Arun Developers, Pune

Arun Park, Opp. Aditya Birla Hospital,
Chinchwad, Pune - 411033

MahaRERA grants six-month extension to builders to deliver projects

"All MahaRERA registered projects where completion date, revised completion date or extended completion date expires on or after April 15, 2021, the period of validity for registration of such projects shall be extended by six months," the Authority said in a notification.MahaRERA grants six-month extension to builders to deliver projectsMUMBAI: The Maharashtra Real Estate Regulatory Authority on Friday allowed a six-month relief to builders to deliver projects by accepting their demand for invoking the 'force majeure' clause because of the second wave. This is the second time in the pandemic that the authority has granted such a relief for the builders in the state. "All MahaRERA registered projects where completion date, revised completion date or extended completion date expires on or after April 15, 2021, the period of validity for registration of such projects shall be extended by six months," the Authority said in a notification. The Authority added that it will accordingly issue project registration certificates with revised timelines for such projects at the earliest and also made it clear that the extension will not apply to projects that were to be completed before April 15. The notification said the state government had on April 13 issued directions regarding restrictions on the movement of people because of the second wave of infections and added that this wave was more lethal. The lockdowns led to construction activities coming to a standstill due to non-availability of labour and impact on the movement of building material, it said. "A force majeure period of six months from April 15 to October 14 is being declared," the notification said. The order has been issued in order to aid government efforts in controlling the damage caused due to COVID-19 and ensure that completion of projects does not get adversely affected, it added. The time limits for projects, which became due anytime during the force majeure period, will automatically stand extended for a period till the expiry of the period, it said clarifying that the rights of the allottees will not get affected through the order. The notification said promoter organisations had represented before the Authority requesting for this relief in the wake of the second wake crippling the industry. "It is a move in the right direction and the real estate hopes for authorities other than MahaRERA to follow the same thought process and grant similar relief," developer Niranjan Hiranadani, national president of realty industry body Naredco, said.Follow and connect with us on Twitter, Facebook, Linkedin
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Policy regime nudged fence-sitters to be first-time homebuyers: Niranjan Hiranandani

Policy regime nudged fence-sitters to be first-time homebuyers: Niranjan HiranandaniHe believes that the regulatory aspects have also brought in a safe and secure environment to the sector.Rajesh KurupThe need for secured assets and aspirations to own spacious homes as remote working is fast becoming the new norm is driving sales of residential properties across the country. Further, investors are also warming up to Real Estate Investment Trusts (REITs), Niranjan Hiranandani, national president at National Real Estate Development Council (NAREDCO).In an interview withBusinessLine, Hiranandani, who is also the managing director of real estate firm Hiranandani Group, is of the opinion that the regulatory aspects have also brought in a safe and secure environment to the sector. Edited excerpts:This year, housing sales across major cities have been on the rise? Where is this demand coming from?The disruptive pandemic has predominantly reinforced the value of owned houses. The need for a secured asset that offers stability and safety in crisis is a goldmine investment against volatile assets. The remote working trend further fuel the urge to own a large spacious home in peripheral cities at attractive price points to integrate new normal living conditions.In addition, market dynamics and policy regime are skewed towards nudging the fence-sitters to convert into the first-time home buyers and existing ones to upgrade into luxury homes catalysed by fiscal growth levers.After the initial hesitation, REITs are gaining ground, and despite the pandemic, there were two successful public issues?REITs are an alternative option for investment in real estate at a low unit price entry point. It reflects growing confidence in commercial real estate as an asset class. The Indian real estate investor has gradually warmed up to REITs. The two successful public issues are just the beginning of what will gradually grow in investor confidence.Recently Maharashtra Urban Development ministry has amended the Unified Development Control and Promotion Regulations, allowing 5 per cent amenity space for construction in plots. Your comments?The recent amendment (notification is awaited) aims to infuse positivity for commercial real estate development. If up to 5 FSI is allowed for commercial business districts, then the move will be perceived to augment more commercial real estate spaces to be developed, which will create more employment opportunities. This will also foster the development of more commercial business districts (CBDs) in the state, ensuring equal development across and not just the leading commercial cities like Mumbai and Pune. The move should augur well for the state’s economic growth. It will also allow economies of scale to positively impact the viability of commercial projects.A lot of residential projects in the country, including ultra-luxury ones, are marred by delays?The Indian real estate sector was rebooted with structural policy reforms, and the pandemic was a nail in the coffin. The industry suffered from liquidity starving, muted demand, subdued investment, hindered sales velocity, disrupted supply chain, skyrocketing prices of essential raw materials, and acute migrant labour crisis. These challenges uprooted many developers in crisis and stalled up the designated timelines.With mission unlocking, the industry witnessed excellent sales velocity in lieu of fiscal stimulus but the resurgence of the second Covid wave derailed the growth trajectory. The authorities have been considering a timeline extension to cope up with the delays. Many of the branded developers with strong financial discipline and proven track records will fast-track the work progress and assure timely delivery.Covid-19 has shuttered smaller players across various industries, while the stronger, larger entities have survived. Did the pandemic have a similar effect on real estate as well?Any economic crisis – and the Covid-19 pandemic fits the description perfectly – first impacts smaller players across industries, as surviving such challenging situations needs ‘deep pockets. For financially weak players, recent regulatory jolts led to a difficult ground for navigating, and Covid-19 impacted many projects’ profitabilities and viability of the business.The over-leveraged players opt to deleverage by consolidation, joint development, asset-light model, monetisation, mergers to re-anchor the sinking ship.RERA has brought in some amount of transparency and accountability to the sector?RERA is moving in the right direction and is taking the industry to the right aspects of accountability. The regulatory aspect has brought in a safe and secure environment, one in which we see unscrupulous elements being weeded out. Obviously, this also leads to enhanced customer confidence.On Greenbase’s, an industrial and warehousing platform of Hiranandani Group, future plans?Greenbase has been working at delivering a holistic slew of offerings for end-users, and there are geographies where we are already working on creating logistics and light industrial parks.As the vaccination drive gains pace, we are bullish on the Indian economy and the sustained demand for logistics and light industrial parks. Some locations (near Pune, Nasik and Oragadam, Chennai) are ‘work in progress’, while in some other locations, the parks are still on the drawing board.
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PE investment in real estate touch $2.9 billion in H1 2021: Report

PE investment in real estate touch $2.9 billion in H1 2021: ReportThe total private equity inflows in the real estate sector are expected to be about USD 5 billion in 2021, a 4.1% increase from 2020, according to the company.PE investment in real estate touch $2.9 billion in H1 2021: ReportNEW DELHI: Private equity investment in Indian real estate touched USD 2.9 billion in the first half of 2021, more than a two-fold increase from H1 2020, according to recent report by Colliers.The total private equity inflows in the real estate sector are expected to be about USD 5 billion in 2021, a 4.1% increase from 2020, according to the company.Office assets accounted for 35% of the total investments in H1 2021, followed by industrial and warehousing assets with a share of 27%. Investors are viewing the current scenario as an opportunity to snap up properties at attractive valuations."The investment trends reflect an interest in broader classes of assets and structures. Deal types include, forward purchase of office assets, formation of platforms and acquisitions with development risks in office assets, opportunistic acquisitions of retail assets, industrial assets including warehousing and data centers, large credit transactions for portfolio acquisitions, and development financing," said Piyush Gupta, MD, Capital Markets & Investment Services (India), Colliers.During H1 2021, about 86% of the total investments in the office sector were in land or projects under-construction. Investors continue to scout for either land or assets in under-construction stage, as they look to build their portfolio for a future REIT listing. This is due to limited availability of quality rent-yielding assets at attractive valuations, as most of the large developers are already in partnerships with institutional investors.Investments in retail assets accounted for 29% of the total investments in H1 2021. Despite Covid posing a significant disruption to retail businesses and causing a major drop in rental revenues, investor appetite remained intact for exposure to stabilized retail assets as well as for investments in ground-up developments in partnership with selective developers."For the remainder of the year, we also believe that last-mile funding and investments into distressed housing assets will gain traction whilst many investors are also looking at investing in attractively priced assets, which may not be the current flavour but are expected to witness increasing demand post covid-19 as demand picks up for them," said Siddhart Goel, senior director & head, Research at Colliers India.
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Real estate market to touch $1 trillion by 2030: Housing secretary

Real estate market to touch $1 trillion by 2030: Housing secretary​The number of people employed in the sector is also expected to rise to 7 crore in coming years, from 5.5 crore in 2019, he said while addressing a CII event on the real estate sector.Real estate market to touch $1 trillion by 2030: Housing secretary NEW DELHI: The Indian real estate market is estimated to touch USD 1 trillion by 2030 driven by rising demand and various reforms in the past seven years like new realty law RERA, Housing and Urban Affairs Secretary Durga Shanker Mishra said on Wednesday.The number of people employed in the sector is also expected to rise to 7 crore in coming years, from 5.5 crore in 2019, he said while addressing a CII event on the real estate sector. The secretary further said that the states have been asked to soon implement the Model Tenancy Act, which was passed by the Union Cabinet in June this year. Mishra also clarified that the law once implemented by the states will be prospective in nature and all disputes related to rent agreements will be dealt under the old laws of respective states. He pointed out that the real estate sector suffered a "setback" during the first and second wave of the COVID-19 pandemic but said the housing demand has revived. "The size of the real estate sector was around USD 200 billion 2-3 years ago. We expect the real estate market to touch USD 1 trillion by 2030," the housing secretary said. "It is not mere talk and guess work. The trend clearly shows that the real estate sector of our country will touch the figure of USD 1 trillion in the next 7-8 years," Mishra said, while emphasising the importance of this industry in the Indian economy. Citing various reports of property consultants, the secretary said housing demand in the first quarter of this fiscal year has risen as compared to the year-ago period. Talking about the importance of this sector in employment generation, he said: "Around 5.5 crore people were employed in the sector as per 2019 figure. Our predictions for the future is that around 7 crore people will be employed in this industry." That apart, Mishra said the real estate sector creates demand for about 270 other industries, including cement and steel. "Therefore, real estate is an important sector of the economy. Nobody should have any doubt about it," he stressed. Hence, Mishra said, the government has given a lot of focus on this sector in the past seven years and has taken measures in every budget since 2014. The secretary said it is estimated that around 88 crore people will be living in urban areas by 2051 as against the current 46 crore, creating huge potential for real estate development. Describing the enactment of new realty law RERA as the biggest reform, he said the new legislation has taken the industry to another level. "RERA has transformed this sector and changed the perception of this industry. Consumers now have confidence that their investments are safe," Mishra said. Sharing the success story of RERA, he said around 67,000 projects and 52,000 property agents are registered under this law. More than 70,000 cases have been disposed of by the real estate authorities established under this law. All states, except West Bengal have implemented this law, he said, adding that the ministry has written to the state government regarding this. He listed Model Tenancy Act as another reform that would create a lot of demand for rental housing in the country. The secretary said the ministry has asked all states to implement this law at the earliest. Referring to media reports raising concerns related to the fate of traditional 'Pagdi agreements' in Mumbai, Mishra said the new law will be prospective and not retrospective. Therefore, he said the existing rent agreements will not come under its ambit. "It will be prospective in nature." The provisions of this Model Tenancy Act clearly mention that all disputes related to existing rent agreements will be dealt under the old laws even after their repealment, the secretary emphasised. Mishra also talked about reforms for ease of doing business in the real estate sector. He said the government has taken steps to provide online permission for construction, which will eliminate delays and corrupt practices. The secretary highlighted other reforms like introduction of Real Estate Investment Trust (REIT) and the launch of stress fund named SWAMIH to complete stalled housing projects. Mishra said the Affordable Rental Housing Complex (ARHC) scheme launched by the government to develop homes for migrant workers will also create business opportunities for the sector. The secretary asked the real estate industry to focus on affordability of residential properties to attract buyers from lower and middle income group. Neel Raheja, Co-Chair, CII National Committee on Real Estate and Housing and Group President of K Raheja Corp, talked about high government charges and finance cost in the sector that impacts affordability. Anshuman Magazine, Deputy Chairman of CII Northern Region and Chairman and CEO - India, SE Asia, Middle East & Africa at CBRE, expressed confidence about the future growth of all the segments of the real estate sector. Mohit Malhotra, Managing Director & CEO of Godrej Properties Ltd, said the industry needs to attract equity capital to fuel growth. He also stressed on improving productivity by use of latest technology. Malhotra said the real estate sector is getting consolidated from highly fragmented. Amit Gossain, Chairman, CII Urban Development and Smart Cities Council and Managing Director of KONE Elevators India Ltd, said the COVID-19 pandemic has brought "short-term blip" in the sector and felt that long-term growth potential remains intact.Follow and connect with us on Twitter, Facebook, Linkedin
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Mumbai real estate: Respect all religions. But only from a distance

Mumbai real estate: Respect all religions. But only from a distanceA key inference from the Pew survey is that while Indians say it is important to respect all religions, major religious groups feel they have little in common, and want to live separately.Representational image of Powai, Mumbai. The Pew survey 'Religion in India: Tolerance and Segregation' crystalized something we've known all along: people prefer neighbours from similar religious backgrounds, even in Mumbai.Representational image of Powai, Mumbai. The Pew survey 'Religion in India: Tolerance and Segregation' crystalized something we've known all along: people prefer neighbours from similar religious backgrounds, even in Mumbai.At the peak of the COVID-19 crisis last year when developers in Mumbai were in utter panic, a prospective home buyer decided to take the plunge and buy an apartment. His preferred project was one which was close to completion and had sold only one-third the inventory, causing the developer a challenge in servicing his loans. The buyer showed interest but the desperate builder rejected the buyer. The builder was not foolish or delusional in his price expectations. He merely faced a challenge that has been almost impossible to penetrate in Mumbai real estate – a Muslim homebuyer.I was reminded of this episode after reading a recent report by the Pew Research Centre titled ‘Religion in India: Tolerance and Segregation’. The key inference of the Pew survey was that while Indians say it is important to respect all religions, major religious groups see little in common and want to live separately.For me, one data set is worth delving into from a housing perspective. That data set is – Indians who say they would not be willing to accept people from another religious group as neighbours.The finding is clear – there is resistance to seeing people from another community stay next to you: 36% of Hindus and 33% Sikhs would not be willing to accept a Muslim as a neighbour. Additionally, 25% of Muslims and Sikhs would similarly not want a Christian living next-door to them; 54% of Jains would not want a Muslim neighbour; while 47% would not be willing to have a Christian neighbour. The Buddhists seem the most flexible in their choice of neighbours.In one way, the survey has broken new ground in bringing out a reality that has long existed. In another way, from a Mumbai real estate perspective, I have to concede that a survey done exclusively for the city – would throw substantially higher numbers. By national benchmarks, it is believed that Mumbai is an outlier where religion matters for little. It’s a good narrative. There is only one problem: It’s not true. And it is definitely untrue when it comes to housing.Parsis and Christians try to enable their own cocoons which permit sale or rent often only to people from their own community. The Jains prefer being only around other Jains, to the extent that there are localities that have restaurants which don’t even dare to serve non-vegetarian food. Muslims prefer having members of their own community in a locality.Due to a combination of demographics and poverty, the biggest discrimination is often faced by members of the middle and upper middle-class Muslim community. They are torn between not wanting to reside in the chaotic ghettos while being rejected from housing opportunities in localities that they want to reside in. It is tough to arrive at a specific number on this but I would reckon that at least 50% of Hindus would be uncomfortable with a Muslim neighbour. And that number would go as high as 70% with Jains. Remember, 66% of Mumbai’s population is Hindu and 4.1% follow Jainism.On the principle of fair and equal housing, it is undeniable that the Muslim community has received a raw deal over the years. At the same time, it is hard to argue against the concerns that several people have with regards to Muslims.I’m aware that there are reservations over food habits that act as a thorn in the flesh for a few communities. To be honest, I am not sure if that is a major reason for the discrimination. There are bigger reasons at work in my view. On one extreme is the perception that members of the Muslim community can be a security and safety threat, and need to be shunned. At the centre is a view that has been fostered by looking at the shoddy conditions of Muslim-dominated localities. On the other extreme is the financial point of view that says ownership of apartments by a meaningful number of Muslims in a particular project or locality often results in a decline in property values.It’s a complex phenomenon, and I take no decisive view on the subject. However, I will say that the perception against Muslims is exaggerated in comparison to ground reality. The problem is that there appears to be no solution in sight. At the public housing level there is little that can be done, given how compromised Mumbai’s housing administration is. Countries like Singapore promote inclusivity through public housing where residents of different communities are given allocation in the same premises. On the other hand, private housing is now a victim of a virtuous cycle where discrimination is so entrenched that it appears almost impossible to penetrate. The only solution, albeit slow, is if developers and societies evaluate each buyer on their individual merit and approve those that fit the sensibilities of that particular society.In the end – the Pew Survey shows us the mirror to who we have always been. We respect other religions – as long as it is from a distance.
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California eyes shuttered malls, stores for new housing

California eyes shuttered malls, stores for new housingEven before the pandemic, big-box retail stores were struggling to adapt as more people began buying things online. In 2019, after purchasing Sears and Kmart, Transformco closed 96 stores across the country - including 29 in California.California eyes shuttered malls, stores for new housingSACRAMENTO: California state lawmakers are grappling with a particularly 21st-century problem: What to do with the growing number of shopping malls and big box retail stores left empty by consumers shifting their purchases to the web.A possible answer in crowded California cities is to build housing on these sites, which already have ample parking and are close to existing neighborhoods.But local zoning laws often don't allow housing at these locations. Changing the zoning is such a hassle that many developers don't bother trying. And it's often not worth it for local governments to change the designations. They would prefer to find new retailers because sales taxes produce more revenue than residential property taxes.However, with a stubborn housing shortage pushing prices to all-time highs, state lawmakers are moving to pass new laws to get around those barriers. A bill that cleared the state Senate last week would let developers build houses on most commercial sites without changing the zoning. Another proposal would pay local governments to change the zoning to let developers build affordable housing."There has always been an incentive to chase retail and a disincentive to build housing," said Sen. Anthony Portantino, a Los Angeles-area Democrat who authored the bill to pay local governments. "There is more dormant and vacant retail than ever."If successful, it's believed California would be the first state to allow multi-family housing on commercial sites statewide, said Eric Phillips, vice president of policy and legislation for the California chapter of the American Planning Association. Developers who use the law still would have to obey locally approved design standards. But Phillips said the law would limit local governments' ability to reject the projects.That's why some local leaders oppose the bill, arguing it undermines their authority."City leaders have the requisite local knowledge to discern when and which sites are appropriate for repurposing and which are not," wrote Mike Griffiths, member of the Torrance City Council and founder of California Cities for Local Control, a group of 427 mayors and council members.It's a familiar battle in California. While nearly everyone agrees there is an affordable housing shortage, state and local leaders face different political pressures that often derail ambitious proposals. Last year, a bill that would have overridden local zoning laws to let developers build small apartment buildings in neighborhoods reserved for single-family homes died in the state Senate. Sen. Anna Caballero, a Democrat from Salinas and author of this year's zoning proposal, said her bill is not a mandate. Developers could choose to use the bill or not. The Senate approved the measure 32-2, sending it to the state Assembly for consideration."It's always a challenge when you're trying to do affordable housing, because there are entrenched interests that don't want to negotiate and compromise, and we're working really hard to try to break through that," she said. "I'm trying to give maximum flexibility to local government because the more that you start telling them how they have to do it, the harder it becomes for them to actually do it."Even before the pandemic, big-box retail stores were struggling to adapt as more people began buying things online. In 2019, after purchasing Sears and Kmart, Transformco closed 96 stores across the country - including 29 in California.The pandemic, of course, accelerated this trend, prompting major retailers like J.C. Penney, Neiman Marcus and J. Crew to file for bankruptcy protection. An analysis by the investment firm UBS shows online shopping will grow to 25% of all retail sales by 2025. The analysis predicted that up to 100,000 stores across the country could close.Local governments and developers in California are already trying to redevelop some retail sites. In Salinas, a city of about 150,000 people near the Monterey Peninsula, city officials are working to rezone a closed Kmart. In San Francisco, developers recently announced plans to build nearly 3,000 homes in the parking lot that surrounds Stonestown Mall - a sprawling, 40-acre site that has lost some anchor retail tenants in recent years.Still, the idea of repurposing shopping centers has divided labor unions and affordable housing advocates, putting one of the Democratic Party's core base of supporters against backers of one of their top policy goals.Housing advocates love the idea, but they don't like how Democrats want to do it. Both proposals in the Legislature would require developers to use a "skilled and trained" workforce to build the housing. That means a certain percentage of workers must either be enrolled or have completed a state-approved apprenticeship program.Developers have said while there are plenty of trained workers available in areas like San Francisco and Los Angeles, those workers are scarce in more rural parts of the state, potentially delaying projects in those areas.California needs to build about 180,000 new housing units per year to keep up with demand, according to the state's latest housing assessment. But it's only managed about 80,000 per year for the past decade. That's one reason the state's median sales price for single-family homes hit a record high $758,990 in March."At a time when we're trying to increase production, we don't believe we should be limiting who can do the work," said Ray Pearl, executive director of the California Housing Consortium, a group that includes affordable housing developers.Robbie Hunter, president of the State Building and Construction Trades Council of California, dismissed that argument as just greedy developers trying to maximize their profits. He said there is no construction project in California that has been delayed because of a lack of workers, adding: "We man every job.""When there is a demand for workers, we rise with the demand," Hunter said.Labor unions appear to be winning. A bill in the state Assembly that did not initially require a "skilled and trained" workforce stalled in committee because it did not have enough support.Follow and connect with us on Twitter, Facebook, Linkedin
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Real estate sector to cross USD 1 trillion by 2030: Housing Secretary

Real estate sector to cross USD 1 trillion by 2030: Housing Secretary"By 2030, when we are projecting our economy to go up to USD 10 trillion, nearly 10 per cent of that will come from the real estate sector itself," he added.NEW DELHI: The size of real estate sector is projected to cross USD 1 trillion by 2030, Housing and Urban Affairs Secretary Durga Shanker Mishra said on Monday. "In 2019-20, real estate sector contributed nearly 7 per cent to our GDP. Its total contribution was to the tune of USD 200 billion to our GDP....And projections are that by 2030 this number is going to cross USD 1 trillion," Mishra said. also noted that real estate is an important sector for the economy with around 11 per share in the total employment numbers. The secretary was speaking at a virtual event to launch Housing Price Index, created by realty portal and Indian School of Business (ISB) in association with industry body NAREDCO. "By 2030, when we are projecting our economy to go up to USD 10 trillion, nearly 10 per cent of that will come from the real estate sector itself," he added. Mishra said the sector is also very important from the point of view of employment and highlighted that out of 50 crore jobs, real estate provides 5.5 crore employment opportunities. The secretary said the real estate sector has transformed in the last seven years and implementation of the Real Estate (Regulation and Development) Act, popularly known as RERA, has played an important part in making a paradigm change. He said the central law has already been implemented across all states/UTs, except West Bengal and Nagaland. Mishra said a large number of real estate projects and property brokers are registered under RERA. The government has taken various measures in the Budget of last seven years to spur growth in the real estate sector, he added. "Every Budget has some announcement for real estate sector." The secretary emphasised on having robust digital platforms for smooth and transparent real estate buying-selling process. Mishra said he had asked CREDAI and NAREDCO, the two major associations for real estate, to create a digital platform for real estate, similar to Amazon, and some progress has been made in this regard. On Housing Price Index by and ISB, Mishra said the data will be collected from developers and then the same will be analyzed through data analytics. The secretary said the index will give an insight for the further growth of the sector. Mishra said the index will be beneficial for homebuyers as well as policymakers.
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Housing minister Hardeep Singh Puri explains model tenancy act

Housing minister Hardeep Singh Puri explains model tenancy actThe government of India on Wednesday approved the Model Tenancy Act, 2021 with a provision to set up district-wise rental courts, authorities and tribunals across the country. The Union Cabinet chaired by PM Modi approved the Act for circulation to all states and UTs for adaptation by way of enacting fresh legislation or amending existing rental laws.Minister of Housing and Urban Affairs Hardeep Singh Puri discussed the merits and challenges of the Model Tenancy Act for rental housing in India with ET Now's Nayantara Rai. Edited excerpts:Regarding the Model Tenancy Act, how will you change the psychology of people to follow this once the states follow suit? What will be the biggest challenge according to you? I would hardly describe myself as the Chief Architect of this Model Tenancy Act. The idea of a Model Tenancy Act has been around for a long time and I am a relative newcomer to the scene. I have only joined the council of ministers in September of 2017 and this idea was very much around. Let me tell you, there was a GoM Form sometime in 2019, but even before that when my friend Arun Jaitley was the Finance Minister, I recall attending meetings in his room regarding it. So, it has been going around for a long time. You are right in describing this as a model act because land is a state subject. If we were to enact legislation at the central government, the state would say you are intruding on our turf. So, it is a model act and the purpose is to provide a regulatory framework which is benign and results in the large stock of empty units, both residential and commercial in urban areas as well as rural areas, to become available. How will they become available? Because landlords will hopefully with this new dispensation coming have the confidence to be able to allow their properties to be rented out based on modern contractual conditions – which the states will provide through either the existing legislation or by enacting new legislation – and on terms and conditions to be agreed between the buyer and the seller of the service, which is a tenant who is getting the premises for a defined period of time on terms and conditions which the landlord will provide. It is a very important step and something that we have been waiting for. It will apply to all transactions prospectively and I think the greatest challenge always was how do you anchor this new dispensation in a dispute settlement resolution or a dispute resolution mechanism which takes it away from the cumbersome and often endless bureaucracy of the courts, etc. We have been able to do that and I think implementation will come quickly. Relief will also be seen both by the users and by the economy in general. According to the 2011 census, we had over 1 crore units which were lying unutilised. This is the 2011 figure, it may well be higher now when we get the next census figure. We will be sending this out to the state governments and the UTs. All the other things: how you implement it, how people get the confidence will follow very quickly. Mr Puri as you mention, this is going to be prospective. What is it going to do for the rent ceiling which is already in place or the pagdi system already in place? First off, every time you try to bring in any reform, you can start with the safe presumption that there will be challenges. Therefore, we have factored that in when we enacted RERA. I think it was sometime in 2016, there were attempts including in very powerful circles to somehow scuttle it because they thought ‘oh my god’. This is both the strength and the weakness. For 70 years of our existence as an independent country, we did not have a regulator in the construction area which is one of the largest contributors to employment and to the GDP, etc. When the law saw the light of day after a big struggle, people decided that they wanted to scuttle it. What happened? They mounted legal challenges. The challenges were taken up in the Mumbai High Court and I am delighted that those challenges were met. We were able to implement RERA throughout the length and breadth of the country, except one famous state which decided to enact its own legislation in the form of RERA, which is West Bengal. That legislation was challenged in the Supreme Court and on 4th May this year the Supreme Court squashed it. In this state, we looked at all that. First of all, the current problem is that a lot of residential and commercial units are lying vacant. Those which are under pagdi are already occupied whether the pagdi was paid 10 years ago or 50 years ago in some cases. They are informal arrangement. That is a different issue, but that system is in place. In this case, there is no system. Therefore, the landlord will not give the premises on rent to a prospective tenant. So, what we will do is that it applies to all prospective. I have no doubt personally that with the passage of time and when this Model Tenancy Act becomes entrenched in the law, rules, and regulations of the state governments and the union territories, all the other areas will also see some benefit. You know, people go to courts and the civil courts may tie them up in knots, etc. Then you already have a cumbersome traditional system of pagdi. We leave that aside for the moment. Now you will have a dispute settlement machinery which will be timebound through rent authority and adjudicating authority, etc. So, they will resolve these differences within 60 days. This will have a very positive demonstrative effect and all the others will begin to see reason, as we saw in the case of RERA where all kinds of problems came up. But as we started implementing RERA, we discovered that at the end, not only were the home buyers happy, but even the builders, etc., decided that they saw merit in utilising and practice it. I am not saying that all is hunky dory, but whenever you try to introduce reform, it takes time for things to fall in place. In the Model Act, the security deposit is two months in the case of residential property and six months for non-residential. Why should the government be fixing that at all? Should that not be a private negotiation? My understanding is this is only indicative, we are not prescribing any limits. At the end of the day, it is the states which have the primary jurisdiction for this, and the landlord and the tenant who will determine it. I mean it is entirely possible that you may own a property which you think requires a deposit which is higher, and if I am a prospective tenant, I may or may not agree. But whatever happens, we will register that property on the portal, then the terms and conditions which the tenant and the landlord have agreed to will also find mention there along with what are the responsibilities of the tenant and landlord, and two months for residential and six months for non-residential is a broad indicative template. It is entirely possible that states determine that based on their own local requirements, which may be more or less. Central government is only putting forward a template comprised of what could be regarded as best practice.You mentioned that as per the 2011 census information, there are 1.1 crore vacant houses that we have. What is the expectation? Would builders now look at maybe renting them out? Or will institutional investors/corporate take houses and lease them out to employees? Let me start by providing you a perspective of what my understanding is. You see, we have under Pradhan Mantri Awas Yojana urban – and the figure is much higher for Pradhan Mantri Awas Yojana Gramin – already envisaged 1.12 crore of residential dwelling. Now we are doing that and we are doing affordable rental housing complexes following our experiences with the pandemic; both in model 1 and 2. Some commercial entities will build new places for renting for their own staff. There are existing properties that we have put. In all these cases, there was always hesitation ‘ki ek baar aapne kiraye pe de diya’ you may kiss ever getting your property back goodbye because of the experiences of the past. Earlier there was a system like pagdi, there were other informal systems, I do not want to go into that. That is why some landlords did not want to give their homes to private tenants. They would only want to do company lease because that way you can at least move the registrar of companies. Now with this Model Tenancy Act coming into being, hopefully the landlords will get comfort for all categories. There is affordable housing being built by private people. Surely, no builder after constructing a massive complex wants those to be kept vacant. I mean they have borrowed money on the market, they are paying cost on the capital, and they would like to utilise them. Similarly, people who bought the places would want to either live in it themselves or give them out on rent. So, everybody gets a sense of confidence through this Model Tenancy Act and I expect that the impact will be visible in a short time frame. This is also going to be for commercial real estate?Yes, this is regulatory framework for residential and commercial, urban and rural.Do you think this will help reviving the real estate sector? How important is this going to be to revive the market and also to bring back confidence?Well first and foremost, I am a strong believer that people will want to own houses irrespective of whether there is a pandemic or not. In fact, we have seen some revival of the market taking place independently in certain metropolitan areas, etc., even before the second wave came. Of course, then there was a slowdown on account of the second wave. This will certainly be a positive contributing factor. But you know, the Model Tenancy Act has just been passed by the cabinet today, it is too early in the day to be able to quantify the benefit it will generate in the next two weeks. I have no doubt that all the properties that have been built have benefited from RERA because now builders can no longer divert the funds collected from unsuspecting home buyers. They have to employ 70% of those funds in an escrow account to be utilised on the project. That siphoning off is stopped and those projects where maybe the sales have not taken place, maybe some of them would want to put them out on rent. It is a very interesting situation.We have a lot of demand for housing and we have availability of housing. Why is it that when there is a demand and there is availability, things cannot be done because there were some gaps. Now the fourth quarter 2021 GDP figures have been released that show construction is in the positive trajectory. Last year the first quarter was bad. Why was it bad? Because on 25th March we went in for a complete total lockdown. Then we started opening towards the end of May, therefore we had virtually lost April and May totally. June when we opened up there was very small opening up. Now you had a 23% contraction in those three months. That contraction in the second quarter went to 7.5%, then a little more. By the time we reached the fourth quarter, the good news is that we had a 1.6% overall increase which put us in positive. So, my first submission to you Nayantara is validated, that construction by itself is there with the Model Tenancy Act coming into play. That will receive a further fillip of boost. To what extent? I am a careful person, I cannot quantify. If you have many more programmes of the kind you are doing now and use your medium to disseminate information on the Model Tenancy Act, which I have every intention of doing in the coming few days, it will instil confidence in the consumers, in the land owners or in the owners of building, owners of properties, residential or commercial. I think it is a very positive step.Follow and connect with us on Twitter, Facebook, Linkedin
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Maharashtra set to implement model tenancy act: Housing Minister

Screenshot-2021-06-04-at-1.20.21-PM Maharashtra set to implement model tenancy act: Housing Minister
Maharashtra set to implement model tenancy act: Housing Minister“We will evaluate and study the act minutely as it has only been okayed yesterday,” state housing minister Jitendra Awhad told TOI on Thursday.Maharashtra set to implement model tenancy act: Housing MinisterPUNE: Officials of the state housing department will study the Model Tenancy Act thoroughly to see how best it can be implemented in the interest of the people.“We will evaluate and study the act minutely as it has only been okayed yesterday,” state housing minister Jitendra Awhad told TOI on Thursday. The Union government has already said that the states are free to make changes as land is a state subject.Meanwhile, Shantilal Kataria, Credai vice-national president, said that the act would boost the rental segment in the state. “It is a long-awaited model act and this being a state subject, the government would be expected to adopt it and form rules and appoint competent authority at the earliest,” he said. He further stated that the act would protect the interest of both tenants and owners and ensure speedy adjudication mechanism for resolution of disputes. Anuj Puri, chairman, Anarock Property Consultants, said the act could fuel the rental housing supply pipeline by attracting more investors, and more rental housing stock would help students, migrant population to find accommodation.Follow and connect with us on Twitter, Facebook, Linkedin
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Government to look into builders' demand to boost realty sector:

Government to look into builders' demand to boost realty sector: Housing secretaryNAREDCO's representatives made several demands before the secretary to revive both demand and supply in the sector that has been badly affected by the COVID-19 pandemic.Government to look into builders' demand to boost realty sector: Housing secretaryNEW DELHI: Housing and Urban Affairs Secretary Durga Shanker Mishra on Friday said the government will look into various demand of the real estate industry, including an extension of timeline for completion of projects by 6-9 months.He highlighted various initiatives taken by the government in the past seven years such as development of 1.12 crore houses under the Prime Minister Awas Yojana (PMAY), launch of the Affordable Rental Housing Complex scheme for migrant workers, 'infrastructure' status to affordable housing, and 100 smart cities. Mishra was addressing a webinar organised by realtors body NAREDCO. NAREDCO's representatives made several demands before the secretary to revive both demand and supply in the sector that has been badly affected by the COVID-19 pandemic. The association sought extension of timeline for completion of projects by 6-9 months under the realty law RERA, extension of all building permissions till March 2023, rationalisation of government taxes on real estate, and control of rising prices of cement and steel. It also sought reintroduction of interest subvention scheme, grant of input credit tax on GST paid in leased commercial real estate, suspension of insolvency law for some more period, and an online environment clearance system. Responding to the demand of extension of timeline for project completion, Mishra assured that he will "go in detail" to understand the matter. "If need be, we will take this matter to RAC (RERA Advisory Council)," he said. However, the secretary did mention that this relief was given last year because of the imposition of the national lockdown. On high taxes levied by the central and state governments on real estate, Mishra directed the ministry's senior officials to examine the matter in detail. "We will try to reduce government levies," he said. Regarding a rise in prices of steel and cement, Mishra said he took up this issue with the ministry's concerned and would discuss the issue again. On the PMAY, he said 1.13 crore houses have already been sanctioned and out of that, 48 lakh have been completed and handed over to the people. The secretary informed that India's ranking in ease of doing business related to construction activities improved to 27 from 186. He said the new ranking is expected any time and expressed confidence that "we will be in top-20". The secretary said the real estate sector contributes seven per cent to the gross domestic product (GDP). It is a USD 200-billion industry and set to become a USD 1-trillion sector with rapid urbanisation, he added. Emphasising on affordable housing, Mishra said the highest housing demand is in economically weaker section (EWS) and low-income group (LIG), and observed that the millennial also wants 2-3 BHK flats and not bungalows. Talking about the Central Vista Project, Mishra said the new Parliament building will be ready next year. He also rubbished criticism about this project. At the outset, NAREDCO President Niranjan Hiranandani said the construction activities have slowed down because of the second wave, as only 50 per cent labourers are working on sites. He demanded that timeline for completion of projects should be extended as it was done last year. NAREDCO Chairman Rajeev Talwar said all permission related to the development of projects should be valid till March 2023. Tata Housing MD and CEO Sanjay Dutt expressed concern about the abnormal price rise in cement and steel. He said steel prices have more than doubled while cement rates have gone up by 50-70 per cent in the past one year. Dutt also pitched for reintroduction of subvention scheme, under which builders agree to pay EMI on the behalf of homebuyers for a certain period. Neel Raheja of K Raheja group put forward demand related to commercial real estate and sought inputbtax credit benefit. Rajan Bandelkar from Naredco Maharashtra said the second wave has more impact on the sector than the last year's first wave. He demanded extension of timeline for project completion by 6-9 months as well as suspension of insolvency laws for some period. Ashok Mohanani, president of NAREDCO Maharashtra, was also present in the meeting. NAREDCO is one of the leading associations for the real estate sector with around 5,000 members.Follow and connect with us on Twitter, Facebook, Linkedin
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Pune real estate sector in need of government intervention

View: Pune real estate sector in need of government interventionWhile things are not as bad as initially feared, the Indian real estate sector has suffered greatly from the COVID-19 pandemic. Pune was no exception - like other cities, Pune also saw a complete halt in construction activity during the first pandemic lockdown period.After the relaxations, we did see construction activity pick pace gradually. In fact, many previously delayed projects were getting completed in the last year despite the pandemic.Even now, when cases are rising in the Pune Municipal Corporation (PMC) and Pimpri Chinchwad Municipal Corporation (PCMC) regions, the partial lockdown in Maharashtra allows at least construction activities where workers are present at the site.Large and medium-sized developers are able to take the necessary precautions at their sites, and can to some extent sustain their workers even during a slow construction period. However, smaller developers are in trouble - apart from lack of funds, smaller projects do not have enough space for labour camps.Spiralling Construction CostsIt is not just the lockdowns that are giving developers a hard time. Rising prices of cement and steel over the last one year have been a serious concern for developers. Developers have repeatedly sought the central government's intervention in the cartelization by cement and steel manufacturers which is leading to unchecked price hikes.The sudden and continuous upsurge in prices of steel, cement and other key raw materials used in construction has massively increased the overall construction cost for developers. This is a huge burden for all players - but again, it is the smaller, cash-starved builders who are most affected.Everyone Pays the PriceUnchecked construction costs ultimately impact project deliveries and result in stalled projects in many cases. This has negative consequences for all stakeholders. Developers are challenged to incorporate the additional construction costs without adding further to the burden of their customers. Homebuyers find property prices steadily going beyond their budget. And the government loses stamp duty and registration revenue which it can collect with better sales.We have already seen that government intervention can have very positive outcomes. The recent decision to keep the RR rates unchanged is much appreciated, but it was the limited-period stamp duty cut by the Maharashtra government which had boosted housing sales in PMC and PCMC significantly. Asking for an extension by few more months to keep the momentum going is perfectly justified.The current situation is extremely negative for real estate developers - not just in Pune, but across India. We earnestly hope that the government will consider supporting the sector much more.The real estate industry employs more than 40 million workers, supports more than 250 associated industries, and is a major contributor to India’s overall economic growth.Moreover, housing is a basic necessity and government intervention is very essential - especially in unprecedented times such as the pandemic.- By, Akash Pharande, Managing Director of Pharande Spaces
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3-5% price gap between ready and under-construction homes: Report

TNN / May 8, 2021, 23:58 ISTPune: A report on real estate prices for ready-to-move (RTM) and under-construction (UC) homes by consultancy firm Anarock has revealed that the gap between the prices for both has shrunk to around 3-5% in 2021 against up to 12% in some markets in 2017.UC homes generally attract lower rates than RTM homes across major real estate markets — the four metros, plus Pune, Bengaluru, and Hyderabad, the report said.In some markets, such as Pune and the Mumbai metropolitan region, RTM homes used to cost around 12% more per square feet than UC homes in 2017. By the first quarter of 2021, that gap has shrunk to 3% for the Mumbai metropolitan region and the National Capital Region, while the gap in Pune is slightly higher at 5%.“People are shifting more towards RTM homes these days as new homebuyers and investors are concerned about uncertainties in construction of new projects as well as projects stalling during construction,” said the head of a real estate major based in Pune.“The fact that RTM homes does not attract GST has been an added attraction, even the price gap between RTM and UC homes has eroded substantially - from 9-12% in 2017 to just 3-5% by Q1 2021. The shrunk price gap works well for end-users as well as investors. End-users can see what they buy and save rent by moving in immediately, while investors focused on steady rentals can start earning right away,” said Anuj Puri, chairman, Anarock.
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‘Big brands are cornering housing mkt’

Pune: A report by real estate consultancy Anarock has found that branded real estate projects, of major listed and unlisted players, are taking up a significant share in the housing market. The report said customer preferences shifting, and RERA seeking more compliances, played a major role in the shift awat from local, standalone players. The report said the share of listed and unlisted players in the real estate market across the top cities in India went from 17% in 2017 to to 40% in the first three quarters of the 2020-21 fiscal. Anarock added the shift started with notification of RERA. “After the roll-out of structural policies including RERA and GST, organized and branded players’ dominance has risen exponentially,” said Anuj Puri, chairman of Anarock. “While buying a home, customers expect and demand trust, transparency, as well as on-time delivery of their homes. RERA helped raise awareness for customers,” said Rohit Gera, MD of Gera Developers.
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