ANAROCK research reveals that as many as 220 projects equalling 1.74 lakh homes are completely stalled in the top 7 cities alone. Launched either in 2013 or before, these projects have absolutely no construction activity going on. The overall value of all stalled units is estimated to be more than INR 1,774 billion. Most of these projects have been grounded due to either liquidity issues or litigations.
Only a paltry number of developers have built housing that meets the Government’s criteria for incentivized affordable housing in 2019. ANAROCK data reveals that of the total housing supply of 1,39,490 units in the top 7 cities H1 2019, merely 39,840 units meet these criteria. The Government’s recent Budget ‘bonanza’ of an additional INR 1.5 lakh tax deduction on interest repayment of home loans availed till March 2020 will benefit very few people in urban India.
The Supreme Court of India categorically said on Tuesday, July 23, that serious fraud has been played by real estate firm Amrapali Group in connivance with Noida and Greater Noida authorities by failing to give possession of flats to over 42,000 home buyers.
The reasons for vacancy levels of homes which could feed the rental market across the country are largely region-specific. However, distorted property rights (in the absence of a sound rental policy), weak rental contract implementation and low rental yields are some of the major factors that prompt homeowners to leave their houses vacant rather than rent them out.
Without compromising on fiscal prudence, the Finance Ministry will have to present a budget that is not only inclusive but also assures growth across industries. It clearly shoulders a considerable share of responsibility for retaining India’s position as the fastest-growing economy.
The slowdown in Indian residential real estate over the last few years caused most high net-worth individuals (HNIs) to shun luxury housing and look at other investments within or outside real estate. However, ANAROCK’s latest study indicates that HNIs are now using the tail end of the slowdown in India’s luxury residential market to their advantage.
Let’s get straight into this question, which has been a concern among all stakeholders – financial planners, property owners, investors and prospective buyers – over the last few years. And only because real estate, particularly residential, did not yield the same returns as it did during its Golden Era of the early 2000s.
Jhumur Ghosh welcomed the panelists, following which Ravi Sinha questioned the global competitiveness of Indian real estate in the wake of thousands of abandoned projects waiting for the funds, the debt-equity ratio imbalance, lending issues, pre-launches without RERA sanctions, and the developers’ defending the indefensible.
Large foreign funds have expressed an interest to own a share of the Indian real estate pie. Nikko Am Straits Trading Asia, North Carolina Fund, Hwang Asia Pacific REITs and Infrastructure Fund, Eastspring Investments and Canada-based Sentry Global have received SEBI approval to invest in India as developers and real estate investors, revealing the underlying interest in REITs. Our research indicates that continuous institutional flow of funds has provided the initial momentum to REIT.
Lack of affordability in the larger cities is the primary hurdle to the largest investor base, and property investors are now looking at smaller towns and cities. However, their increasing bullishness on Tier 2 & 3 cities as against their tier 1 counterparts is not just on account of their relatively more affordable property prices, but also because of their better growth prospects.