Soon, flat buyers can remove builders from delayed projects
In a move aimed at empowering home buyers, the Maharashtra Real Estate Regulatory Authority (MahaRERA) is in the final stages of laying down Standard Operating Procedures (SOPs) under which flat buyers in a private residential project will have the power to remove the builder from the project for failing to complete it on time. At present, there are at least 20 cases before the MahaRERA in which home buyers have complained against the builder for non-completion of the project by the promised date. Faced with a slew of such complaints, the authority decided to frame guidelines under Section 7 of the RERA Act under which society, with the consent of 51 percent or more of its members, can divest the builder from the project.
A circular affecting the new guidelines will be issued soon, MahaRERA secretary Vasant Prabhu said. The guidelines, however, will apply to projects that are free of litigation before any other fora. “When a homebuyer purchases a flat in any private apartment, then after receiving 10 percent of the flat value from the buyer, the builder has to register the flat sale agreement. As per RERA regulations, if more than half the flats are sold in any project, a society or an association of the flat owners has to be formed. Once the association or society is formed and the majority of the members conclude that the builder won’t be able to complete the project on time, they can file a complaint in the name of the society and the builder can be removed from the project,” said Prabhu.
Now, Japanese firms set sights on Indian realty
Japanese real estate players have set their sights on the Indian commercial property space after the American and Canadian investors. Sources in the know said big conglomerates of Japan, including Mitsubishi Corporation, Sumitomo Corporation, and Mitsui Group, are looking to both build and buy commercial properties in key Indian cities. “Mitsubishi and Sumitomo are looking to buy and hold the properties for long and earn rental yields,” a source, who is working with both the conglomerates in the country, said.
According to the source, Mitsubishi is in talks with Bengaluru-based Embassy group to build commercial properties in southern India and is in negotiations with other developers for similar tie-ups. “Commercial real estate is witnessing a significant interest with all foreign and domestic equity players. The valuations are pretty stable and attractive, and the success of the upcoming REIT offering of Blackstone-Embassy would provide further depth in the market in terms of entry and exit,” said Shobhit Agarwal, managing director of Anarock Capital.
Paris, Singapore and Hong Kong tie for world’s most expensive city
Move over Singapore — the world’s most expensive city has two new rivals. After topping the Economist Intelligence Unit’s ‘Worldwide Cost of Living Survey’ for five years, Asia’s Lion City has been joined by Paris and Hong Kong in a tie at the top of the table. It is the first time in the survey’s 30-year history that three cities have shared the top spot.
The annual index compares prices of everyday items in 133 cities around the world, including recreation, education and utility bills. According to the survey, a woman’s haircut in Singapore, Paris and Hong Kong costs $96.01, $119.04 and $112.10 respectively. While parts of Asia remain the most expensive places, the continent also makes several appearances at the bottom of the list. “Bengaluru, Chennai, New Delhi and Karachi feature among the 10 cheapest locations,” the EIU said.
Incomplete Projects: Realtors get 2 GST options
All residential buildings not completed before March 31, 2019, will have the option to choose between the old goods and service tax (GST) and the new regime announced last month. The new regime, that provides a lower GST rate but without the input tax credit, will be mandatory for all new projects launched after April 1. The transition plan was approved by the GST Council on Tuesday giving flexibility to the real estate sector. The GST rate for the sector under the earlier regime stood at 12% with the input tax credit and 5% without input tax credit for economically weaker sections. In the previous meeting on February 24, the Council had slashed rates for under-construction flats to 5% and for affordable homes to 1 % from 8%, effective April 1. However, there will be no input credit for these rates that will be effective from April 1.
“From April 1, builders have to choose either of the options for which they will get time,” revenue secretary A B Pandey said after the 34th meeting of the GST Council on Tuesday. Finance minister Arun Jaitley chaired the meeting with state finance ministers via video conferencing. A statement issued later said promoters will have one -time option to continue to pay tax based on old rates for ongoing projects where construction and actual booking have both started before April 1, 2019, but have not been completed by March 31, 2019. “The option shall be exercised once within a prescribed time frame and where the option is not exercised within the prescribed time limit, new rates shall apply,” the statement said. Industry welcomed the clarity as it addresses the concern over the treatment of the input stock accumulated as part of their long-term purchases.
Realty market to add 200mn sq ft space this year
Housing sales are expected to rise in 2019, as the realty market is on a recovery path after absorbing the impact of policy reforms like RERA, GST and note ban, according to a CBRE report. 3.7 trillion sq ft: Expected real estate stock in India at the end of this year. 200 million sq ft: Capacity of new real estate space to be added in 2019 across categories including office, retail, residential and logistics. 15% y-o-y growth: Growth of about 15% year-on-year in new supply and 13% y-o-y in sales due to various policy reforms, the CBRE report said.
The residential market is better placed this year as speculation-led investment activity has reduced significantly and financial checks are in place to prevent over-gearing, the report added. The outlook for the Housing Sector: Supply-demand scenario is expected to improve and unsold inventory levels are likely to decline further. Affordable Housing will drive supply and demand, backed by several government reforms.
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