Residential real estate sales rise 85 percent QoQ in Q3 2020
Despite the continuing COVID-19 pandemic, residential home sales aggregated to 35,132 units during the third quarter of 2020, an increase of 85 percent over the previous quarter. The growth can potentially be attributed to pent-up demand due to the prolonged lockdown across the country, a report by real estate brokerage firm PropTiger.com said.
Compared to the third quarter of 2019, there was a significant decline of 57 percent year-on-year across eight major cities, the report said. During July-September 2019, sales of residential properties across eight cities stood at 81,886 units.
New supply grew almost 60 percent on a quarter-over-quarter basis, with 43 percent of the 19,865 units launched coming in through the affordable housing segment. However, on a year-over-year basis, launches showed a significant downward trend declining by 66 percent, the report, titled Real Insight Q3 2020, found.
Recovery in the fourth quarter is likely to continue and new launches will continue to take place in early part of next year.
“Even in October to December, real estate developers are expected to have a decent launch pipeline. The upcoming festival season will also be crucial and will determine the demand outlook for the next 12 months. Discounts and freebies offered by developers during the festive season will help drive demand,” said Dhruv Agarwala, Group chief executive officer, Housing.com, which includes Makaan.com and PropTiger.com
24 states/Union Territories sign pacts with Centre to implement affordable rental housing scheme
As many as 24 states and Union Territories have signed agreements with the central government for implementation of the affordable rental housing complexes (ARHC) scheme mooted by the Ministry of Housing and Urban Affairs during the novel coronavirus, or COVID-19, pandemic for the benefit of urban migrants and the poor and to accelerate entrepreneurship and investment in the rental housing market.
The government is extending several incentives including free Floor Space Index (FSI), concessional project finance, free of cost trunk infrastructure facilities, among others to push participation in ARHC scheme for urban poor and migrants, he said addressing a digital press conference on October 14.
“We are happy that we have received interest from 24 out of 36 states. We are hopeful that the remaining 12 states will come on board soon as this scheme benefits all states governments," Housing and Urban Affairs Minister Hardeep Puri said.
Expression of interests (EoI) have been uploaded on the ARHC portal and the states’ websites, Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs, said.
These states include: Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Meghalaya, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Tamil Nadu, Telangana, Tripura, Uttar Pradesh and Uttarakhand.
Chandigarh, Daman and Diu and Puducherry have also signed the agreement.
The COVID-19 pandemic has resulted in massive reverse migration of workers/urban poor in the country. This brought issues of housing to forefront. In line with Prime Minister Narendra Modi’s call of Atmanirbhar Bharat, the Cabinet on July 8 had approved ARHC as a sub-scheme under Pradhan Mantri Awas Yojana (Urban) to provide ease of living to urban migrants/poor.
To make this a lucrative and viable business opportunity for entities, the government will provide concessional project finance under Affordable Housing Fund (AHF) and Priority Sector Lending (PSL), exemption in income tax and Goods & Service Tax (GST) and Technology Innovation Grant for promotion of innovative technologies in ARHCs.
Commercial office absorption at 6.5 msf in Q3 2020: Colliers
In an indication that office occupiers are returning to the drawing board to close deals that were stalled earlier on account of the COVID-19 pandemic, commercial office absorption has picked up across the top six Indian cities, with the third quarter 2020 gross absorption touching 6.5 mn sq ft, up 58 percent quarter-on-quarter, a new report has said.
However, during January-September, gross absorption fell 46 percent year-on-year (YoY) to 22.5 msf due to the prolonged lockdown in the country, the report by Colliers International India said.
Between January-September, Bengaluru accounted for 30 percent of the total gross absorption, followed by Delhi-NCR and Hyderabad with about 17 percent share each.
Occupiers are now evaluating smaller offices in various locations akin to the hub-and-spoke model, instead of large consolidated spaces, and even de-densifying existing offices so that employees can adhere to social distancing norms, the report noted.
Colliers projects gross absorption in the fourth quarter of 2020 to double from the third quarter of 2020, as offices and businesses open further and occupiers return to the drawing board to plan their real estate portfolio.
Consequently, for the full year 2020, Colliers revised its forecast of gross absorption at 36.1 msf, led by projected 26 percent higher activity in H2 2020 from H1 2020. However, this is likely to be 37 percent lower than 2019 when gross absorption touched a new high.
Gaurs Group clocks Rs 400 crore sales booking in Q2; marginal drop from last year
Realty firm Gaurs Group on Saturday reported a marginal 5 per cent fall in sales booking at Rs 401 crore during July-September, despite demand slowdown in the housing market due to the Covid-19 pandemic.
The group reported sales booking of Rs 421 crore in the second quarter of 2019-20.
“We are known for the timely delivery and quality of our projects, and the name that we have earned over the years helped us get phenomenal results. We were able to contain the downfall which was 37 per cent in Q1 to just 4.8 per cent in Q2,” said Manoj Gaur, MD, Gaurs Group.
“Impeccable marketing strategies coupled with appropriate use of digital marketing helped us to handle the tough market situation,” he said.
Gaur expects a strong sales booking in the second half of 2020-21, compensating for the shortfall in the first six months of the current fiscal year.
“The queries and walk-ins have recovered back to the pre-Covid-19 times. We are about to launch two new projects at Yamuna Expressway during Navratras,” Gaur said.
The company is bullish about growth prospects in the Yamuna Expressway region, driven by infrastructure development like International Airport and the upcoming Film City in the vicinity.
“We delivered more than 30,000 units between 2014 and 2019 – a period which was very challenging for the real estate sector in general,” Gaur said.
The residential segment would continue to be its strength but going forward the company plans to focus on creating commercial assets as well, he said.
“...we are scouting for residential and commercial land parcels around Delhi-NCR,” said Sarthak Gaur, Director, Gaurs Group.
Gaurs Group, which was established 25 years ago, has delivered over 55 million sq ft of area so far.
The group has diversified portfolios of real estate, education, hospitality, malls, retail and is also venturing into healthcare. It is currently developing projects in Noida, Greater Noida West, Ghaziabad and Yamuna Expressway.
Home sales in Q3 2020 rise 2.5 times, launches surge 4.5 times: Knight Frank India
Despite the COVID-19 pandemic, home sales volume jumped by 2.5 times to 33,403 units in the third quarter of 2020 compared to 9,632 in the second quarter of 2020. New residential unit launches increased by 4.5 times to 31,106 units in third quarter, compared to 5,584 units in the previous quarter, a Knight Frank India report has said.
Sales saw an uptick in the third quarter of 2020 over the preceding quarter on account of innovative schemes offered by real estate developers. These included financial benefits, discounts and easy payment options to attract buyers during the period of lockdown. Developers were also able to garner buyer interest through active usage of digital platforms during this period to engage with customers.
Lower home loan interest rate also supported pick-up in residential sales. The acute labour crunch experienced in the earlier part of the lockdown also started to ease out, as workers began to return to main cities seeking employment.
Even while there is a considerable distance from normality, the residential sector has started to show signs of improvement in the third quarter of 2020, the report titled India Real Estate Update (July – September 2020) that analysed the residential and office market performances across eight major cities for the Q3 2020 period, said.
The total residential sales of the top eight markets under review during Q3 2020, reached 54 percent of 2019 quarterly average. Similarly, residential launches in Q3 2020, improved to 56 percent of the 2019 quarterly average. Mumbai, Bengaluru and NCR accounted for 56 percent of the quarterly sales volume during Q3 2020 compared to 62 percent in 2019, primarily due to a fall in Bengaluru’s share in total sales for the same period.
Kolkata was the only market that exceeded the quarterly average of 2019 in both parameters with sales and new launches increasing to 137 percent and 139 percent respectively compared to pre-Covid levels, albeit on a low base.
Rs 10 crore projects inaugurated in Noida
The Noida authority on Sunday started work on six projects estimated to cost Rs 10 crore. These include resurfacing roads and repairing drains and footpath in different sectors.
Gautam Budh Nagar Member of Parliament Mahesh Sharma, Noida MLA Pankaj Singh and the Noida authority general manager Rajiv Tyagi inaugurated these projects.
The work include internal road resurfacing in sector 52 with a budget of Rs 2.4 crore, pavement repair in sector 22 with a budget of Rs 1 crore, drain repair in sector 22 to cost Rs 1 crore, internal road resurfacing in sector 70 with a budget of Rs 2.5 crore, plaster of the flats built by the authority in sector 66 on a budget Rs 1.7 crore and internal road resurfacing along with culvert with a budget of Rs 1 crore.
The authority aims to finish these works in next two months.
The authority decided to carry out these works after residents in all of these sectors demanded road resurfacing and other works to be done on priority basis.
“We have started the work on these projects right after the inauguration so that the residents do not face any inconvenience in future. We aim to finish these works in next two months time. We will put these projects on fast-track,” said Tyagi.
Residents of sector 70 said that broken internal roads were an issue in their locality.
“We had demanded that the internal roads and other maintenance works should be looked into without further delay. And we are happy that the work will be completed in next two months,” said Manoj Goyal, a resident of sector 70.
Mumbai’s real estate revival depends on lesser greed — not from the developer
No segment is as disappointed with the fate of Mumbai real estate as apartment owners of buildings scouting for redevelopment. In the exuberant days of 2006-11, developers were jumping over each other to gain favour among residents of buildings that had potential to get redeveloped. The older the building, the better.
Owners of apartments in creaky and shabby buildings saw the notional value of their houses multiply. The premise was simple: the owner of an apartment in a worn-out building would get a bigger apartment in a new and flashy building - free. If luck had another name in Mumbai, it was redevelopment.
In its simplest definition redevelopment involves the demolition of an old & small building and replacing it with a bigger building – subject to municipal authority norms. The equation is straight-forward: Residents of the old building get apartments in the newer building, a certain number of apartments in the new building are sold in the open market by the developer for his profit and the government earns revenues by selling FSI to the builder.
Eight years later, it will be fair to say that the real estate story in Mumbai has been a major disappointment. Given the paucity of open land, real estate in the commercial capital is predominantly a redevelopment theme. And, things are not looking good.
Redevelopment proposals in the last year have come down by 50 percent. It is certain that 2020 and 2021 will see even a further decline. It is easy to blame the real estate industry for this quagmire, but that would be wrong. Profitability levels are at an all-time low while regulatory accountability is at an all-time high.
A large part of the blame goes towards the notorious level of levies and premiums charged by government authorities. In the current crisis, there may be waivers and deferred payments dangled for a limited period but it is unlikely to be sustained. From 2022, the journey towards bankruptcy of the BMC is likely to begin as the central government stops compensation in lieu of octroi.
With this is mind the only way to get redevelopment kick-started is by reducing the land cost for a project. In redevelopment – the land cost is the expense borne in construction of the free flat for the old owner, the transit rent paid to the owner when redevelopment is being done, the corpus that acts as a security etc.
Housing crisis under New Zealand election scanner as kiwis miss out on dream
Chris Rodley says the New Zealand coastal city of Nelson, in a region known for its vineyards and stunning landscapes, has always been a magnet for job seekers.
Yet those attributes are being eclipsed by a chronic nationwide housing shortage, making it difficult even for high-income professionals to find a home and impeding growth at his technology firm.
New Zealand's housing crisis is creating a policy headache for Prime Minister Jacinda Ardern as she seeks a second three-year term in the October 17 polls, turning the longstanding problem into a hot-button election issue.
The housing shortage and sky-high property prices are affecting broad sections of the population, locking out young first-home buyers and putting more pressure on those living on the margins.
Middle-income New Zealanders are also getting squeezed at a time when the COVID-19 pandemic has jolted the $200 billion economy into its deepest slump in decades.
"New Zealand is a ludicrously attractive place to live in right now, which is helpful for me," said Rodley, the CEO of SnapIT, a tech firm that provides camera tracking equipment on boats.
"But to grow my company it's not just that housing is too expensive, it's simply that there just isn't anything."
Pollsters are predicting an election victory for Ardern, who has won global praise for her handling of the COVID-19 outbreak and other crises. All the same, the housing problem is threatening to not only blot her pristine credentials but also upend the economy and leave deep social scars.
New Zealand's central bank warned last year that rapid house price inflation over the past decade could lead to a sudden correction and threaten financial stability.
New Zealand has a shortage of over 100,000 homes, industry experts say, but from June 2018 through to July 2020 the government has built or helped build only around 6,000 homes with another 4,000 under construction.
The problem, according to these experts, is that it costs too much and takes too long to build a house in New Zealand.
Successive governments have failed to ease the red tape around land approval, making land artificially scarce. For private developers the costs and consent process are significant hurdles, making properties unaffordable.
Developer asked to pay Rs 5 cr for delay in property hand over in Mumbai
The Bombay High Court has directed real estate developer Renaissance Infrastructure to pay Rs 5.04 crore as compensation to a person who had not been handed over his property in Mumbai even after a delay over 80 months.
A single bench of Justice S C Gupte on September 25 upheld the orders of the Maharashtra Real Estate Regulatory Authority and the RERA Appellate Tribunal that had ordered for the compensation amount to be paid to the purchaser.
The developer had approached the HC, challenging orders of RERA and the RERA Appellate Tribunal passed in January this year.
As per the HC order, the purchaser bought six plots of land and some warehousing buildings from the developer in December 2009.
According to the sale agreement, the warehousing buildings and plots were to be handed over to the purchaser by March 9, 2010.
The agreement also said that if the developer failed to hand over the properties on time, he would be liable to pay the purchaser a compensation amount at the rate of Rs 10 per sq ft per month.
When the developer failed to hand over the property, the purchaser approached the RERA that calculated the compensation amount as Rs 5.04 crore.
The Renaissance Infrastructure challenged this order before the appellate tribunal, which asked the developer to deposit 50 per cent of the compensation amount as per the RERA Act for entertaining the appeal.
But, when the developer failed to pay the pre-deposit, the appellate tribunal dismissed the appeal.
The developer then filed a second appeal in the HC.
In his order, Justice Gupte dismissed the second appeal after holding that there were no infirmities in the orders passed by the RERA and the appellate tribunal.
He held that the orders do not give rise to “any substantial question of law for the consideration of the High Court”.
Justice Gupte said the Renaissance Infrastructure was liable to hand over the property as agreed to.
“Under this agreement, termed as agreement for sale, the appellant (Renaissance) was bound to hand over possession of the suit premises to the respondent within an agreed period,” the high court said.
It directed the developer to pay Rs 5.04 crore to the purchaser within four weeks.
SquadStack raises $5 million in Chiratae Ventures-led funding round
SquadStack has raised $5 million in its series A funding round, led by Chiratae Ventures, along with its existing investor Blume Ventures.
The New Delhi- and San Francisco-based startup works with companies to help them sell services to customers through improved conversion of business leads through its product SquadIQ.
Till date, the company had raised around $2.5 million. Now, the company wants to use the funds for product development, expanding the data science teams -- both in India and the US – and for hiring top talent.
Companies like Zomato, Walmart, Delhivery, Upstox, Zest Money and the Tata Group use their services to reach out to customers to sell high- ticket items via phone calls and improve sales efficiency.
The startup can capture about 40 data points from customer leads, on the basis of which it helps track customer persona, processes them and helps companies in their sales.
SquadIQ was launched in 2018 in India and has now been taken to the US as well, targeting the real-estate segment. Otherwise, SquadIQ helps sell high-ticket products and services across financial services, education, healthcare and retail.
“We have worked with companies across the spectrum and our expertise is in converting leads into sales -- that is where we have found our sweet spot and using our advanced technology, we are offering these services to our clients,” said Saswata Shankar De, general manager of SquadIQ business.
In 2019, SquadStack launched its products for the US real-estate sector and had seen strong growth till COVID-19 hit the industry and caused a massive slowdown.
Now, American brokers are looking for software solutions to maximise their profitability and boost team performance during these tough times. This led to the creation of 'Auctm', a business management platform that helps broker teams boost revenue, cut costs, and improve agent training and retention.
Second pre-bid meeting for redevelopment of New Delhi Railway Station held
The Delhi Development Authority (DDA) will amend the rules that will enable the agency to auction land to private developers for residential projects, in a proposal aimed at meeting the growing demand for housing in the capital city.
The proposal, was approved last year, permits the amendment in the DDA (Disposal of Developed Nazul Land) Rules, 1981.
In a meeting chaired by Delhi’s lieutenant-governor (L-G) Anil Baijal in August 2019, the DDA had approved the proposal to auction residential plots meant for allotment to Cooperative Group Housing Societies (CGHS) to private developers. It was a first-of-its-kind effort by the DDA, which is the main developer in Delhi, to allow private players to develop housing in the national capital.
In January and May, the land-owning agency had advertised for auctioning of seven and nine group housing plots, respectively. The plots were withdrawn from the auction list following an order issued on July 28. These plots were located in areas such as Rohini, Dwarka and Narela, and measured up to three acres or over 5,000 square (sq) metres (m).
The idea behind the decision was to gradually allow private developers or CGHS to develop housing projects in Delhi.
Private developers, who are allotted land after auctions, will be required to construct housing facilities in keeping with the MPD, 2021, which earmarks 15% of the developed area for people who belong to the economically weaker sections (EWS) of the society.
According to a DDA official, who spoke on condition of anonymity, only one CGHS plot has been allotted on the basis of court orders since 2005.
DDA has allotted 884 plots to CGHS to date.
“This land can’t be auctioned until the ministry notified the changes in the rules. But this is a good move, as it will ensure better construction quality and at competitive pricing,” said Sabyasachi Das, former planning commission, DDA.
Master Plan of Delhi 2041: DDA officials, resident associations discuss city development initiatives
Top officials from the Delhi Development Authority (DDA) and National Institute of Urban Affairs (NIUA) on September 22 held a meeting with representatives of several resident welfare associations (RWAs) of group housing colonies to seek their suggestions for the formulation of the Master Plan of Delhi (MPD) 2041.
The meeting was held on WebEx online platform. As many as 70 residents and RWAs registered through emails.
The DDA, in partnership with NIUA, is currently preparing the Master Plan for Delhi 2041.
The meeting was chaired by Leenu Sahgal, commissioner (Planning), and HK Bharti, additional commissioner, planning from DDA.
The participants were asked to share their suggestions towards improving the built environment, civic facilities and other planning concerns such as redevelopment, open spaces, water supply, solid waste management and parking.
The main concerns shared by participants included issues with regard to shared facilities and spaces.
The issue of access, maintenance and security of shared and common spaces such as terraces, ground floor frontage, parks, common toilets and security facilities was also discussed, DDA said in a statement.
RWAs also shared that some colonies had adopted good practices for solid waste management while others still had the issue of collection and segregation of waste.
They insisted that the focus should be on promoting solar panel installation, underground cabling of electricity and OFC infrastructure, which may be included in future plans.
Participants expressed their consent to take part in the improvement and redevelopment of their colonies in a planned and phased manner. Augmentation of existing infrastructure, ensuring fire safety and provision of lifts were other concerns of improvement related to redevelopment and upgradation, the statement said.
Some of the participants also suggested creating a specific redevelopment policy for group housing colonies with planned densification, upgradation of infrastructure and the need for a robust implementation framework for Master Plan 2041.
The DDA public portal is open for all residents of Delhi to share their views for the future of the city that will become part of a larger vision and strategy for MPD-2041.
MPD-2041 is a vision document for the city’s development. It is expected to focus on development in all unauthorised colonies and provisioning for social infrastructure in illegal colonies.