NayaGhar

08/10/2019

28/09/2019

MUMBAI: The preference for ready-to-move-in apartments in the backdrop of fears over deliveries is forcing realty developers to tweak their offerings to attract home buyers to such projects.

Ready apartments are emerging as the only other segment apart from affordable housing projects that is clicking with home buyers. The combination of affordable and ready-to-move-in apartments is offering further traction in sales.

In a significant trend seen in Indian real estate over the past few years, ready-to-move-in properties are seen as a good value proposition for discerning home buyers as they get to buy what they see. Also, it helps mitigate risks associated with new projects including incessant delays, unscrupulous activities of few developers, etc. The biggest benefit for home buyers is that ready units do not attract the GST.

From the demand perspective, as per ANAROCK Property Consultants’ consumer sentiment survey for the first half of 2019, a good 36% prospective buyers preferred ready-to-move-in properties, followed by 24% who wanted a property that will be ready within the next 6 months.

Interestingly, if city-wise data is considered, at least 56% prospective buyers in NCR preferred ready properties over under construction ones because it is here where consumer confidence is the least,” said Anuj Puri, chairman, ANAROCK Property Consultants.

Developers are aware of the changing market preference and are looking to make most of this new trend. Builders such as Puravankara, Sobha Prestige and Shriram Properties are offering minimum guarantee of 9%, virtual cash, free kitchen, deferred payment schemes, assured rent and no floor rise among others on their ready-to-move inventory too, while several others are providing a superior customer experience for improved word of mouth.

The interest of buyers for ready apartments can be attributed to the fact that they do not have to pay any GST, investing in them is the most secure option and they can actually experience the project as all amenities are in place.

We are offering easy payment plans spread over two years for premium and luxury properties. We are also focusing on generating references from our existing customers, who have experienced transformation in their quality of life after moving to these properties," said Sanjay Daga, COO, Runwal Developers.

Daga further said the company is getting increased response to ready-to-move-in apartments across various segments — from affordable housing to luxury category.

The Indian festive season, ushered in by the Ganesh Chaturthi, has begun and investment decisions are being made. For home buyers, this period is both auspicious and opportune to buy homes because real estate developers inevitably offer attractive incentives.

“There’s a huge demand for ready apartments. We have seen 40% of our residential sales coming from such properties,” said Ashish R Puravankara, MD, Puravankara.

Traditionally, the festive quarter fares better than the previous quarters of the year when it comes to housing sales — the combination of religious sentiment and festive deals and freebies is a potent mix during this part of the year.

For instance, the fourth quarter of 2015 saw 70,000 homes sold in seven major cities during the festive season, but the sector is not out of the woods yet. “The Indian real estate sector is still crippled by the economic slowdown, and the unsold inventory of 6.65 lakh units across seven cities remains a tough reality, ” said ANAROCK Research.

21/09/2019

Union Finance Minister Nirmala Sitharaman announced a slew of tax exemptions at the GST Council Meet on Friday.

Nirmala Sitharaman proposed to slash corporate tax for domestic companies and new local manufacturing companies through an ordinance.

In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.

Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.

"We today propose to slash the corporate tax rates for domestic companies and for new domestic manufacturing companies," the finance minister said at the meeting.

Nirmala Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually.

This, she said is being done to promote investment and growth.

"Tax concessions will bring investments in Make in India, boost employment and economic activity, leading to more revenue," the finance minister said in Goa.

In effect, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.

The changes in the Income Tax Act and Finance Act will be made effective through an ordinance.

The finance minister also said companies opting for 22 per cent income tax slab would not have to pay minimum alternative tax (MAT).

Nirmala Sitharaman further said, new domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives.

Meaning, the effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess.

Nirmala Sitharaman further said companies can opt for lower tax rate after the expiry of tax holidays and concessions that they are availing now.

Other measures

The government has also decided to not levy enhanced surcharge introduced in Budget on capital

20/09/2019

Indian realty attractive for global investors’

Private equity firms have invested over $4.2 billion into India’s realty market in the first half of 2019.

The slew of reforms introduced in the Indian real estate sector over the past two-three years are helping the market move towards improved transparency and are therefore attracting more foreign institutional investors, said John Forrester, global president, Cushman and Wakefield.

“With RERA (Real Estate (Regulation and Development) Act, 2016), GST (Goods and Services Tax), insolvency & bankruptcy law, all of these reforms, the Indian economy is getting more sophisticated, and it's an easier place to do business. With the added sophistication and the added ease of doing business, all of a sudden risk return moves into India’s favour,” he told ET in an exclusive interaction while referring to India’s attractiveness in realty sector from global investors’ perspective.

Driven by the investment appetite for commercial properties, private equity inflow into Indian real estate sector has been strengthening further mainly on account of foreign funds’ direct exposure and platform alliances. Private equity firms have invested over $4.2 billion into India’s realty market in the first half of 2019, up 10% from a year ago.

“We see an abundance of opportunity in the domestic market here in India. There are a lot of demographic and economic tailwinds for India that don't necessarily exist in other markets,” said Matthew Bouw, CEO – Asia-Pacific, Cushman and Wakefield, while highlighting India’s demographic factors.

While both Forrester and Bouw agreed that the residential segment of Indian real estate is going through a sluggish phase, affordable housing continues to perform better in the backdrop of the government’s objective of Housing for All by 2022.

Given the issues of delayed deliveries and instances of rising consumer activism over the past few years, real estate developers’ business models are going through a change.

The market is coming to terms with these changes.” Forrester said. “Your business models have changed because the capital infusions have become much more capital-heavy, while on the other hand, the regulation has completely changed the landscape.” Both of them reckon that India is standing among the top 10 key markets in the global scheme of things and the scenario has changed completely in favour of the country over the past few years.

“So, we focus on the top 50 or so markets in the world, I would say that we're probably looking at three or four of those now in India, whereas four or five years ago, maybe only one or two,” Bouw said.