Pocket friendly living de-coded
Government support and incentives for Affordable Housing has brought low-cost housing into focus. We look at the advantages and privileges granted to the sector as also pin-point a few locations worth investing. Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income. In short, affordable housing should address the housing needs of the lower or middle income households. Thankfully, there have been several initiatives by the ruling government to boost the affordable housing sector. A significant amount of changes has taken place to meet the increased demand for affordable housing. Hubs for affordable Housing: The Government’s plan of ‘Housing for all by 2022’ called for affordable housing projects in different parts of the country. With improved connectivity, the outskirts of Mumbai are turning into hubs of affordable housing. These include areas of Navi Mumbai, Bhiwandi, Dahisar, Vasai-Virar, Kalyan, Karjat, Dombivali and Badlapur. Let’s look at a few of them:
Vasai-Virar: In the western suburbs of Mumbai, Vasai-Virar is the new emerging belt witnessing a huge demand for both residential and commercial sectors. The major USP of the locality is the connectivity to Mumbai Central Business District and reasonable capital values. Kalyan-Dombivli: Kalyan-Dombivli’s real estate has recently witnessed a boom, due to the increasing prices in Mumbai suburbs and growing demand for affordable housing in Mumbai. It is witnessing the development of new residential projects at a fast pace. Developers that operate in this area include Lodha group, Nirmal Lifestyle, Raunak group, Laxmi Housing Builders & Developers. Naigaon: Massive land bank has attracted many national level developers to the region with mega construction plans in the coming future. The region’s population has been increasing rapidly in this region owing to continuously improving connectivity, affordability of real estate prices and improved infrastructure.
Source: The Economic Times, Wednesday 16 October 2019
Housing regulator to co-opt developer bodies
The Maharashtra Real Estate Regulatory Authority has decided to co-opt developer bodies such as the National Real Estate Development Council, Confederation of Real Estate Developers Association of India (CREDAI) and the Maharashtra Chamber of Housing Industry (MCHI) and register them as ‘self-regulatory organisations’ to promote greater compliance culture and curb fraudulent behaviour. The housing regulator has issued a new circular to make a group, association or federation of promoters a self-regulatory organisation registered with the authority. The minimum eligibility for a body to be registered as a SRO is that it should have at least 500 MahaRERA registered projects of their members.
“The SRO shall encourage its members to comply with the provisions of the Act, applicable rules, regulations, orders or circulars issued by MahaRERA from time to time,” states the circular. It says that the SRO shall be responsible for creating awareness about RERA compliances, enforcement of code of conduct and greater professionalism. MahaRERA chairperson Gautam Chatterjee said: “It is a unique concept. We have SROs in the form of CREDAI, NAREDCO or National Association of Realtors for real estate agents, for example. MahaRERA has worked with these bodies from the first day to ensure that promoters comply with the provisions of the new act. But, after detailed discussions, we decided that we should register them as SROs to further enhance transparency and professionalism.” Chatterjee said MahaRERA presently has the highest 22,000 ongoing real estate projects registered with it, and SROs are expected to hand-hold their members to comply with the regulations.
Commercial Property Gaining momentum
Contrary to the popular belief, real estate is not always a risky gamble; provided the investor is well-informed about market conditions and ones’ requirements and finances. Considering all of these, a commercial property is the most stable asset and attraction in real estate market today. Investing in commercial properties is proving to be more profitable than residential properties in the recent time. Experts attribute multiple factors for it. Here are a few: One of the major reasons is that as compared to residential properties, the ready-to-use commercial properties are wisely priced. Secondly, commercial investment fetches higher rental value as compared to residential investment. Thirdly, the commercial property developers have been offering lucrative plans such as assured return on investment till possession, lease guarantee for the property post possession, etc.
Assured Return, assured success: The return on investment is calculated in two ways in a commercial property. One being the rent which is approximately 8-9 percent per annum of the cost of the property plus capital appreciation which is approximately 10 percent annually thus giving a stable return of around 18-19 percent per annum. Industry experts feel that the real estate market is going through a consolidation phase. This in turn, has made investment in commercial real estate immensely beneficial for both who are looking to have regular monthly income from leasing their commercial properties and those who want to use the space for their own business and saving on monthly rent thereby. Real estate is an asset class that investors can literally touch and feel. Yes, some building occupants may come and go and there may be ups and downs in building valuations over the course of its life. However, the property itself is not going to disappear.
Source: The Economic Times, Friday 25 October 2019
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