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Unsold units in NCR goes spiralling in last two years

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Team iPropUnited
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Unsold stocks increase by 32% in southern cities of Bengaluru, Hyderabad and Chennai put together. Other regions like MMR and Pune saw their cumulative unsold inventory reduce by 10%.

 

The real estate market in NCR is gradually improving post Covid overcoming the delays and lockdowns. Unsold inventory of flats in the NCR region has declined by 12% as compared to first quarter of 2020 and that of 2022 as per the study by real estate consultants Anarock.

During the same period, unsold stocks increase by 32% in southern cities of Bengaluru, Hyderabad and Chennai put together. Other regions like MMR and Pune saw their cumulative unsold inventory reduce by 10%.

In absolute numbers, the number of unsold flats in the NCR cities declined from around 1.7 lakh units in the first quarter of 2020 to 1.5 lakh this year.

Real Estate consultants Anarock vice-chairperson, Santhosh Kumar said, “NCR’s unsold stocks declined from around 1.7 lakh units in quarter 1 of 2020 to 1.5 lakh units by the end of the first quarter of 2022. During the same period, the main southern cities saw their unsold stock increase from 1.2 lakh units to over 1.6 lakh units. However, this rise in unsold inventory was primarily because of a massive new launch rate in Hyderabad.”

For the first time NCR’s total unsold stock was lower than that in the southern cities. Nayan Raheja of Raheja Developers said, “The last two years have certainly been challenging, but there has been growth. There was a huge response from prospective buyers, who consider investing in homes as a secured step. That’s what most of the residential developers are working on. This trust of buyers has resulted in the decline in unsold inventory.”

The concept of mixed use of land with shops-cum-offices, affordable housing and estates, has attracted lucrative investments in realty sector.

Sheeshram Yadav, founder and managing director of Timespro Consulting, said, “Affordable homes have always been the choice of buyers. But there has also been a tremendous increase in the sale of luxury properties. The major deal has been in the high-end category. Properties are being sold out at a remarkable rate in NCR, which has resulted in a 12% dip in unsold inventory.”

Anarock’s Santosh Kumar added, “We attribute NCR’s upbeat performance to the return of confidence among the consumers.”

According to the Anarock report, there has been a 204% increase in new homes between the first quarter of 2020 and 2022. NCR has also broken its previous trend of restricted new supply. “Despite this massive new supply, the region’s unsold stock has seen the sharpest dip in the country,” Kumar said.

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Dalmia Cement propose to invest Rs 2,600 crore in next four years in Tamil Nadu

By
Team iPropUnited
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Regional Director, Sunil Aggarwal said that the grinding unit at Virudhunagar would require funding of around Rs. 600 – 800 crore in the primary phase.

 

On Thursday, Dalmia Cement (Bharat) Ltd., a subsidiary of Dalmia Bharat Ltd. has announced an investment plan of Rs 2,600-crore which will be carried out over the next four years to take up expansion of its existing facilities and also set up new manufacturing units in Tamil Nadu.

Aggarwal said the company propose to set up two Greenfield grinding units at the facility. “We have identified land in Virudhunagar district. It is a Greenfield project. The capacity will be two million tonne per annum. For the second unit, we are looking at south of Chennai,” he told PTI.

He hinted that this initiative will help generate up to 500 new jobs in Virudhunagar and it will also augment the existing facilities.

Aggarwal said that the grinding unit at Virudhunagar would require funding of around Rs 600-Rs 800 crore in the first phase.

Currently two manufacturing units are already running in Tamil Nadu, one in Tiruchirappalli and the second facility at Ariyalur. The company has signed a new memorandum of understanding (MoU) with the Tamil Nadu government for setting up another unit as per official sources.

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Expert’s point GST cut on under-construction flats to reduce tax outgo for buyers as per HC verdict

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Team iPropUnited
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After the sale of under-construction flats/unit the GST is being levied currently, wherein the entire value of flat or unit (including value of underlying land) is taxed after giving Ad Hoc deduction of 1/3 of value of flat/unit towards land irrespective of actual value of land.

As per the ruling by the Gujarat High Court the actual value of land should be deducted before levying GST on flats under construction which would reduce the tax out flow for homebuyers. The contractual arrangement must transparently denote the land value in such cases, experts said.

After the sale of under-construction flats/unit the GST is being levied currently, wherein the entire value of flat or unit (including value of underlying land) is taxed after giving Ad Hoc deduction of 1/3 of value of flat/unit towards land irrespective of actual value of land.

Experts said in urban area or metro cities actual value of land is much higher than 1/3 value of flat and application of 1/3rd deduction is arbitrary in nature as it is applied uniformly irrespective of the area, size and location of land.

“This is indirectly levying tax on land which is beyond the legislative competence of the Union to levy GST on land. This (Gujarat HC) decision will squarely apply where sale agreement clearly specifies value of land and also construction services. This is well reasoned and fair decision, if followed, the tax incidence on individuals buying under-construction flats will reduce substantially,” Naresh Sheth, partner N.A. Shah Associates Partner said.

The Gujarat High Court in its case of Munjaal Manishbhai Bhatt vs Union of India has read down paragraph 2 of Notification No. 11/2017 mandating 1/3rd deduction of land as ultra-vires in its verdict on Friday last week.

Further, the court observed that mandatory deduction of 1/3rd for value of land is not sustainable in cases where the value of land is clearly ascertainable or where the value of construction service can be derived with the aid of valuation rules. Such 1/3rd deduction can be permitted at the option of a taxable person particularly in cases where the value of land or undivided share of land is not ascertainable.

Gujarat High Court Advocate Avinash Poddar, who was also the arguing counsel in the case, said it is expected that now the Government will come up with Valuation Rules as earlier done in the service tax regime.

“It should be understood by the buyers that developers cannot take this stand, till the GST Department synchronises itself with the judgment of the Hon’ble Court. In such a scenario, developers may continue to pay tax on 2/3rd consideration of flats under protest and thereafter, the Developers/Buyers may file the refund claim with the jurisdictional GST authority of the Developer,” Poddar said.

This current judgement may have an important impact on real estate arrangements and development agreements across India said Dhruva Advisors Partner Ranjeet Mahtani.

“In these inflationary times, the verdict is a mild boost for the real estate sector given the potential reduction in GST outgo, provided the contractual arrangement transparently denotes the land value / value of undivided share of land,” Mahtani added

AMRG & Associates Senior Partner Rajat Mohan said this is a triumph for the entire real estate sector against the imposition of tax on arbitrarily computed taxable value. The ruling will bring immediate relief to the writ applicants and would have a high value for the taxpayers in Gujarat; however, this would hold only persuasive value for the rest of India.

“Based on this ruling, other players are also expected to litigate the same issue in higher forums. Even after an unambiguous judicial ruling, developers are not expected to pass on the benefit of such tax cuts, as this matter would be challenged in the apex court,” Mohan said.

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Rs 276 crore raised by Edelweiss Housing Finance through public issue of bonds

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Team iPropUnited
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The company allotted 27, 59,057 NCDs of the face value of Rs 1,000 each, amounting to Rs 275.91 crore. In a release, the company announced that public issue of secured redeemable non-convertible debentures (NCDs) has been successfully completed.

Rs 276 crore has been raised by Edelweiss Housing Finance Ltd (EHFL) through a public issue of bonds that closed on Monday, a release said.

The company has allotted 27, 59,057 NCDs of the face value of Rs 1,000 each, amounting to Rs 275.91 crore. In a release, the company announced that public issue of secured redeemable non-convertible debentures (NCDs) has been successfully completed.

The issue saw good interest from corporates and other investors, while the issue met a significant demand from the retail segment, with total collections of Rs 173.93 crore

“This is a demonstration of the faith that investors across categories have in our technology-powered business model and the appetite for high-quality financial papers that offer competitive interest rates,” Rajat Avasthi , MD & CEO, EHFL said.

The issue has seen interest from investors across series and tenures offering annual, monthly and cumulative interest options with the effective annual yield ranging from 8.49 percent to 9.69 per cent per annum, he added.

The NCDs have been rated ‘ CRISIL AA-/Negative’ and ‘ACUITE AA/Negative’. The bonds will be listed on BSE to provide liquidity to the investors, EHFL said.

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YEIDA to earn Rs 413 crore from one-time settlement plan at simple interest

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Team iPropUnited
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In a bid to give relief to the allottees hit by the pandemic, between October and December last year, YEIDA had come out with a one-time settlement plan.

The 2,700 allottees of the Yamuna Expressway Industrial Development Authority (YEIDA) availed of the benefits of the one-time settlement scheme launched last year. The scheme will earn YEIDA Rs 413 crore in revenue.

YEIDA had approved the payment scheme during its 71st board meeting in September last year to give interest waivers to allottees of all kinds of properties who had failed to clear their dues.

Out of the total number of allottees who took advantage of the scheme, 2,395 are owners of residential plots. In a bid to give relief to the allottees hit by the pandemic, between October and December last year, YEIDA had come out with a one-time settlement plan. As per the scheme launched, the applicants were relieved from paying the penal interest on the dues and were only necessary to pay a lump sum amount at simple interest.

Under the scheme, YEIDA had received a total of 2,688 applications, a maximum of 2,395 for residential properties, 274 for industries, 18 for institutes, and one application in the commercial category.

The authority had already earned a revenue of Rs 238 crore from the scheme till March and is expected to garner the remaining Rs 175 crore by September this year. Of the total amount earned till March, Rs 194.4 crore came from residential properties, Rs 35.3 crore from industrial, and Rs 8.8 crore from the institutional categories. The maximum number of 1,945 applications was received in November, followed by 424 in October and 319 in December.

By September, YEIDA is expected to earn Rs 128.6 crore from residential properties, Rs 36.9 crore from industrial, Rs 9.3 crore from institutional, and Rs 69 lakh from commercial categories.

Amid the pandemic, YEIDA had approved the payment scheme during its 71st board meeting in September last year to give interest waivers to allottees of all kinds of properties who had failed to clear their dues.

131% rise in registration of new projects mainly from rural Madhya Pradesh

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Team iPropUnited
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558 applications have been received for registration in the financial year 2021-2022, the highest since the establishment of RERA years back.

The number of registration of new projects of real estate in Madhya Pradesh has gone up considerably and it indicates that the sector is reviving up after the corona crisis.

As per official statement the work of registration in Madhya Pradesh Real Estate Regulatory Authority (RERA) is being done expeditiously. 558 applications have been received for registration in the financial year 2021-2022 highest since the establishment of RERA years back.

This is about 131 percent more than last year. Despite Covid-19, the maximum numbers of 418 registration applications have been approved in the financial year 2021-22 as compared to the last 4 years.

The secretary of the authority, Neeraj Dubey has informed that in the financial year 2021-22, 482 registration applications have been sanctioned. Out of these, 418 have been approved and 64 applications have been rejected or withdrawn for not being found under the provisions of the Act.

In the financial year 2020-21, 218 project registration applications were approved. Applications were accepted in Jhabua, Rajgarh, Narsinghpur, Vidisha, Barwani, Raisen, Shahdol, Burhanpur and Seoni districts.

Tamil Nadu- CMDA can now approve the multi storied buildings, the applications need not go to government

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Team iPropUnited
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The planning permission applications to be submitted to the government as per the existing regulation has been scraped to expedite the approval process for multi storied buildings.

The Chennai Metropolitan Development Authority (CMDA) has been given more power so henceforth it alone could place approvals for all multi-storied buildings above 18 metres height.

The planning permission applications to be submitted to the government as per the existing regulation has been scraped to expedite the approval process for multi storied buildings.

“The delegation of powers to DTCP’s subordinate officers is also a welcome step,” S Sreedharan, managing director, Sabari foundation said. The industry has also welcomed the change.

Reiterating that CMDA is a cash-rich development and planning agency, he said: “The decision to spend their money for developmental projects is a good step. But they should focus on getting more staff, as, otherwise, the planning process will get affected.”

The CMDA now plans to focus on planning big-ticket development projects and the third master plan in a bid to re-branding itself from being a mere permission issuing authority. It has lined up projects worth Rs 630 crore for the city that were announced at the assembly on Wednesday and will spend Rs 200 crore each for grid roads and street alignments, Rs 100 crore each for waterbody development and 100 crore for making 30 km of Chennai’s coastline including the Marina Beach making it a blue beach conforming to international standards.

Hitesh Kumar S Makwana, secretary, HUDD pointed that these development initiatives will bring a paradigm shift for the housing and urban development in the city where the focus will be on capacity building, train officials, add more capable planners and ensure the future pool of planners gets ready to meet the future challenges of the urban areas. “We are introducing a bachelor’s course in planning within the School of Architecture and Planning at Anna University from this academic year and allocated 10cr for this. We also will improve the service rules for planners to enable them to serve in urban development and other statutory bodies such as urban habitat development board, TNHB and local bodies,” said Makwana.

Ghaziabad- GDA cancels two layout maps of projects of Crossings Republik Township on farmers’ land

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Team iPropUnited
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Councillor Rajendra Tyagi, was approached by a group of farmers from Dundahera village and informed him that the two developers had included their land in the layout plans and got them illegally approved by some officials of the town and country planning department. The inquiry initiated against the developers was carried out on the complaint by councillor.

On Tuesday, the layout maps of two projects in Crossings Republik were cancelled after the Ghaziabad Development Authority (GDA) established that the developers had illegally included in their plans some land belonging to the local farmers.

Councillor Rajendra Tyagi, was approached by a group of farmers from Dundahera village and informed him that the two developers had included their land in the layout plans and got them illegally approved by some officials of the town and country planning department. The inquiry was initiated against the developers was carried out on the complaint by councillor

Vice-chairperson Krishna Karunesh merely issued the order cancelling the two layouts whereas the GDA remained silent on whether they had found any official guilty in the matter.

“About six months ago, four farmers from Dundahera had come to me with a complaint that their land was usurped from them by two developers who wanted to build approach roads there,” Councillor Tyagi said.

He further added that, “They produced documents proving that the land belonged to them. We lodged an official complaint with the GDA, but there was hardly any headway. So, I wrote to senior officials and even to the chief minister. In the last six months, I wrote at least a dozen letters to them”.

Tyagi probed as to how the maps were sanctioned by the GDA department without a proper verification. According to rules, a junior engineer first visits the site for which a map has been submitted to the development authority. “In this case, the plan was approved by both the junior engineer and the executive engineer. It finally reached the town planning department, which also gave its nod,” the councillor said.

The developers, Tyagi alleged, bribed their way through to get the maps approved.

A GDA official, however, explained that Crossings Republik was conceived under the Integrated Township Policy. “Under this policy, developers have the leeway to get their maps passed if they own a minimum 60% of the land on which the project is coming up. In this case, they owned 75% of the land. So the maps were approved. So, according to the policy, there was no wrongdoing on the part of GDA,” the official added.

Alliance Group sells 3,686 homes worth Rs 2,290 crore in FY22

By
Team iPropUnited
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Real estate major Alliance Group and Urbanrise announced that it has clocked Rs 2,290 crore sales during the FY 2021-22. The company clocked sales of 3,686 homes during the year.

The company has lined up a series of new launches of over 25 million square feet of residential projects for the financial year 2022-23. The Alliance Group plans to launch 10 million sq. ft. of projects with an investment of Rs 3,575 crore in Bengaluru, 7.5 million sq. ft. with an investment of Rs 2,350 crore in Chennai and 7.5 million sq. ft. with an investment of Rs 2,690 crore in Hyderabad in FY23.

Manoj Namburu, Chairman and MD of Alliance Group and Urbanrise said, “We are extremely happy in closing this financial year again on a positive note. FY 2021-22 has been a remarkable year in our journey. In spite of the Covid pandemic we have been able to cross many major milestones in the industry.”

He said, “Financial discipline is our organization’s DNA and this is the strength we use to leverage largescale investments into real estate across South India and it is this financial discipline that draws and attracts worlds’ best financial institutions to invest in our organization including the worlds’ largest Sovereign fund ADIA, Kotak Realty fund and many more marquee investment firms.” Vice Chairman Suneel Bommireddy said offering best in class projects, delivering projects on time, maintaining impeccable financial discipline and building homes that caters to the needs of buyers has been its core principle and what differentiates it from other developers.

Home Prices Rising in Early 2022 in Ireland

By
Team iPropUnited
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As per the current report of property portal Daft. during the first three months of 2022, Ireland home prices rose by 2.4% on an average. The average listed price nationwide in the first quarter of 2022 was €299,093, up 8.4% on the same period in 2021 and just 19% below the Celtic Tiger peak.

Increases remain smaller in urban areas, compared to rural areas, although the gap is narrowing.

Prices in the first quarter of 2022 in Dublin, Cork and Galway cities were roughly 4% higher on average than a year previously, while in Limerick and Waterford cities, the increases were 7.6% and 9.3% respectively.

Outside the five main cities, prices rose by an average of 12.3% in the year to March 2022. The increase in Munster (outside the cities) was 13.3%, while in Leinster excluding Dublin, prices rose by 8.7%.

The largest increase in prices in the country was seen in Connacht-Ulster, where prices rose by 20.1% in the year to March – the highest rate recorded for the region since the series began in 2006.

On Marsh 1st only 10,000 homes were listed for sale, another new low in a series stretching back to July 2006, when online advertising was still emerging. During 2019, the average number of homes for sale on the market at any one time was just over 17,500.

Commenting on the report, its author Ronan Lyons, economist at Trinity College Dublin, said, “Inflation in housing prices remains stubbornly high – with Covid19 disturbing an equilibrium of sorts that had emerged, with prices largely stable in 2019 but increasing since. As has been the case consistently over the last decade, increasing prices – initially in Dublin and then elsewhere – reflects a combination of strong demand and very weak supply.

“Both new and second-hand supply remain weaker than expected before the pandemic. Combined with unexpected strong demand, due to accidental savings during lockdown, this has driven up prices. Additional supply – of all types of homes, for sale but also market rental and social rental housing – remains the only real solution to solving Ireland’s chronic housing shortage.”

Average list price and year-on-year change – major cities, Q1 2022

  • Dublin City: €415,117 – up 4.0%
  • Cork City: €318,380 – up 3.9%Galway City: €335,280 – up 4.3%
  • Limerick City: €240,655 – up 7.6%
  • Waterford City: €218,866 – up 9.3%
  • Rest of the country: €249,507 – up 12.3%

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