Despite the falling rupee and and because of a freeze in real estate prices for around six months, the luxury unit’s sales in Delhi-NCR have gone up by around 25 percent in the current fiscal. Both the NRIs and domestic consumers have played their respective roles in this sales escalation.
RK Arora, CMD, Supertech said, “Luxury projects are designed to cater to a very specific target group and affluent segment of the society, who can afford the exclusive offerings of the segment and are always seeking something better. India has the fastest growing number of high net worth individuals in the world and real estate comprises approximately 40 percent of their investment portfolio.”
Arora went on to add that the fall of the rupee by around 20 percent in the last six month has opened a window of opportunity for NRIs to buy a unit back home. “Falling rupees has given NRIs a right opportunity to invest in the Indian real estate market. NRIs will be keen in doing advance payments while the rupee is still weak. At the moment any NRI buying a property in India can save around 20-30 percent on its property value,” Arora said.
Mohit Goel, CEO, Omaxe said, “Increasing rate of HNIs, rapid urbanization and spurt in the NRI/PIO community has accelerated demand for luxury housing. The fall in rupee has only made property cheaper for NRIs looking to invest in India.”
Read more: The Economic Times
Land Act will push up costs
Builders and developers at the South India Real Estate Conference, on Thursday said the Land Acquisition, Rehabilitation and Resettlement Act, 2013 would lead to a steep rise in the cost of acquiring lands.
The conference was organised by the Federation of India Chamber of Commerce and Industry (FICCI).
“With the new Act, the cost of acquiring land would be dramatically high,” said Anup Shah from Anup Shah & Co. According to him, nobody knows what kind of execution machinery would be put in place. It may result in delays in relocation and rehabilitation.
Ravindra Sannareddy, managing director of Sri City Pvt Ltd, said under the new Act, land cannot be acquired. He explained that the cost may shoot up by nearly five times. Also, there was still no guarantee of acquiring lands as farmers did not have to hand over title papers.
“The new Act does not give assurance on titles although there was a rehabilitation scheme,” said Ashwini Kumar, COO, Nithesh Estates.
Chief Secretary S V Ranganath, who was the chief guest at the conference, pointed out that the real estate sector was inextricably linked to urbanisation and the country’s economic growth. However, he said affordable housing was an area that most real estate developers and builders did not consider but it was the need of the hour.
According to him, the real estate industry was facing challenges like cutting costs without cutting corners, scarcity or high cost of land and issues with governance. “The consumer, more often than not, pays for it,” he said.
Read more: Indian Express
Real Estate Regulation Bill to draw fair industry practices, accountability
The Real Estate Regulation and Development Bill is set to encourage fair practices in real estate dealings and will fix accountability with the developer at every stage of development, according to real estate experts.
The Real Estate (Regulation and Development) Bill 2013 seeks to establish the Real Estate Regulatory Authority to protect the interest of consumers in the real estate sector. The Bill is for regulation and promotion of the real estate sector and to ensure sale of plot, apartment of building, as the case may be, in an efficient and transparent manner.
The Land Acquisition and Rehabilitation & Resettlement Bill is expected to reduce litigations and delays in projects by providing defined guidelines for land compensation. Furthermore, the changes to the Special Economic Zone with respect to relaxation to the minimum built up area criteria are a step in the right direction, providing an impetus to real estate developers, according to latest report on real estate by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Ernst & Young (EY).
Said Venu Gopal, executive director, EY: “Revisions in SEZ guidelines helps unlock value from investments and assists in faster completion of the project, thereby easing liquidity pressure. The focus of funding has moved from plain vanilla equity deals to debt and structured products. Valuation presents a significant challenge to equity deals. Mezzanine debt and structured funding helps bridge the gap between the expectation of promoters and investors.”
Read more: Business Standard