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  • 1 year of RERA: the sector on a way to be regularized

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    Recently RERA (Real Estate Regulation and Development) Act, 2016 completed a year on May 1. Although certain sections of the Act were introduced on May 1, 2016, it came into force in its entirety on May 1, 2017.

    Before RERA, there was no real estate regulator in the country due to this many builders took homebuyers for a ride. Delays were rampant and homebuyers usually did not have a reliable source to address their grievances.

    Many home buyers believe it has given proper shape to the sector and on a positive route. Most states and Union Territories (UTs) have followed a quasi-implementation route.

    “RERA has brought us a ray of hope; it guarantees timely completion of projects and delivery to the buyers. This mean, we need not to worry about the project”, said Shubham Ahuja, a homebuyer.  

    “The provision which says that a developer cannot launch or advertise a project before registration with RERA haring information project plan, layout, government approvals and etc: again work in favour of the buyers,” added Ahuja.

    On the other hand, the developer also believes it was a positive move which will reap better result in the coming time ahead.

     “The act ushered a path for the developers to regain the trust of its buyers. The changes brought in by the implementation of RERA have allowed developers to freely attract buyers towards projects which have occupancy certificate. The focus now is on end-users which in turn have added importance to quality over quantity. Developers across the real estate industry are strategising their business portfolio to align with the emerging realty of RERA."- Mr Ravish Kapoor, Director, Elan Group

    “The Real estate regulatory act (RERA) is India’s first serious attempt to regulate an industry not known for its ethical business practices. The act is changing the entire landscapes of the real estate and redefining the process of how sales happen in India. Every segment associated with it is unlearning the old ways of operating and aligning to the new terms/process which are RERA specific. This has boosted the buyers confident and has brought transparency in the sector with encouraged investment.”-Mr. Rahul Singla, Director, Mapsko Group.

    As per Knight Frank report, currently, more than 25,000 projects have been registered under RERA across India.

     “The developers are now getting more careful in promising something and there are more written commitments than verbal promises.Many states have registered themselves, while several states still need to notify the rules under the Act. However, the act will majorly ensured that there is a flow of institutional funds, making the end-user the real winner and protect them from unscrupulous activities. RERA, along with GST will make sure that the market is largely driven by end users. At BDI, all our upcoming projects are RERA registered to benefit our buyers. – Mr. Ssumit Berry, Managing Director, BDI Group

    It is hoped that the act will make real estate purchase simpler, by bringing in better accountability and transparency, provided that states do not dilute the provisions and the spirit of the central act.

  • AFFORDABLE HOUSES: Growth Drivers of Indian Real Estate Industry

    AFFORDABLE HOUSES

    If we talk about affordable houses, it typically denotes the housing needs of the lower or middle income population. The Government of India has taken number of steps to make affordable house available to everyone.

    Budget 2017 has proposed infrastructure status for affordable housing, a long-standing demand of developers, and also increased the allocation for the Prime Minister Awas Yojana from Rs 15,000 crore to Rs 23,000 crore, bringing the country closer to realising the Housing for All mission by 2022. Under this one crore houses are to be built by 2019 in rural India for the homeless and those living in ‘kaccha’ houses.

  • Commercial space provides better opportunity for investment

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    The return on investment (ROI) on housing assets was quite satisfactory in the past. In some cases, it was even doing amazing good business, depending on the locations, amenities and etc.

    In India, historically the rental yields for residential assets have always been low; capital appreciation alone was sufficiently dynamic prospects for most real estate investors.

    However, in the last two-three years the hype relating to the residential property investment has faded out with a prolonged slowdown. This has affected the capital appreciation overall.

    The continuing sluggishness on the residential property market, coupled with the associated re-investment cycle risks, will also pay a significant role in driving more investments towards various categories of commercial real estate.

    In the present scenario, the demand for the office space is growing faster: its demand is higher than the residential space.

    Vineet Taing, president of Vatika Business Centre, says: “After RERA and GST came into force, the residential market saw a slow down with limited new launches and tepid sales. However, the commercial realty has remained robust with sustained demand. There is an increasing demand for office space which has led to the growth of business centre, virtual offices, as well as the co-working spaces. In the Delhi/NCR, the New Gurugram region and Dwarka Expressway are set to get a boost both in terms of office spaces as well as retail.”

    Developers are with the view that the demand for commercial real estate has increased in the recent time with the sale of its properties like shops, malls and office space has swelled. The reason for this is the higher rental returns.

    “The purchasing of commercial properties such as shops, malls, offices and storage facilities, has grown in recent years. The rental returns in commercial real estate is higher than in residential sector especially in a place like NCR, which is inviting more number of investors in this sector. The Indian commercial real estate is also attracting realty players from all over the world. This is increasing the need and competition in this sector; as a result the buyers are getting the best,” said Ravish Kapoor, Director Elan Group.

    “Necessity for office spaces is rapidly increasing largely due to massive upsurge of startup landscape, M&A deals, favorability towards manufacturing in India and emergence of our country as a major investment destination. Businesses today are expanding and creating a demand of larger commercial space to accommodate their increasing employee base. Additionally, there is a surge in demand of under construct commercial projects due to higher rental values and scarcity of ready- to- move in office space. Therefore, the sector is witnessing and will continue to see an upswing trend in office spaces. 

     Investing in a commercial property has always been considered more profitable as commercial investments yield higher rental values than that of residential. Further Reforms like RERA offers broader and safer investment options to small investors ensuring more and more investment swing towards commercial,” said Ashish Arora, Director Distribution, Viridian RED

  • Experts suggest it is a healthy time to own a 2nd home

    Real Esate 123

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    Home buyers should be clear about the purpose of investing in the 2nd home

    The real estate sector which experienced a wobbly start in January is now showing signs of revival. Sale has improved both in the primary as well in the secondary market: all these shows that it is the healthy time to own a second home. People associated with the sector suggest that it is the best time to buy a second home.

    “This is an ideal time for buyers to invest in a second home as the market prices are low and will only increase in the coming time. A second home is ideal for investment purposes, as it generates rental income; it may also be set up as a holiday home for the buyer. Second homes are an excellent source of income for retirees as well," Vineet Relia, MD of SARE Homes, says

    Experts believe that if a person is buying a second home, it is an asset which should be bought with prudence and purpose should be clear whether a person is buying to rent it out or make an additional investment with a long- term horizon in mind.

    Well, many believe that the introduction of RERA has also brought in the positive impact on a sector and it is also responsible for changing landscapes of the sector.  

    “For those planning to buy a second home as an income-generating asset or for capital gains, the market is attractive when considered from a long-term perspective. For this, buyers should sort out their investment plans and put their finances in order. In the contemporary era, an affordable house is the best option a homebuyer can think of buying currently," Ssumit Berry, MD of BDI Group, said.

    "Overall, the time is favourable for buying a second home as realty has picked up pace after demonetization, RERA, and GST. There is a surge in demand for ready-to-move-in homes, which promise immediate rental yields. Even for those who are scouting for a second home for the extended family, it's a vantage position," Harinder Dhillon, VP (sales) of DLF, says.

    To clear out the unsold stock developers are also giving discounts and freebies to which buyers are taking the advantages of it and buying a second home. This ultimately is increasing the overall sale.

    With the improved real estate market coupled up with Government reforms are attracting home buyers to a buy second home.

  • FESTIVE SEASON: Developers offering offers to woo buyers

    Festive Season For Home Buyers

    Festival season begins from Navratras and lasts till Diwali in India. It brings happiness and optimism with it. It is the time when developers offer many offerings and freebies to attract buyers and push their selling. On the other hand buyers consider festival season as an auspicious time to own a property. Like every year, this year also developers are offering many gifts or offers to woo buyers across Delhi- NCR.

  • Impact of GST on Real estate Sector

    Elan Miracle Sector 84 Gurgaon   Copy

    NewsMantra Bureau

    Goods and Services tax is going to be implemented from the 1st of July. GST is being considered as one of India’s most revolutionary tax-related reforms. GST will eliminate conflicting and cascading taxation structures like VAT and service charges in real estate. GST law will increase the margin in the hands of developer by eliminating the above-mentioned taxes.

  • Maharashtra RERA: Deadline for projects' registration not to be extended

    Mumbai Rera

    Chairman of Maharashtra’s Real Estate Regulatory Authority, Gautam Chatterjee has said that the deadline for registration of projects under the real estate act will not be extended beyond 31st July. 

    Speaking to reporters in Mumbai today, Mr. Chatterjee said that the new law will bring in transparency in the system. The Real Estate (Regulation & Development) Act-2016 came into force with effect from 1st of May this year, and Maharashtra was one of the first states to notify its rules and establish the regulatory authority. 

    Mr. Chatterjee said that over 300 applications have been registered so far, while nearly 20,000 are expected to register online by end of this month.

     

  • NRIs considering investment in commercial realty sector

    BDI Ambaram

    Photo Courtesy: Internet 

    Delhi/NCR:  Non-resident Indians (NRIs) are evincing interest in commercial properties besides residential ones too. Earlier, the high-end, luxury residential homes were the major key of attraction for NRI buyers.

     "Slowdown in the market in the past few years has considerably affected the return on investment from residential projects. Owing to the imminent slowdown in the residential market, especially luxury segment, NRIs looking to invest in Indian real estate are now diversifying their asset exposure and considering investments into commercial properties,” says Divya Seth Maggu, Associate Director (valuation and advisory services) at Colliers International India.

    In fact, NRIs still have several advantages in both categories. The low residential prices and certain incentives in the form of discounts are also available to serious buyers.

    "RERA has ensured that investment into residential property has also become much safer, and the risks previously attached to home purchase have thereby been moderated. Also, considering that many NRIs will return to India at some point, owning a home in their respective cities is a very sound investment for the future,” says Santhosh Kumar, Vice-Chairman of ANAROCK Property Consultants.

    Developers state that this is the perfect time for investment in the realty sector "It is a great time for NRIs to invest in the residential real estate market as there has been a significant drop in the property rates after demonetization. Moreover, regulatory changes like the implementation of GST and RERA have made the market more equitable and real estate purchase simply by bringing in better accountability and transparency,” Harinder Dhillon, Vice-President (sales) of DLF, said.

    "NRIs are now diversifying their asset exposure and investing more into commercial properties as it offers a longer lease period, assuring a steady income. When you invest in the commercial real estate, it’s not just the building itself that has meaningful intrinsic value, it also includes the land," Ravish Kapoor, Director of Elan Group, said.

    Due to high demand from corporate, commercial office space vacancies has almost halved in the past six years. Even, in some prime locations in cities like Bangalore and Pune, the vacancy has reached even single-digit levels.

    "The launch of Real Estate Investment Trusts is expected to further attract investments in office properties going forward. In contrast, the residential real estate is facing challenges of high inventory pileup, low consumer interest and sales. Stagnant prices on the residential front and slowdown in new launches have pushed affluent NRI investors towards commercial properties," Divya Seth Maggu said.

  • NRIs considering investment in commercial realty sector

    BDI Ambaram

    Photo Courtesy: Internet 

    Delhi/NCR:  Non-resident Indians (NRIs) are evincing interest in commercial properties besides residential ones too. Earlier, the high-end, luxury residential homes were the major key of attraction for NRI buyers.

     "Slowdown in the market in the past few years has considerably affected the return on investment from residential projects. Owing to the imminent slowdown in the residential market, especially luxury segment, NRIs looking to invest in Indian real estate are now diversifying their asset exposure and considering investments into commercial properties,” says Divya Seth Maggu, Associate Director (valuation and advisory services) at Colliers International India.

    In fact, NRIs still have several advantages in both categories. The low residential prices and certain incentives in the form of discounts are also available to serious buyers.

    "RERA has ensured that investment into residential property has also become much safer, and the risks previously attached to home purchase have thereby been moderated. Also, considering that many NRIs will return to India at some point, owning a home in their respective cities is a very sound investment for the future,” says Santhosh Kumar, Vice-Chairman of ANAROCK Property Consultants.

    Developers state that this is the perfect time for investment in the realty sector "It is a great time for NRIs to invest in the residential real estate market as there has been a significant drop in the property rates after demonetization. Moreover, regulatory changes like the implementation of GST and RERA have made the market more equitable and real estate purchase simply by bringing in better accountability and transparency,” Harinder Dhillon, Vice-President (sales) of DLF, said.

    "NRIs are now diversifying their asset exposure and investing more into commercial properties as it offers a longer lease period, assuring a steady income. When you invest in the commercial real estate, it’s not just the building itself that has meaningful intrinsic value, it also includes the land," Ravish Kapoor, Director of Elan Group, said.

    Due to high demand from corporate, commercial office space vacancies has almost halved in the past six years. Even, in some prime locations in cities like Bangalore and Pune, the vacancy has reached even single-digit levels.

    "The launch of Real Estate Investment Trusts is expected to further attract investments in office properties going forward. In contrast, the residential real estate is facing challenges of high inventory pileup, low consumer interest and sales. Stagnant prices on the residential front and slowdown in new launches have pushed affluent NRI investors towards commercial properties," Divya Seth Maggu said.

  • RERA Registration: Haryana builders seek 3 months extension for registration

    RERA Registration

    After the completion of the deadline on July 31 for RERA registration ongoing projects, several projects are still to be registered yet. The Haryana based realtors are expecting an extension in the deadline for the registration of the remaining projects under H-RERA. They have come across, approaching 3 months of extension in the deadline to the government.

  • RERA's effect on ongoing projects

    Elan Miracle Sector 84 Gurgaon   Copy

    Gurgaon: The Real Estate (Regulation and Development) Act (RERA) which has come as a protector of home buyers, and as a much awaited change which will boost business in the real estate industry.

  • Will Budget 2018-19 Boost Ready-to-move Property Absorption?

    Budget Rectification

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    With Union Budget 2018-19 just around the corner, the Indian real estate market waits with bated breath to see how it can potentially benefit. In fact, it has never been a better time for aspiring homebuyers, as there is a more than generous stock of ready-to-move housing options across most Indian cities.

    Ready properties are the pièce de résistance of 2018, not least of all because they are the most de-risked purchase proposition, do not attract GST and offer instant gratification. After all, owning a house is the culmination of almost every Indian’s lifetime efforts and aspirations. The sense of security, achievement and social stature linked to home ownership is what has for long been driving the demand for – and supply of - residential developments across India. All major roads, railway stations and airports are flanked by hoarding advertising real estate projects.

    With a massive urbanization rate of more than 30% (estimated to reach 40% by 2030), the demand for homes in India an assured long-term story in which chapters will continue to unfold. However, due to wavering economic growth, an uncertain job market and rising property prices, residential real estate demand has remained largely subdued over the last few years. Paradoxically, developers continued their protracted project launch spree - leading to a huge unsold inventory pile-up.

    Due to the structural changes and policy reforms such as demonetization, RERA and GST, the new launch activity slowed down in 2017. Nevertheless, December 2017 saw more than 7 lakh units remaining unsold across top 7 cities of India. Under the RERA regime, stringent guidelines and financial discipline have now been force-fed into the systems and processes governing the real estate business in India. Unsurprisingly, developers are now focusing on completing existing projects to avoid being entrapped in compliance hassles.

    This laser focus on project completions is a blessing for homebuyers. The mammoth unsold inventory has already turned the Indian real estate arena into a strongly buyer-favouring market. Now, at the beginning of 2018, there is a huge opportunity to cherry-pick ready-to-move-in house as around 1.7 lakh unsold units are likely to get completed in this year. With the right kind of boosts to the Indian consumption story, we could see a massive return of buyers who are hoping to snap up ready-to-move homes but need that last decisive ‘last-mile’ incentive push.

                                                               Graph

    The above graph confirms that a large chunk (67%) of unsold inventory to be completed in 2018 will be added in NCR, MMR and Bangalore.

    • Over the past few years, NCR - largely an investor-driven market - has been a front-runner a mong the top 7 cities in terms of churning out new residential launches. However, developers’ focus on completions has been minimal. Now, the entire new launch activity seems to have shifted to a slow track due to the combined effect of demonetization, RERA and GST. Among NCR’s many developers, those that had been relying of deceit and misinformation are now having a rough time as the real estate business as a whole re-orients itself to the rebooted market conditions where focus on project execution has become a paramount consideration.

     

    • MMR’s real estate market is driven by a good mix of investors and end-users, and has also been flooded with new launches over the past few years. While the many structural changes and policy reforms in the recent past have taken the sheen off the high-end and luxury real estate segment, mid-range and affordable housing projects will remain in focus in MMR for the foreseeable future. With massive growth potential and huge latent demand in the suburbs and peripheral areas, housing requirements in these regions will make a comeback sooner than in other parts of the city.

     

    • Bangalore, largely an end-user driven market, has always adjusted as per market guiding circumstances and developers have accordingly restricted new launches to align with realistic absorption potential in such a market. This time around too, Bangalore’s developers are concentrating on completing existing projects rather than adding new ones to the market.

    In terms of affordability, buyers scouting for ready-to-move-in homes priced below INR 80 lakh will have a bracing spread of options across the top 7 cities. Overall, buying ready-to-move-in properties in a buyer-favouring markets is always beneficial:

    • No execution delay
    • Attractive pricing
    • Buyers can relocate immediately to save on additional rentals
    • WYSIWYG (what you see is what you get)

    The major disruptive structural changes and policy reforms are now behind us. As 2018 begins on the right note of transparency and the right approach by developers, ready-to-move-in homes are indeed the flavour of the season. If Union Budget 2018-19 takes the right direction for the Great Indian Middle-Class, the sales uptick of these properties could be very significant indeed.

    (views by Anuj Puri, Chairman – ANAROCK Property Consultants)