Affordable housing to play a key role in 2010, says CREDAI

Affordable housing to play a key role in 2010, says CREDAI




Affordable housing segment is set to play a key role in India's real estate sector in 2010 on the back of a significant pick up in
demand, a top industry body has said.

"Affordable housing will be a key factor in driving the sector and we have already started working on progressive solutions in this area for effective and customized implementation of such projects," Confederation of Real Estate Developers' Associations of India (CREDAI) Chairman Kumar Gera said.

An upturn in the economy and the Government's ongoing efforts to push growth in the infrastructure are expected to help the sector regain the growth trajectory, CREDAI said.

"This year will be crucial for the housing industry given the Government's concern over the massive housing needs of the people, especially in urban areas," Gera said.

Noting that the economic recovery would help India's real estate sector to return to the 2007-08 level, Gera said 2010 is expected to be a positive year for the segment.

The revival is expected to be driven by infrastructure growth, which, in turn, can accelerate real estate activities both in the residential as well as commercial spaces, he said.

2010 to be a good year for realty, says Credai

Chennai: Confederation of Real Estate Developers’ Associations of India (CREDAI) is hopeful of a positive year for the India real estate industry in 2010 and the market is expected to return to the 2007-08 level. Given the right opportunity and supportive policies, the real estate sector too would prove effective in driving the country's GDP growth. Infrastructure development is an area which will play a vital role as increased connectivity in terms of roads, rail and communication will lead to development in real estate. Development of other asset classes like warehousing, logistics, tourism and hospitality would also boost real estate activity.

Kumar Gera, chairman, CREDAI, said: “This year would be crucial for the housing industry given the government's concern over the massive housing needs of the people, especially in the urban areas. Supportive policies to encourage and aid the housing requirements of all sections are expected to propel the development in the real estate and allied sectors as well. Affordable housing would be a key factor in driving the sector and CREDAI has already started working on progressive solutions in this area for effective and customised implementation as suited to the Indian situation through NATCON 2010. Also, focus on tier II and tier III cities besides metros will help widen market and generate demand.”

Overseas Indians hesitate to take the property plunge on home turf

Even with a vast wealth base, overseas Indians are reluctant to invest in real estate in India. Despite the government having relaxed its property ownership laws for Non Resident Indians (NRIs), on Day 1 of the Pravasi Bharatiya Divas, the NRIs had some horror stories to narrate about investing in property in India.

“I waited 20 years before investing in property in Delhi. I was worried that I would get cheated. Even after taking all the requisite precautions, I quickly discovered that the previous owner of my property had sold the same property to two people at the same time. I took the case to court, where there has been no resolution for the last eight years, during which time four different judges looked into the case,” said an NRI from Washington DC.

The lackadaisical approach adopted by Indian courts came in for a lot of criticism during a day-long session titled “Property Related Issues of NRIs/PIOs” held at Vigyan Bhawan on Thursday. “After the case was filed, I flew down on three different dates from Washington to attend the hearing, but each time the defendant excused himself from the hearing by offering different excuses through his lawyer. Each time the case was adjourned,” the NRI said.

While the Indian government has advised all NRIs not to give a “general power of attorney” for their property to anyone, even relatives, those attending the conference complained that the ground reality was in conflict with such advice.

“I invested in a property in South Extension and even for something as mundane as getting a power or a water connection, my representative was asked to produce a general power of attorney. The authorities refused to accept a special power of attorney,” V K Chadda, a Hong Kong resident, said.

A presentation on the subject made by Dr Justice A R Lakshmanan, a former judge of the Supreme Court, highlighted steps that may be taken to remedy the current situation.

Chief among them was the suggestion to set up fast-track courts to deal with such cases in a time-bound manner.

A Didar Singh, secretary, Ministry of Overseas Affairs, said the government was “attempting fast track resolutions,” of such cases. He also added, “You must realise that most Indians face the same problems as you do. It is not a problem unique to NRIs. We’re a developing country and all attempts are being made to rectify the system. Having said that, a tremendous amount of investment is being made in India and it is as safe a place as any to invest.”

Addressing the gathering, Vyalar Ravi, Minister of Overseas Indian Affairs said, “As the state government property laws differ from state to state, consultation meetings have been organised with all states and all major states have responded positively by establishing individual departments or cells to deal with the NRI issues.”

Despite the assurances, the NRIs left the session as wary as ever. “It is a little patronising of the government to ask us to take precautions while investing and to consult professionals. We do that anyway, and still end up being cheated. It is a problem that needs to be addressed,” one of the NRI’s attending the conference said.

Affordable real estate will drive growth in Indian property market in 2010, experts claim

Affordable property is set to play a key role in the residential real estate sector in India in 2010 on the back of a significant pickup in demand, according to the country’s developers association.
An upturn in the economy and the Government’s ongoing efforts to push growth in the infrastructure are expected to help the sector grow this year, said Kumar Gera, chairman of the Confederation of Real Estate Developers’ Associations of India (CREDAI).
‘This year will be crucial for the housing industry given the Government’s concern over the massive housing needs of the people, especially in urban areas,’ Gera explained.

‘By the end of 2010 we expect prices in the real estate sector to roll back to at least 90% of the level prevalent in 2007/08,’ he added. CREDAI estimates that values have fallen by 20 to 35% on average across different regions in the country since August 2008.

Real estate growth expectations are based on an assessment of GDP growth by CREDAI, the global revival, domestic sentiments and on the assumption that there would be no major unforeseen fluctuations in the economy or natural calamities this year, he explained.

The real estate market in India was most hit by the downturn between August and October of 2008 when the sales almost came to a standstill.
There were some early signs of recovery in March 2009 and since then prices have stabilised and sales went on to improve considerably by the end of the year, Gera also said.

The growth of the information technology sector in different markets such as Bangalore, Pune and Kolkata will help drive the growth of housing in the regions irrespective of the national IT scenario, he said. And US economic recovery would help stabilise the situation in the IT sector and activities in the Special Economic Zones (SEZs) in the country, he added.

Infrastructure is also set to aid the property market revival on a local basis. In Mumbai prices are already rising at the prospect of the city’s second airport coming up near Khargar. According to Gulam Zia, national director for research and advisory services at Knight Frank, the Navi Mumbai area is likely to grow faster than other location.

Opening may be some six to seven years away yet, he said, but it is already a factor along with a new trans-harbour link and extensions to the metro network.
Generally it is southern cities that will see growth, according to Zia, but places like Kolkata in the east are also expected to see substantial growth, led by the IT industry.
‘Other emerging locations include Mahesh Tala and Tara Tala. Many new townships are being constructed in Tara Tala, gradually transforming it from an industrial zone to a residential township. This will be a promising area in the future,’ Zia added.

Overseas Indians face big problems when investing in Indian real estate

New Jersey-based Client is embroiled in a bitter dispute with her own family members over a 10,000 sq ft property in Gurgaon.

"I had invested in the property in 1999 and issued a limited power of attorney to my brother to oversee the construction on the site. My nephew was employed by me with a salary to help with the construction of the house. My investment is a few crores, but since 2006 my brother and his family have taken over illegal possession of my house. And because I don’t live in India they have bribed the local agencies, and I’m not able to get my property back," she says. There’s hardly anything unusual about this episode, except when you learn that Verma is a lawyer herself.

"The local police and courts have not helped me in any way even though I have approached them and since I have a law practice in the US, I can’t spend too much of time here fighting against my own family," says a desperate Verma. While it is ironic that a legal expert finds herself in this situation, many other prominent overseas Indians too encounter similar problems while investing in Indian property.

It could start with a dream to own a modest home in one’s country of origin. Or it could even be an emotional bond that a second generation person of Indian origin feels with her parents’ homeland that makes her seek transfer of title of family property willed to her in a village in Punjab. Or it could turn into a poignant court battle by an aged NRI couple which wishes to return home from the West but find that unscrupulous land-grabbers have taken possession of their apartment in Mumbai.