has declined by a massive 57 per cent in the last five years, the latest report by real estate consultant Anarock Group observed. The report added the unsold real stock in the national capital region declined from approx. 2 lakh units at Q1 2018-end to approx. 86,420 units by Q1 2024-end. In the same period, the main southern cities saw their unsold stock decline from approx. 1.96 lakh units in Q1 2018 to over 1.76 lakh units in Q1 2024. Gurgaon holds the highest stock with approximately 33,326 units, marking a 37 per cent decrease. Greater Noida follows with about 18,668 units, having reduced its stock by 70 per cent. Ghaziabad's inventory declined dramatically by 70 per cent to around 11,011 units. Noida saw a 71 per cent decrease, with approximately 7,451 unsold units remaining. Combined, Delhi, Faridabad, and Bhiwadi have about 15,964 unsold units, a 31 per cent reduction since 2018, as per the report. It further observes the top Southern markets Bengaluru, Hyderabad, and Chennai saw their collective unsold stock shrink by 11 per cent in this period. MMR and Pune in the West saw their cumulative unsold stock reduced by 8 per cent. In the East, Kolkata saw its unsold inventory decline by an impressive 41 per cent in the period. Citing the reason behind the low decline of unsold inventory, the real estate consultant added that there have been massive new property launches in Hyderabad, most notably over the last two years. The city saw its housing stock almost quadrupled in the last 5 years. Bengaluru saw unsold inventory decline by 50 per cent in this period. In the West, MMR and Pune saw unsold stock decline by 8 per cent in the last five years - from approx. 3.13 lakh units in Q1 2018 to approx. 2.90 lakh units in Q1 2024, the report added.

Unsold real estate properties decline in Delhi-NCR by 57%; Rate slower in Bengaluru, Hyderabad, Chennai

<ul><li>Real Estate Regulatory Authority or RERA was put in place by the government to bring accountability and transparency to the sector.</li><li>The number of projects registered under RERA went up by 109% in the last three years, says Anarock.</li><li>Authorities have disposed of one lakh cases filed under the various state iterations of RERA, as on 8 October 2022.</li><li></li></ul>Six years after the Indian government passed the RERA Act, it has made remarkable progress in addressing consumer complaints in real estate, as per Anarock. In the last three years of the pandemic, the number of projects registered under RERA went up by 109% to 94,513 projects, a report by the real estate services firm, says. Real Estate Regulatory Authority or RERA was put in place by the government to bring accountability and transparency to the sector, and help reduce project delays and property fraud. “At the end of the day, RERA still lacks sufficient execution powers – a fact which the Supreme Court has also expressed apprehensions over. Meanwhile, the pandemic did not break the pace of project and real estate agent registrations over the last three years,” says Anuj Puri, chairman of Anarock Group. Jharkhand highest growth in RERA registrations The states with maximum project registrations are Maharashtra, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh, Telangana and Tamil Nadu. Together, these states account for a significant 83% share of RERA-registered projects. Maharashtra tops the list with around 38,229 project registrations, the Anarock report says. Two North states also differ in terms of growth in RERA registrations. While Jharkhand saw a spectacular three-year growth of 855%, UP growth is the lowest at 22%. Tamil Nadu recorded a 828% jump in the period, coming next only to Jharkhand. Meanwhile, registration of real estate agents under RERA has risen by 95% in the last three years. Here too, Maharashtra too retains its numero uno position. 1 lakh disputes resolved As per data from the Ministry of Housing and Urban Affairs, the authorities have disposed of one lakh cases filed under the various state iterations of RERA, as on 8 October 2022. Of these, approximately 72% cases or 72,979 complaints – were resolved in the last three years. While MahaRERA has been a torchbearer in terms of dispute resolutions, UP RERA saw as many as 40,559 cases disposed of so far - against a mere 11,596 cases in October 2019. Haryana comes a distant second, but MahaRERA too disposed of 12,507 cases – that’s much less than UP. Puri says that RERA has been visibly fulfilling one of its key functions – resolving homebuyer grievances. “As per official data from MoHUA, RERA authorities have addressed more than a lakh consumer complaints. While this is impressive, it is also true that there remains a big question mark with regards to 100% resolution,” Puri said.

The state which resolved the most home buyer complaints is the most sluggish when it comes to RERA registrations

As per the new national building code proposed by the Centre which is to be followed by the states, builders can be made liable for the safety of the structure. Consumer Affairs Minister Ram Vilas Paswan unveiled the revised code today. The code has been prepared by the Bureau of Indian Standards (BIS) under the aegis of the Consumer Affairs Ministry. The code is voluntary in nature but the states can incorporate them in their building bylaws. "The code contains provisions on use of new/innovative materials and technologies and on prefabricated construction techniques that can give fillip to speedier construction to meet the objectives of Housing for All by 2022," Paswan said after releasing the code on the occasion of the World Consumer Rights Day. 
 
Now, builders are made responsible for safety of the construction. Builders have to give a certificate saying that the building has been constructed as per the planned design submitted to the local bodies. Apart from making builders liable, the revised code has made necessary changes keeping in view the requirement of modern buildings. For example, the code specifies fire and life safety norms for high rise buildings and a proper horizontal evacuation system in high¬rise hospitals and public buildings. It also provides for universal accessibility for senior citizens and differently abled citizens besides encouraging use new building material and alternative smart technologies. The salient features of the revised code are norms for solar energy utilisation, inclusion of modern lighting technique including LED, updated provision on piped gas supply in houses and hospitals, solid waste management and rain water harvesting, besides high speed lifts for tall buildings. For ease of doing business, the revised code has a detailed provision for streamlining the approval process in respect of different agencies in the form of an integrated approval process through single window approach thereby avoiding separate clearances from various authorities.

Government unveils revised building code; Builders made responsible for safety of construction

The budget 2016 outlined the shift in focus to the rural economy as the finance minister introduced a slew of taxes and cess to be imposed on services to help rural welfare programmes. It also reflected the government’s concern and priority to improve the investment climate with a view to stimulate growth. The massive push for improvement in infrastructure including outlay for roads, railways and development of smaller airports to improve connectivity will benefit the real estate sector in the long run. The abolishment of DDT is a welcome move and will put the REIT structure in India at par with global standards. REIT listing will soon be a reality. The finance minister also announced certain other measures to bring investment into the real estate sector, while giving special emphasis on affordable housing, few long pending demands of the real estate sector were not met in the budget. Industry status to the real estate sector, single window clearance, tax concessions on home insurance premiums are some of the measures that could have significantly boosted the sentiments in the sector. 
 
I have listed below few key points offered to the real estate sector by the government in the budget. 
 
Removal of Dividend Distribution Tax (DDT) on Real Estate Investment Trusts (REITs): DDT has long been one of the biggest hurdles that made REIT financially unviable for Indian commercial stakeholders. Removal of DDT (tax levied on the dividend paid to investors) will result in a rush of investment in REITs and this could prove to be decisive for the sector. This will help developers raise funds and will also effectively address issues pertaining to transparency, liquidity and execution of property developments across the country, that will spur growth in the future. 
 
Boost for first time home buyers: By introducing an additional interest deduction of Rs 50,000 on home loans not exceeding Rs 35 lakhs, and the value of homes not exceeding Rs 50 lakhs the budget has given some reason to cheer to the first time home buyers. This could boost demand for housing in smaller cities where the cost of ownership is on the lower side. However, this will make little or no difference if one is buying a property in any metro city in India where housing prices are significantly higher. So, the relief will not make any material difference to the sector. 
 
Modernization of land records under digital India initiatives: The government has provided Rs150 crores for modernization of land records which aims at ushering in the system of providing online access of land details and plugging of loopholes. This is a welcome move for the sector as the integrated land management system will not only increase the transparency in the whole system but will also expedite the process of land acquisition and enable holistic growth. 
 
Tax deduction for construction of affordable housing: The service tax exemption for developers focusing on affordable housing with unit sizes not exceeding 30 square meters in the larger cities and 60 square meters in the smaller cities is definitely a positive move and will encourage private participation as well. This will increase profits making it easier for the developer to attract foreign and domestic investments in housing projects. It is in line with the governments vision to boost affordable housing. It will be a challenge though for developers to deliver in the three year time frame given the lack of single window clearance for the projects. 
 
Tax relief on HRA: The increase in reduction limit from Rs 24,000 per annum to Rs 60,000 per annum is a welcome move and will give the much needed push to rental housing across major cities in India. It could also boost demand in the long run. 
 
(The article is authored by Surendra Hiranandani, Chairman &amp; Managing Director, House of Hiranandani) 
 
Image credits: indiatimes

DDT exemption on REIT will be a game changer for the real estate sector: Hiranandani

The Union Budget 2016 on the whole is balanced and highly positive as it looked into almost every aspect and how things can be changed for the betterment of our nation. 
 
The opportunities it has opened are huge and can dramatically change the whole dynamics of the economy once implemented. It shows tremendous worth and can change the real estate market from the situation it is at. 
 
There were endless expectations of real estate developers from the Union Budget which did dampen the enthusiasm initially however if one sits back and analyses the whole initiative of “Housing For All”, you can see how well the government has acted upon its words and promises. 
 
For a consumer the ‘No Service Tax for houses built under 60 square metres’, will have a encouraging outcome as it will add to the savings of approximately 4% making other investments possible for him/her. In addition to this, the consumers on rental property too will benefit with the HRA exemption that has been raised to Rs 60,000 now. 
 
Even the exemptions on home loans for first time buyer the market is bound to see a boost in sales. For that matter, even getting rid of the dividend distribution tax on Real Estate Investment Trusts (REITs) will help larger players like developers, private funds and financial institutions to invest, mobilize and stabilize the higher segment and luxury real estate market. 
 
The focus upon rural development sets in a lot of opportunity in the Tier-3 cities as well making greater possibilities for the real estate sector to gradually pick up base. 
 
(The article is authored by Akhil Kumar Sureka, Managing Director, Sarvome Developers)

Govt delivers on ‘Housing For All’, says expert

Various industry bodies have been making representations to the Finance Minister on Budget 2016. Magicbricks has been talking to consumers on their biggest concerns and how they should be addressed in the Budget by Finance Minister Arun Jaitley. Keeping these in mind, we have put together five things in Budget 2016 that can change the course of real estate in the country. 
 
1) Reduce the tax burden on real estate projects. Currently 30-35% of the cost of a residential project is because of Central, state and local taxes. Many materials are taxed as input materials and then taxed again as completed projects, which needs to be brought down significantly. The earning for the cities has to be on levying property taxes after occupancy. If value-added services are offered such as club houses, jogging tracks, parks, sites for music concerts, etc in addition to basic services like water and power, that too should be able to fetch the city government good income. 
 
2) If the developer uses pre-fabricated or pre-cast materials to speed up construction and reduce pollution, there is an additional 10% that is added to the cost of the property. This burden should go away immediately so that good quality construction using standardised components can help meet the 2022 target of Housing for All. 
 
3) Create an incentivised timeline for speedy approvals or deemed approval system for housing. While this is in the purview of city governments, this incentive can be bundled with the Smart City and AMRUT funds that states and cities can get from the Centre. There should also be penalties of poor access to development funds if the city does not have efficient approval system for projects. 
 
4) There are various sporadic orders from the National Green Tribunal as knee jerk reactions to rising pollution. Can Budget 2016 incentivise non-polluting methods of construction and waste management and also create a penalty for polluters? 
 
5) Finally, citizen’s participation in various city-level programmes have been spoken about. Can there be some means of incentivising citizen’s participation in planning for Smart Cities through an organised mechanism? Maybe create a fund for capacity building at citizen levels to be partners in creation and use of smart cities 
 
(The article is authored by Jayashree Kurup, Head, Content &amp; Research , Magicbricks) 
 
(Image: Indiatimes)

Experts want Jaitley to reduce tax burden on real estate projects in Budget 2016

As the population of senior citizens rise to 118 million in 2016, the senior living sector shows immense opportunities of development in the coming years. It is predicted that by 2025, the population of senior citizens will be equal to the population of dependent children in the country. With these numbers in book, developers are building projects specifically to accommodate senior citizens. Independent living, dependent living, nursing care, quick hospital connectivity and easy commuting facilities are some of the factors that are taken into consideration. But it is still a long road to traverse.
 

	While in US it has matured fully, India still has untapped potential. To understand fully the opportunities and the challenges, one needs to understand first where India stands in the global scenario.
 

	Population
 

	In 2008 as per the National Institute of Aging (USA), it was estimated that the senior population (above 60 years of age) in the world was 506 million. The population of seniors across the world is projected to become 1.3 billion by 2040.
 

	For the first time in human history in 2021, the total number of seniors will be greater than the number of kids below 5 years of age. While developed nations will continue to have a large number of seniors, the rate of growth in senior population in developing nations will be double that of developed nations. The 80 plus age segment is actually the fastest growing segment amongst population sets in several nations.
 

	China and India are projected to have almost 50% of the 1.3 billion worldwide seniors by 2040. 
 

	Industry
 

	Senior housing is a $60 billion industry worldwide. In USA alone there are over 520,000 senior housing units with additional 16,000 units under construction.
 

	While the sector commands large numbers, it is also important to get a sense that only about 12% of seniors in the USA live in formal senior living projects. Compare to this Australia has 4% as seniors living in such projects. 
 

	Challenges
 

	In contrast to senior living in the west where seniors are seen as an asset class, one of the main challenges that India faces is social stigma associated with the very concept of senior housing. We don’t even talk about it. 
 

	“In this changing social environment, concepts like contemporary retirement resorts are becoming acceptable and popular,” Manish Kumar, Managing Director-Strategic Consulting, JLL India, said in his blog.
 

	The development can only be seen in the Tier-II cities and the target is mostly independent senior citizens. Also, the senior housing sector should be in the affordable segment. With the stingy budget and contingencies in the affordable housing sector, that is not possible anytime soon. To add to the woes, not many developers are even aware of the framework needed to cater to end to end needs of theirs.
 

	A fully integrated continuing care retirement communities is still a chit chat of the future.

Senior Housing: Expect Budget 2016 to
be more inclusive

Rental Housing is one of the most crucial factors that drive the economy of the real estate sector. Unfortunately, in India the ratio of owned houses to rented houses is dramatically low. And, the private players as well as the government are at work behind this. In the government’s proposed draft National Urban Rental Housing Policy, 2015, the earlier proposal of allotting 20% units for rental housing was ignored completely. 
 

	Rental housing mainly comprises of ‘shelters’ for homeless, ‘social rental housing’ for urban poor and ‘need-based rental housing’ for migrant labourers, single women, men, students or other target groups. Then there are also ‘market-driven rental housing’ and ‘institutional rental housing’ such as hostels and paying guest accommodations for working class. 
 

	As per census 2011 data, 11.09 million houses are vacant in urban areas. While in India rental housing is ignored, the global scenario is drastically different. Social rental housing accounts for between 20 to 35 per cent of the total housing stock in countries such as Netherlands, the UK, Austria and Hong Kong. 
	 
	
 

	Such poor ratio in India is mainly due to lack of proper regulations and framework, low rental yield, problems with repossession and hike in rent. This info graph shows the global position of India at a glance. 
	 

	 
	 
	 
	 
	 
	(Image credits: indiatimes, IDFC, IMF report- Global Housing Watch)

Budget 2016: This is where India stands in rental housing sector of the world

While the <a href="http://www.businessinsider.in/Heres-why-Budget-2016-is-crucial-for-the-real-estate-sector/articleshow/50835775.cms">Real Estate sector</a> is facing a slug in the market, the scenario is a little bit different for online players. Despite realty sales being the slowest in the past two years, the online real estate sector has attracted a whooping investment of $250 million or Rs, 1600 crores. Consolidation of the market has been the main reason behind its growth. In the last one year we saw the merger of CommonFloor and Quickr and acquisition of Makaan.com by PropTiger. 
 
The online game is played mainly by two players, investors like 99 acres, Magic Bricks and Housing.com and transaction players like Squareyards. In the last two years, while classified players struggled to find a good monetisation model, the whole value shifted to the transaction sites. 
 
“Last year we actually grew more than 225%,” said Vivek Agarwal, Principal Partner, Squareyards.com who acquired three companies in the last few years. 
 
Challenges 
 
1. Cost of property is skyrocketing due ever increasing tax limits. 
 
2. Lack of any uniform GSP forces the online portal to provide separate provisions for each state. 
 
3. The usage of technology is limited. 
 
“Most of the work is done manually and hence becomes cumbersome for online portals,” said Sudarshan Purohit, CEO and co-founder of Zenify.in, online real estate player. 
 
4. The sector is not corporatized yet. It is still dominated by small players. 
 
“The first thing we are expecting is to gain an industry status,” said Vivek. 
 
5. While building, too many clearances need to be done which are often delayed and not transparent. 
 
Expectations 
 
1. “One of the things that we are looking forward is more exemption in the housing loan limit,” said Agarwal of Squareyards. Right now we get certain part of our housing loan exempted from taxes but the way costs have moved up, the small part has become insignificant now. 
 
2. Also, the housing loan exemption is not applicable for the units which are under construction. But looking at these companies’ customers’ profiles, we will see most of them invested in construction property but they can’t take the exemption till the property is actually constructed. 
 
“We want this exemption to be extended to construction property also,” said Vivek. 
 
3. They certainly hope that Real Estate Regulatory Bill is passed. Once that bill is passed it will open many doors for the online real estate sector. The builder will then have to put online all the details with the regulatory authority like the license status, land acquisition status, details of environment clearance etc. 
 
“Things will become more organised. When the information estimation goes away, the information will become structured structured. Hence, portals can put all the information online from where a customer will get all the details with a single click,” he said. 
 
4. Most of the demand on the online portals is from the <a href="http://www.businessinsider.in/Budget-2016-Why-rental-housing-is-the-next-big-thing-in-the-realty-sector/articleshow/50931836.cms">budget and affordable segment</a> which ranges from 20 lakhs to 70 lakhs. Once this government pushes ‘<a href="http://www.businessinsider.in/Housing-for-All-Budget-2016-expectations/articleshow/50901695.cms">Housing for all by 2022</a>’, the online sector will get a major boost. This will also attract NRIs to invest in India. As a consequence, the online sector will grow at a breakneck speed for these portals are the major source of information for the buyers abroad. 
 
“We sold about 780 units in the affordable segment in three weeks in Bangalore, most in the range of 20 lakhs. The customers were both from India and abroad,” said Vivek. 
 
5. “We expect more investment in Technology of this sector, about 1 billion,” said Sudarshan. 
 
6. More transparency in the process of getting clearances, <a href="http://www.businessinsider.in/Budget-2016-Impact-of-FDI-in-real-estate-sector-and-future-expectations/articleshow/50866872.cms">relaxation of FDI norms</a>, <a href="http://www.businessinsider.in/Budget-2016-One-of-Indias-biggest-realtor-Surendra-Hiranandani-says-the-sector-needs-Industry-status-to-survive/articleshow/50929511.cms">'industry' status</a> and passage of regulatory bills are the other things they expect from this budget to cash in the most from the available opportunities. 
 
(Image credits: indiatimes)

Budget 2016: Online players want government to push ‘Housing For All’

Even as the <a href="http://www.businessinsider.in/Budget-2016-One-of-Indias-biggest-realtor-Surendra-Hiranandani-says-the-sector-needs-Industry-status-to-survive/articleshow/50929511.cms">Real Estate Sector</a> market is stagnated, the rise in rental housing demand is giving a new face to the metropolitan cities. An analysis of the national rental market of the top 11 cities, by Magic Bricks, showed that demand for residential properties on lease was the highest in Bengaluru followed by Mumbai and Pune. Large job market in Bengaluru and Pune, high cost of owning a home in Mumbai, increasing migration of people to the city led to the growth.
 

	But the rise is just recent, over the past few months. The <a href="http://www.businessinsider.in/Budget-2016-Impact-of-FDI-in-real-estate-sector-and-future-expectations/articleshow/50866872.cms">problem</a> is not so much with supply as it is with the shortage of demand. As the country faces a shortage of 19 million houses, around 10.2 million completed units are lying vacant, which can be absorbed under rental housing programme for weaker sections, a recent report by CBRE stated.
 

	According to CBRE, around 56 per cent of the shortage of 19 million units is from the economically weaker section (EWS) with an average annual household income of up to Rs 1 lakh, while around 40 per cent in the lower income group (LIG) with an income of Rs 1-2 lakh.
 

	A major reason which has been holding back its growth is the lack of any regulatory framework.
 

	Factors leading to shortage of demand
 

	1. No generalisation of rent- There are no framework to regulate rent and as a result individuals ask rent according to his will. High rent scares away prospective customers.
 

	2. No fixed framework for the Deposit money
 

	“Sometimes owners ask three months deposit, sometimes they ask 10 months deposit. This hinders the growth of demand,” said Sudarshan Purohit, CEO and co-founder of Zenify.in.
 

	3. There is no regulation for brokers also. 
 

	“Today anybody can become a broker. There should be licensing and background check done for every broker,” said Sudarshan.
 

	4. No fixed framework for rent agreement- anything and everything is included in a rent agreement, from the high hike in rent to cost of damage control. This fends off the customers too.
 

	5. Lack of any regulation on the hike of rent 
	 
	The supply in the sector is why <a href="http://www.businessinsider.in/Heres-why-Budget-2016-is-crucial-for-the-real-estate-sector/articleshow/50835775.cms">Budget 2016</a> should give utmost importance to this particular section of the sector.
 

	Recommendations for Budget 2016
 

	1. When ‘<a href="http://www.businessinsider.in/Housing-for-All-Budget-2016-expectations/articleshow/50901695.cms">Housing for All 2022</a>’ was finally launched by the NDA government last year, it was only about providing 20 million houses on ownership basis by 2022 with an approximate central commitment of Rs 3 lakh crore. There was no mention about ensuring 20 % of the units should be for rental housing, as was proposed earlier. This should be looked into on priority.
 

	2. The government should fast track the process of preparing the Draft National Urban Rental Policy 2015 and Draft Model Tenancy Act 2015.
 

	3. Increase <a href="http://www.businessinsider.in/Budget-2016-Tax-breaks-will-increase-penetration-of-Digital-Literacy-says-Bhaskar-Choudhuri-of-Lenovo/articleshow/50916483.cms">Tax</a> exemption for rental income from 30 % to 50 % while giving woman headed households full exemption

	 
	 
	(Image credits: indiatimes)

Budget 2016: Why rental housing is the next big thing in the realty sector

<a href="http://www.businessinsider.in/Here-is-Arun-Jaitleys-dream-team-which-is-working-on-Budget-2016/articleshow/50831638.cms">Narendra Modi's Government</a> is all set to present its first <a href="http://www.businessinsider.in/Budget-2016-12-kick-ass-travel-destinations-with-unseen-natural-beauty-in-India/articleshow/50915089.cms">budget</a> in less than 20 days. <a href="http://www.businessinsider.in/Budget-2016-If-you-are-concerned-about-ever-increasing-power-bills-read-this-/articleshow/50865175.cms">Every sector</a> has its hopes pinned onto it, some for <a href="http://www.businessinsider.in/Budget-2016-Tax-breaks-will-increase-penetration-of-Digital-Literacy-says-Bhaskar-Choudhuri-of-Lenovo/articleshow/50916483.cms">further growth</a> and some for revival of its growth. Amongst all the sources of economy, <a href="http://www.businessinsider.in/Heres-why-Budget-2016-is-crucial-for-the-real-estate-sector/articleshow/50835775.cms">Budget 2016 is especially crucial for the Real Estate</a> sector. This sector has immense untapped potential which if harnessed will contribute immensely to the GDP of the country. Unfortunately, it is one of the most neglected, unregulated and disoriented sectors in India. 
 

	Over the past one year, the new government had taken positive steps with the announcement of smart cities, <a href="http://www.businessinsider.in/Budget-2016-Impact-of-FDI-in-real-estate-sector-and-future-expectations/articleshow/50866872.cms">increase in FDI </a>and “Housing for All-2022” that have boosted the sentiments of both buyers and developers. 
 

	“We are optimistic that the upcoming budget will address key administrative, financial and tax reforms that will spur growth in the future,” said Surendra Hiranandani, Chairman &amp; Managing Director, House of Hiranandani.
 

	But more needs to be done and Hiranandani tells us exactly what!
 

	1. Granting ‘industry status’ to the real estate sector
 

	Getting industry status has been a long pending demand of the real estate sector as developers can avail finances at cheaper rates from financial institutions that will spur economic growth. Currently most industry rules are applicable to the sector, but denial of industry status for funding will only worsen the slowdown in demand because of erosion of capital. 
 

	2. Provision for additional interest exemption/tax-saving on housing loans
 

	The current tax deduction limit of Rs 2 lakhs is not sufficient considering the inflation rates prevailing today. The government should look at increasing the interest deduction limit to Rs 3 lakhs for new home buyers. Similarly, tax concessions on house insurance premiums can be introduced to encourage end users to insure their homes. 
 

	3. Simplification of taxes: Promote REITs (Real Estate Investment Trusts) and remove roadblocks such as DDT (Dividend Distribution Tax) 
 

	There hasn’t been a single REIT listing in India since its inception and we attribute this to the existence of DDT (currently 15%). Removal of DDT (tax levied on the dividend paid to investors) will result in a rush of investment in REITs and this could prove to be decisive for the sector. Additionally, REITs offer the benefits of diversification, safety and easy exit. Simplifying the tax system will provide a major lift to the industry.
 

	4. Additional allocation of funds for infrastructure development 
 

	This will lead to affordable housing. With the government’s ‘<a href="http://www.businessinsider.in/Housing-for-All-Budget-2016-expectations/articleshow/50901695.cms">Housing for All by 2022</a>’ initiative under way, it is imperative to allot new land on the outskirts of metropolitan areas in order to promote affordable housing. Incidentally, the government’s target to provide 20 million houses over the next six years can be met if the government and the developers join in the hip in creating unique urban townships. Meanwhile, the government must allocate an amount exclusively for developing infrastructure and improving connectivity in the peripheral areas of cities, especially the metros.

	 
	 
	(Image credits: indiatimes)

Budget 2016: One of India’s biggest realtor, Surendra Hiranandani says the sector needs ‘Industry’ status to survive

The <a href="http://www.businessinsider.in/Budget-2016-Impact-of-FDI-in-real-estate-sector-and-future-expectations/articleshow/50866872.cms">real estate sector</a> which is beset with muted sentiments since the past few years is expected to witness a turnaround going forward on the back of several measures and reforms initiated by the government in order to augment the sector. Budget 2015 saw the announcement of the government’s most ambitious project so far to revive the disoriented sector, “Housing for All” by 2022, a mission to provide a <a href="http://www.businessinsider.in/Heres-what-you-should-look-for-before-finalizing-your-dream-house/articleshow/48019052.cms">roof for each family</a>. It is targeted to complete 2 crore houses in urban areas and 4 crore houses in rural areas.
 

	The mission on low cost <a href="http://www.businessinsider.in/Revised-real-estate-bill-to-bring-relief-for-buyers-ensures-faster-action-against-defaulters/articleshow/50122879.cms">affordable housing</a> is proposed to be anchored by National Housing Bank (NHB) and a sum of USD667 million has been earmarked with a view to increase the flow of cheaper credit for affordable housing to the urban poor/Economically Weaker Section (EWS)/Low Income Group (LIG) segment. The government has identified 305 cities and towns across the states of Madhya Pradesh, Odisha, Rajasthan, Chhattisgarh, Gujarat, Telangana, Jammu and Kashmir, Kerala and Jharkhand, among others, for constructing homes for the urban poor under this scheme.
 

	As it is about to complete one whole year and all eyes are hooked to the upcoming budget 2016, it is time to review its performance. KPMG and NARDECO survey report 'Decoding Housing for All 2022' decodes the whole scenario for us.
 

	Current state of housing in India Requirements to achieve the vision by 2022 
 

	• By 2022, India needs to develop about 11 crore housing units 
 

	• Investments of more than USD2 trillion or about USD250 to 260 billion annual investment until 2022 
 

	• Investments will need to grow at a CAGR of 12 to 13 per cent (unadjusted for inflation) in 2022 
 

	• 70 per cent of the housing needs till 2022 should be concentrated in nine states 
 

	• Urban housing is to account for about 85 to 90 per cent of the total investments; the focus should be on affordable urban houses, which is 70 per cent of the total urban housing requirement 
 

	• About 1.7 to 2.0 lakh hectare of land is expected to be required to fulfil urban housing need by 2022.
 

	Some key points for the Government to focus on in this budget season
 

	1. Shortage of urban housing is prominent across the Economically Weaker Sections (EWS): 39.44 per cent and Low Income Groups (LIG): 56.18 per cent which together constitute 96 per cent of the total housing shortage, presenting an opportunity for affordable housing across India. 
 

	2. Scarcity of land: Non-availability of land within city limits along with rising land and construction costs, making affordable housing projects unviable. 
 

	3. Lack of adequate policy framework: Low focus on housing for EWS and LIG segment from the developer fraternity owing to lack of effective policy framework. 
 

	4. Development norms: Stringent development norms seem to have led to sub-optimal utilisation of land, in-turn raising the per unit value. 
 

	5. Approval processes: The lengthy and complex approval process leads to a high gestation period which eventually results in project cost escalation by 20-30 per cent. 
 

	6. Funding: The lack of funding sources at lower coupon rates for developers has resulted in an increase in housing cost. This coupled with limited access to credit by the EWS/LIG segment led to a reduction in housing affordability. 
 

	7. Cost overrun: Due to lack of advanced technology and skilled manpower, the overall project economics is not achieved. Many of the on-going affordable housing projects are still adopting conventional construction techniques. 
 

	With the growing gap between demand and supply for housing, the affordable housing segment poses a business opportunity worth USD 11.8 billion for developers across seven major cities (Delhi-NCR, Mumbai (MMR), Bengaluru, Chennai, Hyderabad, Kolkata and Pune) of India. The success of these developments would lie in the scale of operations. In order to bridge the current gap in the segment, the government should strengthen private participation in this segment. 
 

	Recommendations to help improve/ boost the supply of affordable housing in India
 

	1. Creating a conducive and less regulated environment – Streamline approvals required for projects and create a single window clearance, increase FSI and mandate zones for low-income housing, provide government owned land at subsidised rate to developers. 
 

	2. Financial assistance – Provide tax deductions or viability gap funding for affordable housing projects, interest rate subsidies to low-income customers, develop new avenues for project financing for affordable housing including that from insurance and pension funds, provide direct tax incentives to customers, increase availability of low cost debt to housing finance companies.

	 
	(Image credits: indiatimes)

Housing for All:  Budget 2016 expectations

Real Estate sector has been stagnant and unregulated for years now. Rising prices of property, delayed construction, no clarity on Foreign Direct Investment and REITS, ghost buyers are some of problems crippling the growth of the sector. But with the various ambitious projects announced by the new Modi Government there’s a silver lining. As per recent government data, economic growth reached 7.4% in the second quarter of the current financial year, riding on a spike in manufacturing and a pickup in investment.
 

	Where it stands?
 

	Globally positioning India as an investment destination and improving India’s diplomatic and trade relation, Narendra Modi’s foreign stints have helped India attract more FDI. From the nations he visited during the financial year 2014-15, India received FDI of USD 19.78 billion. Moreover, FDI in India increased by 27% in 2014-15 to USD 30.93 billion, said Anuj Puri, Chairman and country head at JLL India in his blog.
 

	But a recent FICCI survey of the year 2015 (Impact of FDI reforms in the Indian real estate sector) shows how disoriented the sector still is. Though there has been overall growth in FDI in the sector, FDI in construction development sector has declined over the past few years. The following table shows that.
 

	
 

	Overall sentiment happy
 

	Still revival hopes are high! The real impact of latest FDI liberalisation measures on foreign investments in Indian real estate will be reflected over a period of time, the industry feels, as per the survey.
 

	1. Industry is happy and satisfied with current FDI reforms in construction development sector 
 

	Majority are happy with the recent steps of the Central Government and are satisfied with the policy development. 
 

	2. Increased confidence and optimism in industry towards future flow of FDI in real estate 
 

	Industry has shown high level of confidence and optimism towards future flow of foreign capital into realty sector. They feel that FDI reform measures will certainly increase flow of FDI into realty sector in coming months.
 

	3. Commercial &amp; Retail and Residential real estate will gain significantly from the liberalisation of FDI in the sector
 

	4. 100% FDI under automatic route in completed projects
 

	100% FDI under automatic route in completed projects for operation and management of townships, malls/shopping complexes and business centres is a significant step taken by the Government, the industry feels.
 

	What more should be done in the upcoming budget 2016?
 

	1. Quick implementation of the Real Estate Regulatory Bill (RERA) to enable the realty market to attract FDI
 

	2. Government of India should bring more clarity over the entry and exit norms and processes to be followed by investors. 
 

	3. Both Centre and State must work together to ensure removal of bottlenecks for faster implementation of reform measures for foreign investments in real estate. 
 

	4. Government of India could also consider a reduced lock-in-period applicable for FDI investments from 3 years currently to 1-2 years to further enhance investor interests. 
 

	The real estate industry is maturing. There is a wedge between demand and supply of housing. However, with increased market transparency, this demand/supply mismatch can offer immense opportunities for developers and investors alike. But a well regulated and consolidated industry is not a near future dream. 
	 
	(Image credits: FICCI, indiatimes)

Budget 2016: Impact of FDI in real estate sector and future expectations

The murky real estate sector is betting big on the Budget 2016. With a slew of reforms expected to be announced in the upcoming budget, here’s what the expectations of a home buyer are from the NaMo government’s Union Budget 2016! 
	 
	“The Union Budget is an eagerly-awaited annual event which Indians follow closely, as the decisions and allocations announced by the Finance Ministry have great pertinence to both individuals and industries. The real estate sector is sensitive to many of policies that are announced both for various industries and individuals. The realty sector is just emerging from a prolonged and painful slowdown, and is looking for all and any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more critical, and the real estate industry has many expectations from it,” said Anuj Puri, chairman and country head of JLL India. 
	 
	Financial protection from project delays 
	 
	Home buyers are calling the shots in the real estate sector. And the innumerable delays and failure in deliveries of the projects, the confidence of the home buyers is really low. Thus, for the realty sector to grow, it is important for the stakeholders to win their confidence. And this can only be done, if the government introduces policies that offers protection to the investors. 
	 
	“The Union Budget should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this - and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent,” noted Puri. 
	 
	He suggested that the Union Budget should make tax provisions for a home buyer from the time he starts paying interest on <a href="http://www.businessinsider.in/Heres-what-the-experts-have-to-say-aboutRBIs-no-rate-cut-policy/articleshow/50836779.cms">housing loans</a>. “Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements,” he noted. 
	 
	Raise the tax saving cap on housing loan and insurance premiums 
	 
	Buying a home is an expensive affair and needs large investments. Thus, it would be nice if the government increases the tax deduction limits on home loans and insurance premiums. While the current limit is of Rs 2 lakh, the government must remember that the prices of property in key markets is skyrocketing at a rapid pace! 
	 
	“Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year,” he added. 
	 
	Raise house rent deduction limit 
	 
	The startup community is growing fast and thus self-employed people too is growing rapidly. For those who are working in an organisation, the house rent allowance can go up with time. However, for self employed home buyers, the tax deduction limit is restricted up to a meager Rs 2,000 under Section 80GG. The Modi government can certainly work on increasing this limit.

Budget 2016: Here’s what a home buyer wants from the Modi government!

The realty sector is just emerging from a painful slowdown, and is looking for any signs of light at the end of the tunnel. This fact makes Union Budget 2016 all the more crucial for the sector. Financial protection from project delays to introduction of FDI to the GST Bill, this budget expects these and many more.
 

	One of the major hurdles that are holding back the growth of the sector is delay in construction which increases the costs too. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this. In this mess they end up paying higher interest. First-time home buyers purchasing properties for self-use additionally pay rent.
 

	“Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and increase the velocity of home loan disbursements. Similarly, if an under-construction property is purchased from capital gains, its construction must be completed within three years of its sale to avail exemption. There can be delays by developer in such cases too. These deductions should be brought at par and the construction timeline should be extended from the current three years to five years,” said Anuj Puri, Chairman &amp; Country Head, JLL India in his blog.
 

	Tax deduction limits is another major issue which needs to be addressed before it’s too late. The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs 2 lakh is insignificant given the ticket sizes in cities like Mumbai, where most houses are priced at Rs 1 crore and above. 
 

	“Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year,” added Puri.
 

	Green is the solution for a sustainable future. But unfortunately most home buyers in India are averse to paying an extra premium for such projects. The Budget should increase the demand too by providing clear and convincing benefits to buyers of green real estate in the country.
 

	“Although the previous Budget prioritised affordable housing, the upcoming Budget should allocate an amount specifically for building infrastructure and improving connectivity in the peripheral areas of cities, especially the metros. Without this, it will be difficult to provide affordable housing in the cities. Developers entering this segment should be allowed cheaper financing options, thereby also providing a shot in the arm for government’s ‘Housing for All by 2022’ target,” he stated. 
 

	The next big thing in this year’s budget would be the GST Bill. The Finance Minister should announce a specific date for the implementation of GST. 
 

	“This major reform will give the industry a very clear taxation structure and induce a major change for the logistics architecture, since logistics will be driven by cost and not by a regulatory regime,” Puri said. 
	 
	Transparency and single window clearance is the call of the moment.
 

	“We are pinning a lot of hopes on the upcoming budget. Getting infrastructure has been long pending demand of real estate sector and this time too we expect the sector to be given infrastructure status so that developers can avail finances at cheaper rates from financial institutions. Also, we are eagerly waiting for single window clearance system so that approvals are given in a pre-defined timelines, furthermore bringing transparency in the overall working system,” said Manoj Gaur, President, CREDAI NCR and MD, Gaursons India told to The Property Times.
 

	Also, one should not forget the much awaited Real Estate Regulatory Bill. Maybe this budget season will see the light of it.

	 
	(Image credits: indiatimes)

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