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RBI’s constant rates further instigates Demonetisation effect.

The entire nation is perplexed with the mystery of old and new currency and RBI still, decides to keep the rates undeterred in its fifth bi-monthly policy review for the year. This comes as a big blow for the real estate market which is in a desperate need of a rate cut as the market has taken a steep fall. This was the last policy review for the current calendar year, the first one took place before demonetisation era and the second review was presented by Dr. Urjit Patel. Real estate had high hopes with this policy review session as a repo rate deduction was witnessed last time, but the hopes got shattered with the RBI’s verdict. The secondary real estate market has taken a hard hit and the entire responsibility to keep the realty sector alive is on the primary market. A rate cut at this scenario would have been a great asset for the market to revive. The last ray of hope is the parcel of benefits of previous rate cuts to the consumers which is yet to be delivered by the banks.

With the recent announcement in the monetary policy review, the Repo Rate remains unchanged at 6.25 percent, Reverse Repo Rate under the LAF at 5.75 percent, Statutory Liquidity Ratio (SLR) at 21.5 percent, and Cash Reserve Ratio (CRR) at 4 percent and Marginal Standing Facility (MSF) at 6.75 percent respectively. With no change in the monetary policy review, the realty experts are predicting the graph to stay uniform while giving the real power in the hands of end users. Investors markets stand midway with no return guarantee. With the present situation of prices being at their very least, country going cashless on high value currency, there are not many signs of appreciation in the upcoming 6-9 months.

Here is what Avneesh Sood, Director, Eros Group would like to say about this subject:

Since demonetisation, it was quite evident that real buyers will become prominent in the market and end users will be in majority. Banks had already reduced their interest rates, post the previous policy review; and a rate cut in today’s policy review would have further motivated these potential primary buyers to make full use of the reduced EMIs. With ready to move in properties high in demand, property prices already at its lowest, a rate cut at this point of time could have pushed the sales further; either for long term retention or end use.

 

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Smart Cities: Battle of Development & Sustainability

Overview :

The past few years have witnessed rounds of discussions & plans for developing smart cities across the country. Most recently there has been an outcry of researchers about what impact these smart cities would be followed by.

The confusing part is, what is a smart city? & how smart are they?

Smart cities, a brief explanation:

In 2015 central government launched an urban renewal plan for select cities across India. The five-year program aimed to select 100 cities & focus on their core development points such as adequate water & electricity supply, urban mobility, digitalization, e-governance etc. The idea was to inspire a model of development for other cities to look up to.

In a series of five rounds of selection, a total of 99 cities were chosen, including New Delhi & Faridabad. Each of these cities would be provided with a funding of Rs1000 Crores by state & central government in 2017-2022 to focus on their development.

Why are the environmentalists angry?

A study conducted by a group of researchers from the UK stated that when these smart cities reach their final, developed state, they might face issues regarding sustainability. Although the government has plans looking over sanitation & urban waste management of these cities, researchers argued that it might not be enough.

With the rise in infrastructure, there would be a proportional rise in the population density of those regions. Higher the population, higher goes the waste.

At Eros, we understand the importance of environmental preservation. It’s why our projects are surrounded by lush green gardens & healthy vegetation to ensure that residents live in a clean environment.

What does a Smart City bring to the table for real estate?

Investment. A brief, but an accurate way to state it. Smart City project would provide each city with a boost in their beautification capabilities. Meaning, there would be a lack of empty lands & abundance of parks. Another focus would be on Transit Oriented Development i.e. cities would develop businesses, leisure spots & residential spaces within walking distance of public transport points.

The plan would significantly increase the residential capacity of the city & develop infrastructure to attract outside investment. Diverting from residential businesses, smart cities would have a wide scope for commercial development like malls, restaurants, integrated complexes etc. 

To sum it up:

Smart Cities would bring countless opportunities. They would begin by developing residential businesses to house the, soon to increase, population & end at developing recreational & commercial facilities for the masses. There is a very broad market with lots of untapped economic landscapes.

What’s important is that focus must not be limited to simply developing infrastructure, but to also look at their sustainability. The environment is for us to live in & we must look after it.

Jewar Airport: Winds of Development

Overview:

 It took 16 years of conflicts & disputes for the Jewar Airport to receive approval from the state government. Backed with a budget of Rs 20,000 crores, it would be built on 4000 acres, making it India’s biggest airport.

The foundation will be laid in October this year. Consultancy firm PwC has been asked to prepare a bidding document by July to select potential builders. Construction, starting in 2019, would be divided into four phases, aiming to complete the first phase by 2023.

An  MoU has been signed between the UP government, YEIDA, Noida & Greater Noida Industrial Authorities to fast-track the work for the airport, including land acquisition.

Why are the owners unhappy?

Yamuna Expressway Industrial Development Authority (YEIDA) has been assigned as the principal agency to oversee the development of the project. A funding of Rs 4000 crores has been allotted by the state government to YEIDA for the first phase. Land acquisition process has begun, but the owners are not very happy about it.

The landowners have complained that before signing the MoU, the status of their lands was changed from rural to urban. The change in status would make compensation for the lands two times the circle rate, rather than being four times, had the lands remained rural.

The owners have also pointed out that by selling their lands through property dealers they could easily bag Rs 25 Lakhs per bigha (843 sq.m) then why shall they sell the same at Rs 15 Lakhs to the Government.

 What’s for the real estate in it?

 The government has planned investments to develop transportations links to the airport. A Rapid Rail Transit System from Jewar to Sarai Kale Khan ISBT has been approved. There are also talks to extend Greater Noida metro till the Airport. With the rise in rail connectivity, an army of autos & buses would soon follow.

An Aerocity would be built around the airport which would be another milestone for Jewar. The Aerocity would attract flocks of hotels, malls & restaurants to it. An MRO (Maintenance, Repair & Overhaul) facility would also be set-up at the airport. This would become the hub for skilled labors, engineers & many other professionals. It wouldn’t be delusional to say that a few years from now Jewar would hardly be recognizable.

Eros Sampoornam, located 35 mins away from the airport, provides great investment & residential options. The society has budget friendly 2 & 3 BHK luxury flats with its amazing clubhouse, sports facilities, shopping centers etc. The possessions have already begun at a great pace.

Conclusion:

 Since 2001, when the plan was first proposed, land values in & around Jewar saw more than a few rises & falls. Political conflicts led to many cancellations, but now, at last, the project has attained stability.

To those who have invested around the airport, I would say that don’t even consider selling. Times are now for development, you can sell your land anytime in the future & still make a good profit. Right now you should focus on establishing a business around the airport, the residential real estate is just one share of the pie. The market is wide open for hotels, cafes, complexes & what not.

It’s an empty land, which in a few years would hold the country’s biggest airport. Decide on a venture & plan on how to start it.

To those who haven’t made their investments yet; do it.

Real Estate Expectation from Budget 2018

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Budget 2018 is about to come and everyone is looking forward towards some positive changes. Real estate sector is highly hopeful for some concrete and fruitful updates. The two main pre-budget expectations in the real estate market are one the Affordable Housing category is presently limited to 6- sqm area only, the area is expected to increase for the MIG category to come under the Affordable Housing segment. The second main pre-budget expectation is that the current GST of 12% should be lowered to at least 6 to 8%.

Talking about the first expectation from Budget 2018, the recent policy reform which is in the reckoning is that under the PMAY (Prime Minister Awas Yojana), the MIG – 1 carpet area has been increased from 90 sqm to 120 sqm. Also, MIG – 2 carpet area has been increased from 110 sqm to 150 sqm. If the housing under the above categories becomes a part of Affordable Housing, then it is liable to avail the benefits and subsidies of the Affordable Housing segment, which will boost the real estate market in times to come.

The following amendments will draft the way ahead for availing the loans and to avail the advantages of the Affordable Housing category as Affordable Housing has been designated with the ‘infrastructure Status’.

The second major expectation from Budget 2018 is that the current GST which is of 12% should be lowered to at least 6 to 8%. If both these above-mentioned measures are executed and implemented in Budget 2018 then for sure real estate market will witness a major boost. This will be a great step towards meeting Government’s mission of ‘Housing for All by 2022’ as post such measures masses will be in a much better position to afford homes and invest in housing.

Real estate sector is looking forward to Budget 2018 to create a better market, happy developers and satisfies customers.

Possessions: The new driving force of Indian realty

Eros blogThe year 2017 turned out to be one where the Indian realty witnessed a lot of facelift and a major part of it being in the form of possessions. This year has witnessed the trend of real estate shifting from project launches to possessions and to such an extent that the total project launches in the year fell by almost 40% which is a big number. The current trend of the market is such where the success of any real estate developer is measured in the terms of the possessions they have offered to their buyers till date. The year also saw the concentrated efforts of the various state governments and concerned development authorities towards enabling developers to deliver projects to their rightful owners.

Eros Group is synonymous with real estate and hospitality across the span of NCR. The Group had offered possession of 1768 units for the phase – 1 & 2 of its project Eros Sampoornam in Greater Noida West after the OC was received for the 21 towers housing the aforementioned units. Work on another 432 units in the project is taking place at a rapid pace, and the possession for the same will be announced soon too.

Possession has been the driving force for 2017 and it will be the same for 2018 as well. With better possession rate 2018 will bring joy and cheers to all the home buyers.

Fifth Monetary Policy Review of the Financial Year & the Last for this Calendar Year.

Police officer stands guard in front of the RBI head office in Mumbai

In the bi-monthly policy review, The Reserve Bank of India has decided to maintain the status quo by making no changes in the key rates. Statuary Liquidity Ratio (SLR) and Cash Reserve Ratio are left unchanged by Dr. Urjit Patel, RBI Governor, in the fifth monetary policy review of the financial year and the last for the calendar year 2017. By this it is clear that RePo rate is same as before i.e. 6%, Reverse RePo rate is 5.75%, Marginal Standing Facility (MSF) IS 6.25%, CRR is 4% and SLR is 20%.

Looking at the market dynamics, we were projecting the RBI to maintain the status quo. Any reduction in lending rate allows the sentiments in real estate to improve as the net cost on the buyer for the housing unit gets decreased but with the market inflation touching its projected limit for the financial year already, it is appreciative on part of the apex bank to keep the rates on hold as it will give the market more time to stabilise and allow inflation rates to come down in eventually.

NHAI’s twin projects to boost Gurugram’s realty market

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In a move that is expected to decongest the National Capital and give a much-needed impetus to the housing demand of Gurugram’s realty market, the National Highways Authority of India (NHAI) has decided to work on two major infrastructure projects involving the National Highway 8.

Under its first assignment, a 79-km-long Urban Extension Road (UER) – 2 is planned to connect NH 8 near Mahipalpur in South Delhi with NH 1 near Narela in Northwest Delhi. Also, construction of Delhi-Panipat and Delhi-Alwar Regional Rapid Transit Systems (RRTS) along NH 1 and NH 8 has received the approval of NHAI.

For the second infrastructure project on NH 8, NHAI has planned to build a trumpet junction between Dwarka Expressway and NH 8, which is projected to pave way for the heavy traffic flow between Gurugram and Delhi. This proposed junction will be linked with a cloverleaf coming up from the NH 8, connecting it with the Southern Peripheral Road (SPR). The two interchanges are estimated to be built around 2 km before the Kherki Daula or the Manesar toll on NH 8. With this roadway, commuters will gain access between SPR and Dwarka Expressway without intersecting the NH 8. With the implementation of these two projects, this belt will become one of the busiest belts in the near future.

These infrastructural projects will greatly help decongest the National Capital and add value to the properties falling across NH 8 and Dwarka Expressway. Once these projects are operational, NH 8 will observe a higher footfall which will pave way for better housing demand in the regions. Avenues for investment will open up as the development of such scale will promote capital appreciation in the long run.

These two projects by NHAI, however, will act as a catalyst for the upcoming housing demand along NH 8 and Dwarka Expressway!

RBI Rate Cut To Boost Affordable Housing Demand

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There is a reduction in the lending rate by the Reserve Bank of India (RBI) just ahead of the festive season which will help in boosting housing demand, especially in the affordable housing segment. A good monsoon in progress, low inflation numbers, favourable global environment and an overall uptick in industry sentiments seem to be the catalyst for this rate cut, according to them. RBI reduced the short-term lending rate, or repo rate, by 25 basis points to 6% at its third bi-monthly policy review.

Implementation of GST has completed its very first month and a great response can be already observed as the buyers’ queries are increasing day by day. A rate cut at this moment will boost these sentiments further where footfalls and conversions are bound to increase. Final festive season of this calendar year is nearing and this rate cut can allow the banks to cut down on their lending rates further. The economy is shaping up well with a growth trajectory becoming visible for the real estate sector as well.

It is a welcome move, especially to combat the odds industry was seeing in recent times. Cheaper home loan definitely will boost positive sentiments amongst the home buyers and in turn, will help the developers to gain the momentum. With RBI’s this move many home buyers will get a boost to own their dream home at the most affordable prices.