How Maharashtra state polls will affect 70,000 housing societies
The impending assembly elections have thrown a spanner in the functioning of the state’s cooperative housing societies (CHS), with the government barring them from holding elections till December 31. The delay — necessitated by the upcoming model code of conduct — comes weeks after the government gave citizens some good news, allowing CHS with fewer than 250 members to hold elections on their own. Maharashtra has over 80,000 registered CHS, of which some 70,000 societies have fewer than 250 members. Minister for Cooperation Subhash Sureshchandra Deshmukh said the draft rules would be sent to the Law and Judiciary Department for approval before inviting public opinion, after which the final rules will be framed. “We expect the process to take three months,” he said. “So, we came out with the notification. First, we need to amend the existing Act. Then, we have to introduce the new Housing chapter Section 154 (b), which will have 31 clauses, one of which will enable societies to have their own elections.”
Source: Mid-Day, Tuesday 17 September 2019
A third business district to come up at Wadala
After Backbay Reclamation and Bandra-Kurla Complex (BKC), Mumbai is set to get its third commercial business district. Chief Minister Devendra Fadnavis has approved the plan to transform Wadala into the “commercial centre on the lines of the BKC”. On September 16, the CM-led urban development department notified modification in the development control rules for the implementation of the move. The Mumbai Metropolitan Region Development Authority (MMRDA), which was notified as the region’s special planning authority in 2005, has proposed to set up a business district over 64 hectares. It was first set in motion in January last year, when the MMRDA’s directorial board, headed by the CM, sanctioned the proposal, which was later submitted to the government for approval.
Property bills with ‘waiver’ yet to be dispatched by BMC
More than five months after the Brihanamumbai Municipal Corporation (BMC) announced dispatching the new property tax bills for flats measuring 500 sq ft or below, the civic body hasn’t done so yet. It had also published a press release announcing the bill dispatch on August 6. The Shiv Sena and BJP had mentioned waiving off property tax for small houses (up to 500 sq ft) in their election agenda. The decision was approved in the general body meeting and the Maharashtra cabinet on March 8. However, the government resolution only amended section 140 (C) of the Mumbai Municipal Corporation Act which caters to the general tax component – merely 10 to 30 per cent of the total tax.
The other components including water tax, storm water drainage tax, BMC education cess, state education cess, employment guarantee cess, tree cess, road tax etc make for 70 to 90 per cent of the property bill. The BMC was in constant consultation with the state government over this for five months. It finally published a press note on August 6 saying the bills would be delivered by only deducting the general component. But 40 days after the statement, bills haven’t been sent out yet. According to data with BMC’s assessment and collection department, Mumbai has 15 lakh houses that are measure 500 sq ft or less. The civic body is likely to lose around Rs.350 crore of revenue collection due to exemption of property tax for such flats. After the closure of Octroi, property tax has become the BMC’s primary source of income. BMC collects around Rs 5,000 crore worth property tax in a year. The civic body has collected Rs 5,082 crore in 2018-19 and estimated a collection of Rs 5,100 crore for 2019-20.
Source: Mid-Day, Thursday 19 September 2019
Ahead of elections, Maharashtra rolls out more sops for Mumbai’s real estate
After providing a Rs 2,200-crore fiscal package for Mumbai’s real estate industry last month, the Maharashtra government has unveiled another stimulus package for the sector. It has lowered the interest payable on premium installments collected from developers in lieu of additional buildable space and concessions availed for construction projects. According to a circular issued by the Mumbai municipality on September 17, the interest on such premiums has been lowered from 12 per cent to 8.5 per cent. With the construction industry giants facing a liquidity squeeze, the Mumbai municipality has also granted developers more time to make payments under the installment facility.
While for high-rise construction (above 70 m height), the overall time period for payment in installments has been increased from four installments spread over 36 months to six installments over 60 months, for a low-rise it has been increased from three installments (over 24 months) to five installments (over 48 months). When the installment facility was first introduced, the government levied 18 per cent interest on delays in payment of installments, but this has now been withdrawn. The municipality has said that delays beyond three months in such payments would attract a stop work notice.
Get covered with a Home Loan Insurance
As the breadwinner, an insurance cover against the home loan is an assurance that the asset you have purchased will stay with the family under all circumstances. And, you can accomplish it at only a small additional cost.
Home Loan Insurance Plan: Most banks today offer insurance plans with home loans but it is important to choose the right one for you. (Many people confuse it with home insurance plan so it is important to know the difference). While home loan insurance plans tend to get little expensive than regular insurance plans, they also offer certain tax benefits. So, it is important to study various parameters of home loans and insurance plans before finalizing the right one. Why take a chance with hard-earned money?
The Insurance cover: When taking a home loan, lenders usually force borrowers to take an insurance cover from them. The home loan cover from the lender may not be the best option as they may be looking to recover the outstanding in case the borrower passes away and also earn a handsome commission from you. It is essential to company different policies and opt for the one that suits you best, there are several policies that can give more benefits at lower costs. And these work out to be more cost effective for young borrowers.
Source: Mid-Day, Friday 20 September 2019
Field for Rental Yield
Did you know that 53 percent of home-buyers looking to buy property for investment, focussed on rental income? Here’s a gentle reminder of how the real estate sector could leverage rental (co-living included) perks to address modern-day housing crisis. The economic downturn is showing its impact on many industries, and real estate too has been slow to recover. While it was bogged down with weak housing demand and a stressed supply after the implementation of several measures such as demonetization, GST and RERA to name a few, the rental sector has shown much resilience. And the recently-proposed regulations for the real estate sector have made its way into the Model Tenancy Act 2019, thus addressing important issues in this largely disorganized industry such as shortage of homes and promoting the growth of rental housing.
Analysts say that these regulations will help deepen the rental market, but will only change structurally in the longer term. “Entry of co-living players with various models and target segments will help create an additional method of renting. Millennial, who are open to changing locations and used to having managed living spaces without the hassles of maintaining it, will prefer such options,” says Mudassir Zaidi, executive director – North, Knight Frank, India. He adds that investors/landlords who are used to 1.5-2.5 per cent in rental yields and relied mainly on capital appreciation for their returns can expect to get better rental yields through co-living. “Developers have also begun to warm up to such models as the pace of sales is slow, and they need to maintain and create revenue streams for unsold units,” he says.
Source: Times Property, Saturday 21 September 2019
Realtors hope for demand spike
Demand for residential properties will get a boost after the cut in corporation taxes, said top property developers and consultants. “Capital investment, which had stopped, will restart,” said Niranjan Hiranandani, chairman at Hirananadani Communities. “When developers invest money, they will invest on new projects, which in turn generate employment. People will buy properties. There will be a multiplier effect.” There was, however, “no room” to cut prices to boost demand, he added. Hiranandani said according to income tax rules, if a developer cuts prices by 5% both the buyer and the seller have to pay a tax.
With high prices and slow demand, residential real estate inventory has piled up massively. According to estimates, there is a ready residential inventory worth as much as Rs 90,000 crore. Rajiv Talwar, chief executive at DLF, the country’s largest listed property developer, said when there is more money in the hands of corporate entities and people, it will makes a difference. “The economic progress will benefit real estate in the form of increased demand. We need to boost the supply of properties to meet the demand,” Talwar said.
Once touted to become India’s largest planned city, NAINA shrinks in size
When it was originally conceptualised in 2014, the Navi Mumbai Influence Notified Area (NAINA) was promoted as India’s largest planned city, even bigger than Mumbai and its suburbs together. But now that the new city’s development plan has finally been sanctioned, it appears to have been considerably shrunk — it is only slightly more than half its planned size.
Planned to come up around a radial distance of about 25 km from the proposed international airport at Navi Mumbai, it was originally expected to be spread over 600 sq km or 60,000 hectare. But according to the development plan sanctioned by Maharashtra Chief Minister Devendra Fadnavis earlier this week, it will now come up on just over a 334-sq km plot. This is a good 14,224 hectare less than the 476.24 sq km area occupied by Mumbai. However, it will still be bigger than Navi Mumbai (320 sq km). While the original idea was to undertake urban development of 308 villages in the six talukas of Thane, Uran, Karjat, Pen, Khalapur and Panvel in Thane and Raigad districts, this has now come down to 175 villages.
MNC tech centres take 25% of commercial space
Global capability centres (GCCs) — the tech arms of MNCs in India — have been one of the biggest lessees of corporate real estate space over five years. And they are expected to continue to remain so in the near future as MNCs across segments set up captive centres in India to do high-end technical work through the rich talent available at a relatively lower cost. GCCs absorbed 53 million sqft, or 25% of the 213 million sqft of Grade A office space leased between 2014 and 2018 across Bengaluru, Delhi-NCR, Hyderabad, Pune, Mumbai and Chennai, data sourced from property consultancy Colliers International show.
Bengaluru absorbed 20 million, or 38% of overall GCC space absorption, and Delhi-NCR 11million. Companies from engineering, energy and manufacturing sectors favoured Bengaluru. Independent property consultancy firms say the demand is so high that many multi-tenanted office spaces are precommitted months before firms move into these parks owned by the likes of Embassy, DLF, K Raheja and RMZ. “These companies require very high quality office space, which closely resembles the standards in their home country,” said Lalit Ahuja, CEO of ANSR Consulting, which helps MNCs set up engineering and R&D centres. Ahuja went on to say that per capita consumption of space is also much higher in these GCCs.
How commercially viable is your office?
Though traditionally the domain of institutional investors or heavyweight business houses, many retail investors are now getting into the office real estate game. Here’s understanding the dynamics of commercial real estate. For those keen to invest in real estate, commercial properties are a viable alternative to residential options if he has the financial abilities, sufficient market knowledge and longer holding power. Today, even professionals like doctors, auditors, stock brokers and lawyers are buying commercial properties for investment and self-use. A commercial property could be a small shop in a neighborhood, housing complex or at a mall. Convenient Spaces: Many developers in Mumbai are today offering smaller units of space (as small as 500-1000 square feet). There are several advantages to having a smaller unit like: 1) It is easier to find tenants for them; 2) The premises can also be used for business by their owners if they plan to set up a business.
Things to look for: Despite the availability of several options, investing in commercial real estate enquiries requires a lot of research and planning: 1) Location: Investors need to inquire about the demand of the location. If their product / service is not attracting the right customers, then it will be a futile investment. 2) Check developer credentials: An investor needs to do a thorough check of the developers credentials, potential for infrastructure development, access to public transport and quality of property management in the project. 3) Expert advice: It is pertinent that the investor take the services of a reliable real estate agent and a sound lawyer to help ink a deal. 4) Proper research: If investing in a retail store, the investor should consider the frontage, foot-fall and the dynamics of the catchment. 5) Serving the purpose: If buying for self-use, entrepreneurs should ensure that the amenities in the project match their business needs. 6) If an investor is investing as an office asset, he should consider factors like the cash inflow, the vacancy factor, lease term, lock-in period and expiry date, long term capital appreciation potential. He should also consider expenses like maintenance, property tax and building insurance.
Source: Mid-Day, Friday 27 September 2019
Next time it Rains, Step Out!
A rainy day is just what you need to study the area surrounding a prospective property and pick up on its infrastructural flaws. Although many home-buyers have taken advantage of offers by developers during this season, such as zero-down payments or a smart television (TV) that comes with the house, the rise in pothole-ridden roads makes it the first box to tick in a buyer’s mind. In fact, traditionally, the market sees a slowdown during the monsoon, but the lack of infrastructure and the conditions of approach roads to projects that have either just launched or where the civic authorities have not yet caught up with the real estate development in the area, further compound to the downturn in residential projects. Arvind Goel, MCHI Navi Mumbai, says, “The approach roads to your home are vital as prospective homebuyers want to check if they can reach their home without hassles during the monsoon. Also, the worry of whether the vehicle could get submerged or stuck in a pothole prevails.” The onslaught of the rains seen by the city only a few weeks ago and the failure of road connectivity due to waterlogging have been significant causes for concern among citizens.
Source: Times Property, Saturday 28 September 2019
Destination Vasai Virar – North Bound
Maharashtra Housing and Area Development Authority (MHADA) has identified land parcels for developing affordable housing projects across the MMR. And one of the key beneficiaries of this development is the Vasai-Virar belt. Experts therefore believe that going ahead, affordability of the region will be a major driving factor attracting home-buyers and investors alike. This region is connected by both, railways and road. While the western and central railways help people travel across MMR; public buses also help them commute to Mumbai, Thane, Mulund and Mira-Bhayandar. The locality is connected through NH-3, NH-4, NH-8, and NH-17 as well. Commuting is an inevitable hassle for most Mumbaikars. According to recent reports, on an average, a Mumbai resident spends at least four hours a day commuting. As a result, a physical infrastructure upgrade has become the top priority for the government. Therefore, infrastructural projects that will transform the Vasai-Virar belt include:
1) The Virar-Alibaug Multi-Modal Corridor; 2) The extension of the Dahanu railway line to Vasai; 3) The Mumbai-Ahmedabad bullet train (Virar will be one of the stations along the bullet train corridor); 4) The Delhi-Mumbai Industrial Corridor (DMIC) is slated to pass through the region as well; 5) The proposed Panvel-Diva-Vasai-Virar corridor will not only ensure seamless local train connectivity, but also help reduce commute time, which commuters otherwise spent changing trains; 6) The Mumbai Urban Transport Project (MUTP) Phase-3, proposed by the Mumbai Railway Vikas Corporation (MRVC), has listed seven projects, including the quadrupling of lines between Virar and Dahanu and eight new stations along this route; 7) The Mumbai Metropolitan Region Development Authority (MMRDA) also plans to extend the Mumbai Metro Line-9, between Dahisar and Mira-Bhayander, to Virar. Currently, the feasibility of the project is being studied; 8) The proposed Bandra-Virar elevated rail corridor once constructed would fuel the development of the area.
Source: Times Property, Saturday 28 September 2019
Connect with one of our experts. We look forward to helping you with your real estate needs.