Plotted Developments Are Trending In The Southern Markets

Plotted developments not only offer flexibility and ease of designing homes based on your preferences, but also provide higher returns over the long term. Hence, the demand for independent homes in southern cities has accelerated over the last couple of years. Read on

In Southern India, land has re-emerged as a key investment asset class over the last few years. While the preference for plotted development has always been there among the local populace in southern cities, the pandemic accelerated the trend of owning plots, believe experts.  

What are the reasons for the increase in demand for plotted development? What are the factors one should keep in mind before making such an investment? Here are detailed insights.

The demand drivers
One of the key reasons for investors’ interest in plots are the higher returns observed in the last few years when compared to any residential apartment. According to a report released earlier this year, during 2018-2021, Hyderabad witnessed the most price appreciation in plots (clocking 21 per cent CAGR).

In Chennai,, the rates of residential plots grew at a CAGR of 18 per cent between 2018 and 2021, and the residential land prices in Bengaluru increased at a CAGR of 13 per cent in the same period.

“The steady rise in demand for plotted development can also be attributed to the following factors:

• With the influx of established developers, homebuyers are now more aware of the concept of plotted developments replete with world-class amenities that are at par with the offerings of several high-rise apartment communities;
• Since the pandemic, there has been a growing preference for developments with low-rise  independent homes, which are spacious;
• Earlier, plotted developments were far from urban centres and were looked upon as long term investments to capitalise on upcoming growth corridors;
• However, Grade-A developers with greater financial resources have started working on plotted developments in emerging markets closer to the city, attracting more potential buyers,” elaborates Praveer Gill, executive VP of one of India’s largest real estate development companies.

The pros and cons of the investment
Over the last few years, southern markets have become highly desirable residential destinations because of the burgeoning job market, robust growth in infrastructure, greater connectivity, and vibrant culture. 

“The affordability of plots in these cities is a key factor driving individuals towards investing in land, an ever-appreciating asset. The pandemic has underlined the need for an independent home with no shared corridors, elevators, stairways, and common spaces. Additionally, investing in plotted developments is highly lucrative because they offer unmatched customisation and flexibility to the buyer. Furthermore, an investor can also enter into a joint venture agreement under RERA with a real estate developer to build a residential or commercial development on these plots. Lastly, this asset class offers lucrative investment opportunities to individuals who rent their properties as vacation homes,” explains Gill.

While buying a plot provides customers with several advantages, there are also certain drawbacks associated with the investment.

“The risk of encroachment is quite high here as a project without fencing or security can be encroached easily. Besides, the tax benefit is available for buying a home; but no such provision is offered for interest paid on money borrowed for the purchase of land/plot. Also, while banks offer loans on homes, plots are considered riskier assets and banks show hesitancy in financing them readily unless purchased from government authority. Many a time, plotted developments also lack basic amenities such as proper approach road, water and electricity supply, and sewage,” mentions Shrinivas Rao, CEO-APAC, Vestian. 

Developers upbeat about this segment 
The pandemic has been a catalyst for changing customer behaviour and preferences. 

Today, homebuyer needs are defined by comfort, convenience, privacy, and security. Hence, developers are now focusing on reducing the demand-supply gap. 

“Consumers are willing to travel that extra mile for the independence from shared walls and the comfort of having luxury spaces like gardens, terraces, and foyers while being surrounded by the convenience of being in the city. The accelerated expansion of urban centres and infrastructure has significantly influenced this trend as well. Hence, more realty players are making a foray into this segment,” adds Gill. 

Developers are also actively venturing into plotted development projects as they provide a relatively better internal rate of return with limited risk.

“For developers, plotted development is a smart strategy to liquidate land banks for raising working capital. Another reason could be a quicker exit from the investment within a shorter time-frame as the project cycle of plotted development is shorter when compared with apartment projects,” says Rao.

In conclusion
The desire for bigger homes is taking precedence as people now seek enhanced and customised spaces. Also, buyers are open to relocating to the outskirts if they offer the right product in their budget.

Further, the location of the property is no longer a determinant, as many companies have embraced hybrid work culture in light of the pandemic; hence, experts believe that plotted developments would continue to account for a steady demand momentum going forward as well. 

Before you buy a plot, do your due-diligence. Here's how:

• Title of the land: One must do a thorough legal verification of the land title as there is a higher probability of litigation in comparison to apartments. There are various approvals and certificates (title deed, release certificate, EC, property tax receipts, etc.) by local authorities that need to be acquired. Hence, approach a lawyer and vet all the documents. Also, one must check and verify the land-use zone as per the city masterplan (whether it is for residential or commercial use);
• Locality check: Location coupled with easy connectivity to major areas are among the major factors that buyers must keep in mind while buying plots. In addition, buyers must do their research and see whether or not any major infrastructure project/s are coming up in and around the area. Infrastructure projects play a significant role in boosting the real estate prospects of an area and hence will enable one to get a high return on their investments. 
• Individual plots vs. those within gated communities: A property within a gated community will provide access to all the amenities similar to that offered by an apartment complex and would be more secure. In the case of independent plots, the risks are higher, especially in terms of safety and security and easy access to amenities.
• Financing a Plot:   It can sometimes be difficult to avail of loans for purchasing a plot when compared to apartments. Also, the criteria for availing of the land loan are different from that of an apartment. Besides, the loan-to-value (LTV) ratio is lower for land loans and there are also stricter terms and conditions laid down by the lender. Hence, one must verify the same with their lender.   Team Houseliv

Housing Becomes More Expensive, Mumbai Least Affordable, Says RBIAmong the four metro cities, Chennai

Among the four metro cities, Chennai and Delhi stood at the second and third positions in terms of least affordable cities.

Housing  affordability in the country has worsened over the past four years, according to a report by the Reserve Bank of India. The house price to income (HPTI) ratio - which indicates housing affordability - in 13 cities across the country increased from 56.1 in March 2015 to 61.5 in March 2019. Mumbai is the least affordable city, according to the RBI report. The house price to income ratio for Mumbai stood at 74.4 compared with 64.1 in March 2015. The overall increase for all 13 cities stood at 61.5 in March 2019, from 56.1 in March 2015, according to the report.

Among the four metro cities, Chennai and Delhi stood at the second and third positions in terms of least affordable cities - with HPTI ratios of 58.6 and 58.5 respectively -  while Kolkata emerged the most affordable city (HPTI ratio of 56.5).

The RBI's quarterly residential asset price monitoring survey, which was conducted in  Mumbai, Chennai, Delhi, Bengaluru  Kolkata, Pune, Jaipur, Chandigarh, Ahmedabad, Lucknow, Bhopal and Bhubaneswar, revealed that Bhubaneswar was the most affordable city in the country with the cheapest real estate.

The RBI report also highlighted that home loan eligibility, as measured by the EMI-to-income (ETI) ratio, remained relatively steady in the past two years. However, Mumbai, Pune and Ahmedabad recorded higher median ETI ratios compared to other cities.

The RBI report projected a worsening housing affordability going forward. 

Team Houseliv

Bengaluru: BBMP begins demolition of encroachments on Mahadevapura

 Bengaluru : Municipal Workers cleaning the Bellandur Lake following water logging due to rain, in Bengaluru on Wednesday. As per the BBMP data, there are 696 encroachments on rajakaluves in the city and majority of the encroachments have been identified in Mahadevapura. Following Chief Minister Basavaraj Bommai on Thursday ordering the clearing of encroachments on rajakaluves, the Bruhat Bengaluru Mahanagara Palike's bulldozers on Friday started demolishing compound walls, a security guard's cabin, makeshift homes and an illegal approach room of an apartment, according to a Deccan Herald report. The report further stated that the Mahadevapura zone, which is one of the worst flood-affected, has been quick to act against encroachers, while the remaining zones are yet to get cracking. 

As per the BBMP data, there are 696 encroachments on rajakaluves in the city and majority of the encroachments have been identified in Mahadevapura, West, Bommanahalli and Yelahanka zones, the Deccan Herald report said.

Additionally, according to News9, BBMP had reportedly identified 175 encroachments in the Mahadevapura area, "after #bengalururains, removal of encroachments begins. This is in #Mahadevapura. BBMP had reportedly identified 175 encroachments in the area. P.S. Revenue Minister @ R Ashok BJP had said encroachments would be removed "mercilessly". #News9SouthDesk @Bengaluru news

Meanwhile, amid losses incurred by heavy rains in Bengaluru, Karnataka Chief Minister Basavaraj Bommai said a decision has been taken to release ₹300 crore to deal with the current situation and the maintenance of basic infrastructure in the city, according to ANI report.

While earlier on Monday, the chief minister held a meeting with the Bangalore Water Supply & Sewerage Board BWSSB, deputy commissioners of 15 districts, and senior officials in regard to rain and floods in the state. Bommai said that the government has taken a decision to release ₹600 crores for the management of floods in Bengaluru and other districts. Bengaluru alone has been allocated 300 crores for the purpose. Bommai said that a central team will arrive in Bengaluru on Tuesday night, to study the rains and flood situation in the state. 

The Karnataka CM said that an alternative plan is being formulated for water supply in Bengaluru. Under it, 8000 borewells under the BWSSB would be restarted to supply water in disrupted areas. The government will also supply water through tankers to the areas with no borewells to prevent any disruption of water supply in Bengaluru, according tp ANI report.

He said that the area of Bengaluru got expanded due to the inclusion of 110 villages into the BBMP limits, which has also cropped up new problems. "We will remove encroachments of roads, canals, and rajakaluves and install the gates for waterholes. Infrastructure will be improved. Since the state capital has received the record rains in the shortest period they need to take it as a challenge and face it unitedly."

Team HOUSELIV

Co-living houses fast fill up as offices open Houseliv

 Co-Living  operators are witnessing an upsurge in demand from working couples following the reopening of offices, as couples look to avoid hassles such as brokerage, maintenance and managing domestic help that come with renting a home. According to operators, a large number of employees have returned to work in cities with the easing of the Covid-19 pandemic. While individuals don’t want to share space now and are booking single occupancy rooms, couples are looking for double occupancy rooms for the long term.  “Before Covid-19, young single professionals used to book co-living facilities, but now a majority of the demand is coming from couples who want all the facilities managed by an agency. Keeping in mind the increase in demand, we had to come up with a new vertical, Housr Homes, where we offer fully furnished and fully managed one, two and three BHK apartments for couples, small families and individuals,” said HOUSELIV REALTY .

 Free Property Site 

Housr has more than 55 properties with 5,000 beds in its portfolio in Gurgaon, Bengaluru, Hyderabad  and Pune .

The solo to shared ratio for the company has gone up to 85:15 from 65:35 before the pandemic.

Of the total occupants in a facility, 10-15% are couples, a number that was negligible before the pandemic, according to the company.

“There is an entire ecosystem involved when a couple goes for rented accommodation. People have seen the kind of hassles they have to face in case of a Covid-19-like situation. From food to laundry, everything is taken care of and the working couple can just focus on work.

Most of the operators are witnessing more than 90% occupancy and are planning to double the number of beds to meet the growing demand.

Clients are even ready to pay higher rents for privacy and social distancing as the pandemic lingers on to some extent, said co-living operators.

Shared accommodation providers are offering tech-enabled smart living with fully furnished and managed residences across prime properties close to working hubs and commercial spaces.

These are especially designed to cater to couples and individuals who are looking for hassle-free, fully furnished premium residences in prime locations with uninterrupted hi-speed Wi-Fi, laundry at their doorstep and professional housekeeping.

“The operators are ready to provide value-added services since the young population, whether they are single or married, doesn’t want to spend time on household chores. Hygiene has emerged as a key preference, and co-living operators are focusing on it on a portfolio scale,” said Abhishek Tripathi, co-founder, Settl, a co-living operator which operates in Bengaluru, Hyderabad and Gurgaon. “For couples, maintaining the same standard comes at a cost and that is the reason they prefer to stay at a co-living property close to the office.”

Every year, more than 20 million students and working professionals relocate across the country in search of a place to live. Almost 90% of the country’s student housing is unorganised and startups are hoping to fill the void with better facilities.

Tier-2 cities have also started to witness similar trends.

“The co-living segment is seeing good traction in smaller cities and trends like couples looking for managed space and more demand for single occupancy rooms can be seen here too,” said Houseliv Realty.

According to property consultants, Covid-19 has given the residential segment the opportunity to develop co-living, senior living, student housing and mixed-use developments while incorporating work-from-home and other lifestyle trends.

Property consultants said non-traditional forms of real estate assets such as data centres, healthcare,  life sciences educational institutions, senior living, co-living and student housing have become increasingly popular.

Best Real Estate Houseliv

Illegal constructions: BBMP issues guidelines to engineers

 Bengaluru Real Estate

The Bruhat Bengaluru Mahanagara Palike (BBMP) has informed the High Court that it has issued a detailed circular laying down the guidelines on the manner in which engineers concerned will have to act against unauthorised and illegal constructions in the city.

BBMP Chief Commissioner Tushar Girinath has issued the circular pursuant to the directions issued by the High Court in a matter pertaining to construction in deviation to building plan.

During the hearing in the matter, Justice R Nataraj had noticed that the bye-laws are flouted with impunity by the property owners as well as the engineers concerned responsible for implementation of the bye-laws. The court had further noticed that as per Section 321 (B) of the Karnataka Municipal Corporations (KMC) Act, 1976 and Section 252 of the BBMP Act, 2020, though the jurisdictional officers are to be held responsible, none of the engineers concerned conduct any inspection as provided under bye-law. The court had directed the chief commissioner BBMP to frame guidelines in this regard.

 The circular, issued on July 21, 2022, has stipulated guidelines for implementing Section 321 of the KMC Act and corresponding Section 248 of the BBMP Act, 2020. The affidavit filed by the chief commissioner also stated that if the in-charge officers failed in their duties in implementing the building bye-laws, penalty clause has also been included in the circular as per section 252 of the BBMP Act 2020. 

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The circular has detailed three types of deviations – a deviation/unauthorised construction carried out after obtaining plan sanction, but before obtaining possession certificate, a deviation/unauthorised construction carried out after obtaining possession certificate and lastly an unauthorised construction without obtaining any permission. The circular has in detail explained the responsibilities of different officers involved in the process to stop deviation of sanction plan, avoiding unauthorised construction and powers to initiate proceeding under Section 248 (1), (2), (3) and Section 356 (1), (2) of BBMP Act.

The guidelines require engineers to mark the building plinth line in the presence of owners/ representatives and upload the same with GPS coordinates along with the photographs. The engineers also have to undertake inspection within 60 days to check if the foundation work is as per the approved sketch and again have to upload with GPS coordinates along with the photographs within 30 days.

Justice R Nataraj has directed the chief commissioner BBMP to give publicity to the circular in Kannada and English newspapers within two weeks for the benefit of the general public.

HOUSELIV REALTY

Peripheral Ring Road: Is PRR Project That Is Critical To Decongesting Bengaluru Being Rendered Unviable By UPA-era Land Acquisition Law ?

Propties in Bengaluru

 According to an estimate by BDA , the land acquisition cost of the Bengaluru Peripheral Ring Road (PRR) will shoot by ₹14,000 crores if the compensation package is fixed as per Right to Fair Compensation and Transparency in Land Acquisition Act 2013.

The Karnataka State Pollution Control Board (KSPCB) on Wednesday (July 13) held another public hearing on the proposed Bengaluru Peripheral Ring Road (PRR).

The public hearing was held at B.R. Ambedkar Bhavan in Yelhanka amidst heavy police security. Objections over the environmental impact of the project, inadequate compensation and lack of citizen involvement in planning were raised during the hearing.

The BJP-led statement government is attempting to expedite the land acquisition process and launch the much-delayed infrastructure project that has been languishing for over a decade.

Chief Minister Basavaraj Bommai recently reiterated that his government is firmly committed to constructing the peripheral ring road despite massive cost escalation and land acquisition challenges. He added the tenders for the project will be floated soon.

In April this year, the Bangalore Development Authority (BDA), the nodal authority tasked with the responsibility for providing civil amenities for the metropolis, floated a global tender inviting construction infrastructure firms to submit bids to develop a greenfield 8-lane, 74 km PRR through a public-private partnership (PPP) on design, build, finance, operate and transfer model (PPP-DBFOT).

As per the tender terms, the winning concessionaire will get 50-year lease period for collection of the toll to recover the cost and then hand over the project to the State Government. The winning concessionaire would also be required to pay upfront part of the land-acquisition cost.

The BDA also notified the last date for submission of the bids as May 18 and the bid opening date as May 20.

In June, BDA decided to scrap the tender process and announced that it would issue a fresh one. The decision to scrap the tender was attributed to queries from potential investors who participated in the tender process, seeking clarification on the land acquisition cost.

Peripheral Ring Road (PRR) project

The PRR is planned as a 74 km stretch with a 100-meter-wide road. On completion, it will connect Tumakuru Road and Hosur Road via Hessaraghatta Road, Doddaballapur Road, Ballari Road, Hennur-Bagalur Road, Old Madras Road, Hoskote-Anekal Road, and Sarjapur Road. Along with NICE Road, which links Tumakuru Road and Hosur Road via the city’s northwestern, western and southwestern areas, Bengaluru will have a 116-km-long bypass on its periphery.

The proposed alignment of PRR will be located at an approximate radial distance of 17 km - 25 km from the city centre and is envisaged to be a bypass to the city for the long-distance personalised vehicles (cars and cabs) and commercial vehicles (trucks and LCVs).

The total land requirement for the project, which was initially estimated to be 733 hectares (1811.28 acres), was later revised to 1036.51 hectares (2561.27 acres) due to the change in length of PRR from 65.5 km to 74 km. The increase in length was due to realignment and inclusion of cloverleaf structures to integrate at Tumkur Road and Hosur Road with NICE road.

The project's total cost is Rs 14,934 crores, out of which Rs 9,318 crore is required for land acquisition and rehabilitation purposes, while the construction cost is estimated to be around Rs 5,600 crores. The state government has already provided administrative approval for the project. When originally conceptualised 15 years ago with the aim of decongesting Bengaluru and easing traffic, the project was estimated to be Rs 3,000 crore. But due to design, rapid urbanisation, and land acquisition challenges, the project could never take off despite repeated attempts.

The project is very significant to Bangalore city because it is expected to address serious traffic challenges. According to local authorities and the state government, Bengaluru needs PRR given the massive geographical expansion of the city to the current spread of 2196 sq km and explosive growth of vehicular ownership (2019 estimate - over 80 lakhs).

The ring road is also expected to provide massive economic benefits.

Bengaluru has been attempting to complete several large ring road projects to improve its city-region connectivity and alleviate traffic congestion. A Satellite Town Ring Road (STRR) is currently under construction.

Environmental Issues

The project has already received initial environmental clearance, which was required as it involves the diversion of 7.91 hectares (19.54 acres) of forest land in the Jarakabandekaval reserve forest.

Since the boundary of Bannerghatta National Park and Puttenahalli bird conservation reserve is located at a distance of 7.21 Km and 1.49 Km, respectively, additional approvals were required.

The proposed PRR alignment is close to Peenya Industrial Area and Jigani-Bommasandra Industrial Area, which are notified as severely polluted and critically polluted areas by CPCB.

As per the environmental impact assessment (EIA) done for the project, 36,824 trees will have to be uprooted for the project. At Thippagondanahalli reservoir, 20 km of the proposed road will be built and 13,355 trees will come in the way of the project. More than 630 trees have been identified in the Jarakabande Kaval reserve forest area.

Environmental groups also say that there are six lakes along the proposed road alignment, and construction will result in a significant loss of habitat for small mammals like squirrels and bats and birds like the Black kite, Brahminy kite, Common buzzard and the Indian peafowl. They argue that about 555 hectares (1,371 acres) of farmland will also be lost to the PRR.

BDA has proposed to mitigate the impact of the PRR on the environment by planting ten trees for every tree removed (a total of 3,38,380 trees to be plated). BDA has also undertaken to erect barriers on both sides of the road construction site to mitigate dust and air pollution. It has promised that no materials will be dropped from a height greater than 3 feet to minimise dust and that water will be sprinkled on the construction site at least three times a day.

Land Acquisition Challenges

A major legal hurdle for the project was cleared in Nov 2021 after the Supreme Court directed the Karnataka government and the Bangalore Development Authority to acquire the land for the formation of PRR and proceed to implement the project.

The SC permitted the project to go ahead in response to an affidavit filed by the Additional Chief Secretary, Government of Karnataka, Urban Development Department, Bengaluru.

Of the total land notified, government land consists of about 114.20 hectares, Kharab land consists 43.43 hectares and remaining private land is 555.57 hectares.

A section of land owners oppose BDA's proposal to compensate them under the BDA Act and have demanded compensation under the Right to Fair Compensation and Transparency in Land Acquisition Act 2013.

According to an estimate by BDA that was done in 2021, the land acquisition cost would shoot up by more than Rs 14,000 crores if the compensation package is fixed as per 2013 Act.

Even when the Congress-led United Progressive Alliance government passed the bill in 2013, the critics had pointed out that it would increase the cost of infrastructure dramatically.

While the National Democratic Alliance government attempted to dilute the law by ordinances etc, it abandoned the idea after opposition from allies and a lack of majority in the Rajya Sabha.

BDA and the state government may need to come up with some innovative funding ideas to resolve the problem.

Team HouseLiv Realty REAL ESTATE BENGALURU

ದುಬಾರಿಯಾಗ್ತಿದೆ ಹೊಸ ಮನೆ ಕಟ್ಟೋ ಕನಸು: ನಿಲ್ಲುತ್ತಲೇ ಇಲ್ಲ ನಿರ್ಮಾಣ ಉತ್ಪನ್ನಗಳ ಬೆಲೆ ಏರಿಕೆಯ ಓಟ

ಬೆಂಗಳೂರು: ರಷ್ಯಾ-ಉಕ್ರೇನ್ ಸಂಘರ್ಷದ (Russia Ukraine Crisis) ಪರಿಣಾಮ ಗೃಹ ನಿರ್ಮಾಣ ಚಟುವಟಿಕೆಗಳನ್ನೂ (Real Estate Industry) ಕಾಡುತ್ತಿದೆ. 2016ರಲ್ಲಿ ನೋಟು ಅಮಾನ್ಯೀಕರಣದ ನಂತರ ಕಳೆಗುಂದಿದ್ದ ರಿಯಲ್ ಎಸ್ಟೇಟ್ ವಲಯಕ್ಕೆ ಏಟಿನ ಮೇಲೆ ಏಟು ಬೀಳುತ್ತಿದ್ದು ಚೇತರಿಸಿಕೊಳ್ಳಲು ಅವಕಾಶವೇ ಸಿಗುತ್ತಿಲ್ಲ. ಕೊವಿಡ್ ಸಂಕಷ್ಟದಿಂದ ಕಂಗಾಲಾಗಿದ್ದ ಉದ್ಯಮ ಇದೀಗ ನಿರ್ಮಾಣ ಚಟುವಟಿಕೆಗಳಿಗೆ ಬಳಸುವ ಉತ್ಪನ್ನಗಳ ಬೆಲೆ ಏರಿಕೆಯಿಂದ ಕಂಗಾಲಾಗಿದೆ. ಏಪ್ರಿಲ್ 1ರಿಂದ ಆರಂಭವಾಗಲಿರುವ ಹೊಸ ಆರ್ಥಿಕ ವರ್ಷದಿಂದ ಬೆಲೆಗಳು ಇನ್ನಷ್ಟು ಪರಿಷ್ಕರಣೆಗೊಂಡು, ಹೆಚ್ಚಾಗಬಹುದು ಎಂದು ಮೂಲಗಳು ಹೇಳಿವೆ.

Team Houseliv 

REAL ESTATE BENGALURU