Real estate promoters not enthused Assetventures

While the Union Budget revolves around the aam aadmi' the real estate promoters feel that the finance minister has overlooked housing
requirements. None of their expectations have been met, like tax exemptions on housing loans to infrastructure status for integrated townships (Sec 80-1A) and reduction in housing loan interest rates, said the head of aninternational real estate consultancy firm in the state.

But on the positive side, the budget focuses on infrastructure and providing more funding especially for highways and railways. Increase of fund allocation for the JNNURM scheme (Jawaharlal Nehru National Urban Renewal Mission), an excellent scheme, with 87% encouragement respectfully. These outlays will turn outcome if the government implement the infrastructure projects on time,he felt.

Another industrial leader was optimistic that, "The hike in infrastructure spending will be a huge boost for the real estate industry. Any increase in the spending on infrastructure results in an increase in value of real estate development.

No immediate impact on real estate Assetventures

Real estate players in the city are a disappointed lot as they feel the finance minister's proposals for the sector have ignored the
aspirations of the Indian middle class.

The Pune branch of the Confederation of Real Estate Associations of India (Credai) said the industry's expectations to boost affordable housing and higher tax deduction
for interest paid for home purchases were not met. "While the FM talks of a slum-free India in five years, he seems to have completely missed the opportunity to offer relief and incentive to middle-class home buyers," Credai Pune president Satish Magar said in a statement.

"It is well established that housing/construction is an engine that can propel growth in the economy the linkages to hundreds of industries as well as employment to millions of workers seems to have not found any priority in the FM's budget. Overall, the budget doesn't address the needs of the housing industry at all," the statement read.

Anurag Mathur, managing director of real estate research company Cushman & Wakefield India, said, "Though there is no immediate impact on the real estate industry in the Budget, the finance minister has incorporated measures that have a mid- to long-term impact on urbanisation and hence on the real estate industry."

"While the budget is good under the circumstances, what has been left out is a policy level pronouncement for the sector. These announcements could have gone a long way not merely in standardisation, but also in bringing transparency for the real estate sector," he felt.

Anuj Puri, chairman and country head for real estate management company Jones Lang LaSalle Meghraj, said the fact that India Infrastructure Finance Company will be given more flexibility and has been authorised to raise Rs 1,00,000 crore for the development of the infrastructure sector is an indirect boon to the real estate industry.

"Of late, an increasing number of infrastructure projects have a real estate component by virtue of a cross-subsidisation principle. Therefore, boosting infrastructure projects gives an impetus to real estate as well," he said.

The fact that allocation for highway construction has been increased will mean improved and accelerated connectivity, raising the value of existing real estate along these routes and also opening up new areas for development, Puri said. According to him, the allocation increase to the Rajiv Awaas Yojna will help urban slum-dwellers get better houses.

Real estate developers in India pushing up prices

Developers in India have stopped offering discounts on properties and in some cases are even increasing prices as demand rises.

Rising sales are also prompting some developers to return to the luxury end of the real estate market which had stalled in the economic downturn.

'Prices are likely to inch upwards in the coming months in some markets,' said Kumar Gera, chairman of the Confederation of Real Estate Developer's Association of India.

But he added that even an increase in prices will still leave many developments cheaper than they were at the peak of the market a year ago. He estimated that the property crash saw prices fall 25 to 30% but proposed increases in coming months would be around 10 to 15%.

The prices increases vary. Unitech has increased prices marginally, by some 2% in its Gurgaon projects but Mumbai based developer Lodha Group has upped prices by 10 to 15%. A Lodha spokesman confirmed that prices had gone up in luxury projects launched in March. 'We have marginally increased prices every month for these projects since their launch. But the market is in a good spot and the response is still good,' said director Abhisheck Lodha.

Bangalore-based firm Brigade Enterprises cut its prices by 15% in April but has now increased them by 3 to 5% and said that it plans to continue doing so at regular intervals. 'We are hoping that in one year's time, prices will be back to the peak levels of 2007 to 2008,' said chairman and managing director M.R. Jaishanker.

However, discounts through brokers have not yet disappeared from the market. Developers have increased the commission offered to brokers from 3% maximum to 5 to 6%. Brokers in turn are offering a discount of 1.5 to 2% on the price of property to buyers.

'These are the same measures developers and brokers adopted to create a price bubble during the boom years. Demand has not risen to an extent that it can fuel a price increase,' said S.G. Maheshwari, a Mumbai-based property consultant.

Aditi Vijayakar, residential executive director at property consultants Cushman and Wakefield is not convinced the market will carry the price increases. 'Right now it is a fairly confused market. Rates have more or less bottomed out but there needs to be substantial amount of sales before buyers are convinced price increases are justified. I think the real estate market will be flat for some time,' she said.

Union budget ignores real estate development: CREDAI

Reacting to the union budget 2009 -10, Kumar Gera, chairman, Confederation of Real Estate Developers Association of India `s (CREDAI) said, ``CREDAI having more than 4,000 members involved in Real Estate Development across India is utterly disappointed particularly because the Budget has completely ignored the substantial contribution of housing and real estate sector to GDP and Employment of 10 million workers which is second only to the agriculture industry. ``

We are also upset on the fact that the industry which has an impact of over 200 services and industries with forward and backward linkages has been let down.

Since the Government has set a target of achieving 9% growth, we were expecting Housing and Real Estate sector to substantially contribute towards achieving the target, he added.

He mentioned that budget has failed to provide any incentive even to the purchasers of affordable homes. It was widely expected that the exemption of interest on self occupied residential house property presently restricted to Rs 1.50 lakhs per annum would be increased to Rs. 3 lakhs, but nothing has been done in this respect too.

He added that as far as increase of allocation for Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme by 87% to Rs 128.87 billion in the current budget and enhancement of allocation for housing and provision of basic amenities to urban poor to 37.93 billion is concerned, it would provide some relief through government authorities only without much participation by the private sector.

Rajiv Awas Yojana to aim at slum-free India Assetventures

The Rajiv Awas Yojana, announced in the budget, aims at promoting a slum-free India in five years and would focus on according property rights to slum dwellers, Union Minister for Housing and Poverty Alleviation, Kumari Selja, said here today.


"The government has announced a new scheme Rajiv Awas Yojana for the slum dwellers and the urban poor in an effort to promote a slum-free India in five years," Selja said in her inaugural address at the Habitat Business Forum meet on urban challenges and solutions.

Twelve countries are taking part in the conclave which is co-sponsored by UN Habitat and China Real Estate Chamber of Commerce.

The union minister said the scheme will focus on according property rights to slum dwellers and the urban poor by the states and union territories.

"It would provide basic amenities such as water supply, sewerage, drainage, internal and approach roads, street lighting and social infrastructure facilities in slums and low income settlements adopting a 'whole city' approach," she said, adding, it would also provide subsidized credit.

Describing urbanisation as "a great historical opportunity", Selja said the energy of urban growth can be harnessed as a "positive force for human development to create sustainable, equitable, and peaceful cities".

India property sales up Assetventures

India property sales levels have risen by as much as 25-30% since April, following 10-15% growth in Q1 2009, in light of lower interest rates and residential property prices, as well as the construction sector’s greater focus of affordable housing.

This information was obtained by the Economic Times, who spoke to a number of banks, property developers and real estate consultancies.

Much of India’s property sector has struggled for the past year or so due to the global financial crisis, which left several house builders struggling to adapt to deteriorating market conditions.

Residential developers were left with high-end apartments which had no buyers. Consequently, they have been forced to slash prices by up to 45% since the peak of 2007.

The fall in property prices has increased affordability levels across much of India, which has led to increased demand for property in India.

Jones Lang LaSalle Meghraj says that sales across the mid-to-high income segments have conservatively risen by around 25%.

Delhi-based Omaxe reports that sales levels are up by 30% since 2009.

India's largest property developer DLF says it has sold almost 1,500 flats in various cities since April.

Rival Unitech has sold over 4,000 residential units in the last two and a half months.

Hiranandani Developers report that they have sold around 7,000 apartments across the industry, mainly in Mumbai suburbs, over the last two months.