Housing sales declined by 11 per cent during the last fiscal to 3.22 lakh units across nine cities, but demand for ready-to-move-in flats increased by over 19 per cent, driven by nil GST and no risk of any delays, according to PropTiger.

The sales of under-construction apartments dipped 16 per cent to 2,58,281 units in the the last fiscal as against 3,08,113 units in 2018-19.

US-based News Corp-backed housing brokerage firm, in its report Real Insight Q4’2020, also highlighted that the share of completed apartments in the total housing sales grew to 20 per cent during the last fiscal from 15 per cent in the previous financial year.

As per the data, total housing sales declined to 3,22,667 units across nine cities during the 2019-20 fiscal compared to 3,62,021 units sold in 2018-19.

However, the sale of completed units rose to 64,386 units last fiscal from 53,908 units.

PropTiger tracks property markets of nine cities, including Ahmedabad, Bengaluru, Chennai, Gurugram (includes Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (includes Navi Mumbai and Thane), Pune and Noida (includes Greater Noida, Noida Extension and Yamuna Expressway).

“Housing demand remained subdued during FY’20 because of the slowdown in the country’s economic growth. The global outbreak of coronavirus during the January-March quarter added to the woes faced by the Indian real estate sector over the last few years. Housing sales are generally higher in the second half of the fiscal and hence the impact of Covid-19 was more pronounced.

“With under-construction projects likely to be delayed because of the nationwide lockdown, we strongly believe that customers’ preference towards completed units will further strengthen,” said Dhruv Agarwala, Group CEO, PropTiger.com, Housing.com and Makaan.com.

The consultant said the demand for ready-to-move-in residential properties is growing as customers have become risk averse because of uncertainties involved in the completion of under-construction flats.

The share of ready-to-move-in residential properties in the overall housing sales may rise to reach 30 per cent during the current fiscal, it said.

At the end of the 2019-20, these nine cities had 7,38,898 units of unsold inventories, of which 20 per cent were completed ones.

PropTiger pointed out that project delays by multiple builders have shaken buyers’ confidence in the property market.

However, it said the Rs 25,000 crore stressed assets fund, which has been created by the government to help complete over 1,500 stalled housing projects across the country, would go a long way in bridging the trust deficit between developers and prospective homebuyers.

The consultant said that housing demand is likely to further shift to branded as well as organised developers and brokers.

Covid-19 pandemic would also accelerate the adoption of new digital tools and technologies by both property developers and brokers to sell housing units.

With an eye on the urban poor, migrants and mid-income families, finance minister Nirmala Sitharaman announced several incentives to provide low-cost rented accommodation and interest subsidy on home loans.

The government on Thursday extended till March 2021 the benefit of interest subsidy on home loans under the Credit Linked Subsidy Scheme (CLSS) for households that fall in the middle-income group with an annual income of between Rs 6 lakh and Rs 18 lakh. The scheme, introduced in 2017, ended on 31 March.

Sitharaman said the Union government will launch an affordable rental housing scheme under the Pradhan Mantri Awas Yojana (PMAY) to help migrants and urban poor find housing. The Centre will convert government-funded housing into affordable rental housing complexes under a public-private partnership (PPP), she said.

The incentives came a day after the FM granted a six-month extension of the registration and completion date for all projects registered under Real Estate Regulatory Authority (RERA), offering some relief for distressed developers. This will apply to all real estate projects expiring on or after 25 March, 2020, and individual applications are not needed.

Sitharaman said the CLSS scheme has benefited 330,000 middle-class families and is expected to benefit another 250,000 in FY21.

According to government estimates, the subsidy scheme will give a Rs 70,000 crore boost to the housing sector. Besides creating jobs, it will also stimulate demand for steel, cement, transport and other construction material.

CLSS, which comes under PMAY for middle-income group households, was unveiled in 2016.

Sitharaman said manufacturing units, industries and institutions will be given incentives to develop affordable housing complexes on their private land. Central government agencies and state government organizations will also be encouraged to develop housing complexes.

Providing relief to thousands of homebuyers in Chennai, the registration department in Tamil Nadu has clarified that while registering an apartment, only the undivided share of the property will attract stamp duty and registration charges and not the built-up area.

The move comes in the wake of some sub-registrar offices demanding to register the built-up area along with the UDS of land, causing great hardship, mental agony besides making the allottees to incur huge and unnecessary expenses for the registration of built up area which is not approved by law.

With 4 percent registration fees and 7 percent stamp duty, Tamil Nadu charges one of the highest registration fees and stamp duties among Indian states. It is important to register the construction agreement along with the sale deed of undivided share in the state.

The inspector general of registration on May 11 issued an order that clarified that “If a document is presented for registration of (first) sale of undivided share of land only, the registering officers are hereby instructed not to demand or insist for inclusion of building in the subject matter of sale document for the sole reason that completion certificate has been issued by the competent authority to the project.”

However, it is also instructed that there is no impediment to register separate construction agreement as envisaged in the circular dated Oct 28, 2013.

A letter written by chief secretary to the state government to the inspector general of registration on March 18 had said that in respect of development of a large building or apartment complex, the proposed allottee, who envisages to acquire the apartment enters into an agreement of sale of UDS of land with the holder (vendor) of the land and a separate construction agreement with the builder/developer contractor for construction of apartment. Both these agreements are registered as per relevant provisions of law.

“For the building where the completion certificate has been obtained, the sub registrars are insisting that the conveyance deed or the sale deed for UDS in land should also include the sale of built up area. The completion certificate has nothing to do with the title of the land. It is settled law that what is conveyed only should be taken into account for registration purpose by citing the judgments delivered in the division bench of Madras High Court,” the letter said and sought a clarification.

The construction agreement is being registered under the provisions of the law with a stamp and registration fee of 2 percent on the agreement value, it had.

Suresh Krishn, the president-elect of the Confederation of Real Estate Developers' Association of India (Credai), told Moneycontrol that it was only a clarification. Tamil Nadu follows a dual agreement system as both land and buildings are registered separately with the concessionaire agreement.

“It has now been clarified that even for the first sale of any apartment, the undivided share and the apartment can be registered separately,” he said, adding this has put to rest all confusion on the matter.

“This comes in as a huge relief to homebuyers,” said Iyarappan B, General Secretary - Uniworld Chennai Owners Association.

“The buyer now gets to pay registration charges and stamp duty basis the undivided share and not the super built-up area. If the UDS is 500 sq ft, the buyer would have to pay registration fees basis that area and not 700 sq ft which is the super built-up area. Through this clarification the government has reinstated its earlier order,” he said.

As many as 1,500 industries, which employ around 70,000 people, and 100 construction projects that will need at least 8,000 labourers have been allowed to resume work in Noida. But 1,800 applications have been turned down as they didn’t meet COVID-19 norms, Ritu Maheshwari, the chief executive officer of Noida Authority, tells Moneycontrol’s Vandana Ramnani in an interview.

Edited excerpts:

The first prerogative of the team is to grant permissions to industries and construction companies, wherever it is permissible.

Broadly, all permissions are being granted with conditions of social distancing, sanitisation of their campus, use of masks and random testing as and when the industry resumes operations. It is for the industries to comply. It is for their safety and the safety of the citizens.

In COVID times, we can’t check each and every industry and there is no such team to do so. As many as 6,000 applications have been received and everybody who is getting rejected is applying multiple times. It is an unending process and the industry department cannot check 1,500-odd industries.

The focus is on self-discipline currently. But once all permissions have been granted, we may look at the issue of compliance. Our first priority is to get the industries restarted. The industry department is currently dealing with only granting permissions and rejections. Once the process is streamlined, the second stage could involve randomly checking a few of the industries and ensuring that COVID-19 norms that include social distancing are being maintained.

Having said that, if there is violation, the industry would be closed again and then it may take a long time to resume work. It is, therefore, up to them to take precautions.

There have been several guidelines that have been issued to industries and the government has said permissions have to be granted on a declaration and that is what we are doing.

It has to be both ways, we have to resume economic activity and we have to ensure safety. There has to be a balance between the government and the specific industry. Both have to be cautious. We are constantly interacting with associations and asking them to abide by the norms.

A survey has showed that around 16 percent landlords waived rent for up to two months, while another 41 percent gave tenants extension on rental payments in view of a financial crunch during the coronavirus lockdown.

The survey, conducted by property classified 99acres.com which is owned by Info Edge India Ltd, polled 49,600 house owners and brokers who have listed properties for rent or sale. The survey's motive was to assess the impact of the coronavirus pandemic on the property market.

"Most of the landlords are extending a helping hand to the tenants - 44 percent have not increased the rent, 41 percent are giving more time to their tenants to pay and 16 percent have waived the rent for up to two months," the portal, which has over 10 lakh residential and commercial properties listed by owners and brokers, said in a statement.

Despite the sluggish market, 76 percent owners are still looking for renting out their property, whereas 24 percent have postponed the search for tenants.

Majority of the owners (54 percent), who want to rent out their property, expect the rental prices to go down, while only 11 percent are anticipating a rise, the survey said.

Around 80 percent owners, who want to sell their properties, will continue to look for prospective buyers, while 20 percent have postponed their selling plans. As much as 45 percent owners expect the prices to fall, while only 10 percent are anticipating a rise.

Regarding COVID-19's impact on property brokers, the survey found out that 57 percent brokers expect demand to go down post coronavirus, while 29 percent are uncertain about future changes.

According to the survey, there will be increased use of digital tools by developers and brokers to market their products.

Keeping in view the difficulty being faced by public, the Haryana government has decided to allow registration of instruments pertaining to transfer of property under Section 17 and 18 of the Registration Act, 1908, in all tehsils and sub-tehsils (except in the containment zones) between 10 am to 4 pm on all working days.

An official spokesperson said that it has been decided to limit the number of deeds to be registered in tehsils and sub-tehsils to 45 per working day with a gap of eight minutes each to maintain social distancing and avoid crowding. The executants of the instrument will visit the tehsils only after seeking prior online appointments.

He said that other work relating to delivery of copies of revenue records, registration deeds, entries, attestation of mutations, affidavits and issuance of various types of certificates, such as scheduled caste certificates, backward class and OBC certificates, residence and domicile certificates, income certificates can be carried out during office hours on all working days.

After Gurugram, construction work is expected to resume in Noida on May 5 but real estate developers say the biggest challenge they face is that almost 50 percent of the workforce may return to their villages and construction work may get further delayed by a year.

The government on May 1 extended the nationwide lockdown to contain novel coronavirus, or COVID-19, by two more weeks. Construction activities in urban areas have been limited to in-situ construction, where workers are available on site and no workers are required to be brought in from outside, and construction of renewable energy projects, the guidelines said.

The government has also permitted labourers to return to their hometown.

Real estate developers stopped construction works on sites following the nationwide lockdown imposed from March 25 to contain the pandemic.

The government on April 15 had relaxed guidelines in lockdown 2.0, permitting some construction activity in non-COVID-19 hotspots starting April 20. However, this builders would have to ensure strict social distancing guidelines and were applicable to projects construction workers were locally available on the site.

Under the new guidelines, contractors along with developers will need to ensure that social distancing is maintained at sites and will need to find ways and means of achieving it. For basic hygiene and safety precautions, companies can regularly sanitise sites and provide labourers with masks, soap and sanitisers for washing hands frequently.

NAREDCO-Uttar Pradesh President RK Arora told Moneycontrol that construction would resume in some projects in Noida, Greater Noida and Yamuna Expressway from May 5 after developers secure permissions from authorities.

“Construction restarted at our sites in Gurgaon on May 4 and it will resume at our sites located in Noida, Greater Noida and Yamuna Expressway from May 5. As many as 4,500 labourers are working across our sites,” he said.

However, he said a lot of migrant workers may want to return to their native place following the central government’s permission. “This is our biggest fear and if that happens, projects may get delayed by almost a year,” he said.

In Ghaziabad, the administration issued guidelines for resuming construction work on May 4. Gaurav Gupta, President, CREDAI NCR, said Ghaziabad administration has issued standard operating procedures (SOPs) under which permission to restart construction would be issued online.

“Construction has been permitted only for labourers residing within the site. We would have to conduct medical tests conducted on all our labourers and provide an affidavit stating that we would comply with all the guidelines and observe social distancing norms,” he said.

“Our biggest worry is that almost 50 percent labourers wish to return to their hometown and that would delay the project further,” he said.

The Gurugram Metropolitan Development Authority (GMDA) has also allowed work to resume at 60 construction sites, provided workers reside on the premises and social distancing norms are followed, CEO VS Kundu had told Moneycontrol.

“Around 60 sites have been given permission to restart construction in Gurugram. The chief consideration was that labour should be staying on the premises and they should not be transported,” Kundu, who is also additional Chief Secretary of Haryana, said.

Parveen Jain, Vice Chairman, NAREDCO and CMD, Tulip Infratech Pvt, told Moneycontrol his firm received GMDA’s permissions to restart work at three sites.

“As many as 500 labourers are currently residing across the three sites. The biggest challenge is to retain them now. We had a total of 800 before the pandemic broke out,” Jain said.

Jain said availability of cement was proving to be a big challenge. “It (a bag of cement) is currently retailing at Rs 350 per bag. We have requested the government to step in and resolve the matter,” he said, adding there should be no supply chain hindrances or it would lead to another six months of delay.

Before the lockdown, a bag of 50-kg cement retailed for Rs 180.

Signature Global Group has been granted permission to resume construction across 17 projects in Gurugram and Karnal, said Chairman Pradeep Aggarwal, who is also the Xhairman of ASSOCHAM National Council on Real Estate, Housing and Urban Development.

“We hope to receive permissions to restart work on the remaining seven projects within a week,” Aggarwal said.

According to KPMG, total construction projects worth more than Rs 59 lakh crore are under development, most of which would have been impacted severely by COVID-19. The Indian construction sector employs over 49 million people, close to 12 percent of the nation’s working population. Further, it has a multiplier effect on nearly 250 allied industries.

The government on May 1 extended the nationwide lockdown to contain coronavirus by two more weeks. Construction activities in urban areas have been limited to in-situ construction where workers are available on site and no workers are required to be brought in from outside and construction of renewable energy projects, the guidelines said.

It announced that a "limited" lockdown, including suspension of inter-state travel, air and train services, will continue to remain in force for another two weeks throughout the country from May 4 but some activities would be allowed after classifying areas into Red, Orange and Green zones.

“The lockdown extension comes along expected lines, the classification into red, orange and green zones, given the number of infected patients had largely crated the expectation of red zones seeing extension of the lockdown – which has happened.

"The aspect of saving lives cannot be emphasized more, having said that, the move of allowing some economic activities to restart in green and orange zones is a much needed move. Ideally, we also need some economic activity restarted in red zones too, obviously with due protection and following norms as laid down by the authorities,” said. Niranjan Hiranandani, president, NAREDCO.

The government on April 15 had relaxed guidelines for lockdown 2.0 permitting some construction activity in the non-COVID-19 hotspots starting April 20. However, this was only provided strict social distancing guidelines are followed and construction workers are locally available on the site.

Under the guidelines, contractors along with developers will need to ensure that social distancing is maintained at the sites and will need to find ways and means of achieving it. For basic hygiene and safety precautions, companies can regularly sanitize sites and provide labourers with masks, soap and sanitizers for washing hands frequently.

Real estate experts said the resumption of construction activity would send out a positive message to both investors, occupiers and homebuyers. It would ensure healthy cashflows at least for projects that are close to completion and unlock further investment potential.

Also, it is the well-funded projects that are likely to see immediate construction activity after lockdown is lifted. Developers will first look to start with projects that are already nearing completion to generate positive cashflows. Public infrastructure projects are also likely to take off first.

According to KPMG, total construction projects worth more than Rs 59 lakh crore are under development, most of which would have been impacted severely by COVID-19. The Indian construction sector employs over 49 million people, close to 12 percent of the nation’s working population. Further, it has a multiplier effect on nearly 250 allied industries.

The Gurugram Metropolitan Development Authority (GMDA) has allowed work to resume at 60 construction sites, provided workers reside on the premises and social distancing norms are followed, CEO VS Kundu had told Moneycontrol.

“Around 60 sites have been given permission to restart construction in Gurgaon. The chief consideration was that labour should be staying on the premises and they should not be transported,” Kundu, who is also additional chief secretary of Haryana, said.

Union Minister Nitin Gadkari on Wednesday exhorted real estate players to sell unsold housing units even at no-profit-no-loss to boost their liquidity condition and save interest cost on loans.

The outbreak of coronavirus disease has impacted the real estate sector, which was already reeling from the demand slowdown, the road, transport and highways minister said while addressing a webinar organised by realtors’ body NAREDCO.

Promising his full support, Gadkari, who also holds the MSME portfolio, advised builders to send their representatives to ministries of housing and finance as well as the Prime Minister’s Office (PMO) to suggest ways to deal with the present crisis.

To tide over the crisis caused by Covid-19 and create housing demand, the senior minister offered a slew of suggestions to builders, ranging from business expansion in rural areas to diversification in road construction to setting up of their own housing finance companies.

Citing an example from the automobile industry where many manufacturers are having their own finance companies, Gadkari said real estate companies could consider establishing their own housing finance companies to give loans to customers at lower rates and not be fully dependent on banks.

He said there is a need to strengthen non-banking finance companies (NBFCs) through equity infusion from the government and private players.

The NBFCs should tap funds from international markets where interest rates are lower.

The minister pitched for lower interest rates on home loans with a longer tenure so that the customers’ equated monthly installments (EMIs) remain less.

On builders sitting on huge unsold housing inventories, Gadkari advised builders, “Don’t be greedy. You will not get a premium price. Whatever price you are getting, sell your properties to boost liquidity and move forward.” He said there are many builders in Mumbai who are not clearing their unsold stocks and rather they are waiting for prices to increase to Rs 35,000-40,000 per sq ft.

“They are committing mistakes. Interest cost to banks, financial institutions and private lenders are increasing,” the minister said.

The plan is also to develop townships along Mumbai-Delhi corridor, he informed.

Gadkari also told builders to expand their businesses in small towns and villages with affordable housing projects below Rs 10 lakh and not only focus on big cities.

NAREDCO National President Niranjan Hiranandani said the real estate sector has been struggling for the last few years because of instability created by reforms like demonetisation, GST and the real estate regulatory law RERA.

Investments in the Indian real estate market increased 27 percent to touch $6 billion in 2019, CBRE South Asia said in a report.

Investment activities were dominated by the office sector and the development sites and land, with each commanding around 40 percent of the inflow of funds.  This was followed by 11 percent investment in hotels.

The investment activity in all the key segments was led mostly by foreign players who contributed to the tune of 65 percent. The total investment made by the domestic players in various real estate projects accounted for 35 percent.

The key gateway cities of Mumbai, NCR, Bengaluru and Hyderabad led the investments.

The investment in development sites or lands in 2019 saw a 5 percent increase as compared to 2018. The hotels' segment saw a 10 percent increase in the total investment against that of 2018, the report said.

“The healthy investment activity in the real estate sector is a testimony of its performance and resilience. With the industry becoming more organised, transparent, and profitable, it will continue to attract investments from global as well as domestic players. The steps initiated by the government to increase liquidity in the market has also worked well in increasing the confidence of investors,” Anshuman Magazine, chairman and CEO, India, South East Asia, Middle East and Africa, CBRE.

The findings also mentioned that the sector received a total investment of $4.8 billion in 2018. City-wise the investment activities were led by Mumbai, National Capital Region (NCR), Bengaluru and Hyderabad, the report said.

Corporates may have discovered the viability of employees working from home (WFH) during the coronavirus pandemic as an alternative to occupying costly office spaces but it is not a one-size-fits-all workplace alternative, as many business verticals and functions still require employees to work in an office setting, an analysis has said.

A large chunk of work needs constant monitoring and professional infrastructure which only an office setting can provide, property consultant ANAROCK has said.

While it has several advantages, work from home cannot work for every type of company. Most major industries have functions which require a high level of centralized supervision as well as data security which are only available in a formal office setting.

Most employees depend on the infrastructure provided in their offices to do their work efficiently, and also require a formal office setting to get into ‘work mode’.

While WFH is not a one-size-fits-all workplace alternative, social distancing norms are likely to remain in place for a while to come and more and more companies will need to consider this option, said Ashutosh Limaye, Director and Head - Consulting, ANAROCK Property Consultants.

What is certain is that commercial space requirements are in for a major upheaval, as India Inc will not hit a ‘business as usual’ equation for quite a long time. Tenants will recalibrate their space requirements, and the effective average monthly per-desk rentals at Grade A office spaces in some of the major business cities will be a central consideration.

Monthly per-desk rentals

The average monthly rentals in Grade A office spaces in CBD (central business district) areas like South Mumbai and Bandra Kurla Complex are anywhere between Rs 18,000 to 27,000 per desk per month for coworking spaces and between Rs 24,500 to Rs 30,000 per desk per month for conventional commercial Grade A offices. All non-Grade A office spaces in CBD areas are lower by at least 15 percent to 20 percent.

In New Delhi, the average monthly rentals in Grade A office spaces in CBD areas like Connaught Place range between Rs 13,000 to Rs 19,000 per desk per month for co-working spaces and between Rs 20,000 to Rs 25,000 per desk per month for conventional commercial Grade A offices. Non-Grade A office spaces in the CBD areas are at least 15 per cent to 20 per cent cheaper.

Mortgage financer LIC Housing Finance Ltd (LICHFL) on Thursday announced to reduce its lending rates to 7.5 per cent for new homebuyers having a CIBIL score of 800 and above.

"The RBI has taken a number of steps to provide enough liquidity into the system. We are also getting cheaper cost of funds and we want to pass on that benefit to customers. This will also help in bringing back consumers' confidence back to the sector," LICHFL Managing Director and CEO Siddhartha Mohanty said.

The home financier will give additional 10 basis points benefit to new homebuyers and will offer home loan at 7.4 per cent to customers who are linking their existing or new single term insurance policy to the loan availed from it.

"In case of the unfortunate death of a borrower, the term policy will take care of the loan," Mohanty said.

The reduction in home loans will also be available for new home buyers having a CIBIL score lower than 800 but at a higher interest rate.

"The rate of interest is linked to the creditworthiness as reflected in CIBIL scores of the borrowers," the company said.