Impact of China’s realty market on the Indian real estate

Investors in China are looking at the Indian market as it is emerging rapidly. This will in turn have a positive impact on the Indian real estate market. It is bound to have further growth as well. Increased consumer spending largely assists urbanisation with more focus on infrastructure. This paves way for demand for both residential and commercial properties. 

The Indian realty market is comparatively going strong. This is corroborated by facts. According to reliable reports, India is the second largest country for steel production after China. The collapse in the Chinese property market will also reduce commodity prices which will eventually benefit India. The Indian real estate market has a great opportunity at its doorstep since it has grown rapidly and has proven resilient in the last two years despite the global crisis. 

Ever since the pandemic, work-from-home opportunities have become a norm, the need for a roof over the head became more evident. Add to that the income levels are on the rise consistently. This will lead to an increase in domestic demand. Also, huge investments in infrastructure and rapid urbanisation are all leading to an increase in demand for buying homes. 

This is happening due to the reforms in the real estate sector. Post the pandemic, it was observed that the rates have been raised on high-end and luxury properties from individuals and Non-Resident Indians (NRI) having a much higher net-worth. Their purchasing power is probably connected to the nosedive of rupee value.

The urbanisation factor

While the Real Estate Market in India seems confident, it is significant to find the right balance between growth and sustainability, and know the difference between the two. The government has also taken note and are taking necessary measures to maintain equilibrium. The government’s focus on building highways and other infrastructure is leading to urbanisation. The increase in consumer spending has created a demand for both housing and commercial real estate in India. The government is also boosting the affordable housing segment that will give a fillip to the market sentiments and at the same time appeal to the affordable home category which has been in high demand for a while now. This will help in improving the market condition within a few years. To put it in a nutshell, as of now, the Indian realty sector appears to have a solid foothold. With these results, it seems unlikely that the industry is in, or headed for, a crisis. Having said that, a lot depends on the continuous upward progression of the Indian economy. The basic takeaway from the Chinese crisis is that Indian developers should reconsider business strategies to make the industry stronger by taking all the financial risks into consideration so that Indian realty markets can avoid China-like situations.

Houseliv Realty

Bangalore Real Estate

Nilekani family trust buys property in Bengaluru’s ‘Billionaire Street’ for Rs 59 crore.

NRJN Family Trust established by Nandan M Nilekani, co-founder and chairman of Infosys has bought a property in Bengaluru’s Billionaire Street Koramangala area for Rs 59 crore, documents accessed by Zapkey showed.

The property has a total built-up area of 4,200 sq ft and is situated on the 3rd Block of Koramangala Extension. The plot area is around 9,600 sq ft, the sale deed showed.

The NRJN Family Trust was represented by its corporate trustee Entrust Family Office Legal and Trusteeship Services Pvt Ltd. The deal was registered on September 26, 2022.

Nilekani and Rajmohan Krishnan, the authorised signatory on the sale deed, did not respond to queries sent by Moneycontrol.

In April this year, the NRJN Family Trust had bought a property for Rs 58 crore in the same area. The property was spread over 9,600 square feet and has a built-up area of 3,082 sq. ft.

Real estate brokers said that this is perhaps the most expensive deal in the area and that it is the prime location and the gentry residing in that area that makes it popular.

In May this year, the owner of Shankara Building Products Ltd,  Sukumar Srinivasan, bought two properties in Bengaluru’s posh Koramangala area for Rs 44.60 crore. Srinivas on March 21, 2022, offloaded over 10 lakh shares of the company for Rs 75 crore through an open market transaction. According to the block deal data on NSE, he had sold 10 lakh shares at an average price of Rs 755 apiece. This took the total deal value to Rs 75.50 crore.

Given the limited supply of plots and independent houses in this block in Koramangala, it has high demand from ultra-high net worth individuals, said real estate experts.

The trust is owned by Nilekani and his family. Nilekani was estimated by Forbes to have a net worth of $3 billion.

Koramangala’s 3rd Block is considered to be one of the richest enclaves in India’s IT capital, which is home to tech giants such as Infosys and Wipro, apart from startups.

Some of the country’s most successful entrepreneurs have homes in Koramangala 3rd Block, according to local brokers. Among them are Devi Prasad Shetty of Narayana Health and Flipkart founders Sachin Bansal and Binny Bansal.

Of the six blocks in the area, the 3rd Block is the most expensive because of the larger plot sizes and the fact that it is inhabited by billionaires, brokers said. Bungalows that are spread across 4,000 sq. ft. command a price of just about Rs 25,000 per sq. ft., they said.

In January,  Sriram Nadathur, son of Infosys co-founder NS Raghavan, sold a residential property in Koramangala 3rd Block for Rs 11.6 crore.

In August last year, Infosys co-founder Kris Gopalakrishnan bought two properties worth Rs 76 crore in the area.

The promoter of Bengaluru -based Quees Corp ought a bungalow spread across 9,507 sq. ft. in the Koramangala area for Rs 52 crore last year. Ajit Abraham Isaac bought the property from Brijesh R Wahi, a Singapore-based NRI. The cost of the property located in Koramangala Extension worked out to about Rs 58,000 per sq. ft.

Flipkart founder Sachin Bansal utilised the proceeds from the sale of his stake in the company to buy a 10,000 sq. ft. property in this area at the rate of Rs 45,000 per sq. ft. He had bought a property in the area for Rs 25,000 per sq. ft. in 2016.

Anesh Shetty, son of Narayana Health chairman Shetty, purchased an independent house worth Rs 18.57 crore in Koramangala in January last year.

Other high-profile deals in Koramangala in the past couple of years, as per documents accessed by Zapkey include those by NRJN Family Trust (Rs 39.8 crore in December 2019), Raja Bagmane (Rs 43.2 crore in November 2019), and Nilekani’s daughter Jhanavi (Rs 30 crore in December 2019).

Prestige Kingfisher Towers in Ashok Nagar witnessed some of the priciest property deals in Bengaluru, brokers in the area said.

In June 2020, Sudha Murthy, Sudha Murthy wife of Infosys founder NR Narayana Murthy, bought a property in this project for Rs 28 crore, according to documents shared by Zapkey.

Wait for basic amenities gets longer for Nada Prabhu Kempe Gowda Layout site allottees

Six years after securing site allotment at the Nada Prabhu KempeGowda Layout (NPKL), buyers are still waiting for basic amenities to begin constructing houses.

The month-on-month progress report given by the Bangalore Development Authority (BDA) has revealed that works at the layout has been stalling for months together.

Data accessed by DH revealed that not even a two-kilometre road has been constructed since May, while drains are built over a three-kilometre stretch in a layout sprawling over 2,650 acres.

“We hardly see any progress, and this has been the case for the last one-and-a-half years. This is a direct impact of the BDA’s inability to accurately assess and release funds to the contractors, according to the works taken up,” said A S Suryakiran from the Nadaprabhu Kempegowda Layout (NPKL) Open Forum.

Problems began two years ago following estimations by the contractor and the BDA engineers that the layout needs more funds to complete infrastructure works. A variation quantity of Rs 650 crore was estimated and a proposal was placed before the BDA board for approval.

“The works will not gather momentum without the approval of the variation quantity. Though the BDA’s internal technical review committee approved the variation, the assessment was further passed to a third-party company, which is yet to submit a final report even after seven months of survey,” Suryakiran added.

BDA officials, on the other hand, said the project was stalled due to Heavy Rains and continuous festivals.

“Though the variation quantity is still under discussion, contractors have been asked to proceed with the work planned according to the initial estimation,” said a senior BDA official.

“We have received initial report from the third party on the assessment. Once we receive the final report, the variation quantity will be released accordingly,” the official added.

Though the site allottees have approached the Real Estate Regulatory Authority (RERA) and the petition committee of the Assembly, work on the ground is yet to gather pace..

1Lakhs housing units remain unsold in Hyderabad Houseliv

HYDERABAD: With the realty sector turning expensive, many housing units are left unsold in Hyderabad.

The State capital has nearly one lakh unsold housing stock, which is the highest in south India.
According to a report by PropTiger, REA India-owned digital real estate transaction and advisory services platform, the unsold stock as of Q3 2022 stand at 99,090.

The city has an unsold inventory of 40 months and this is the second highest overhang among all cities after Delhi (62 months overhang). During Q2, the unsold stock was 82,000, which has now inched closer to one lakh in Q3.

Across the country, the overall unsold inventory in Q3 2022 stood at 7.85 lakh units, with Mumbai on top with 2.72 lakh units. There has been a decline in the inventory overhang in a few cities as the builders in a particular market are likely to take to sell off their unsold stock at the existing sales velocity.

 The realtors attributed the increase in unsold inventory to the rising cost of construction, registration charges and land rates to have gone up. This increased the cost of under-construction apartments and to-be-built houses. On the other hand, launches have been more in Hyderabad which is also one of the reasons for the high unsold inventory.

In Q3 2022, a total of 27,440 Housing units were launched, the second highest in the country after Mumbai (28,880 units). However, the sales are not able to match the launches as 10,570 housing units were sold in Q3.

The markets covered in the report include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai Metropolitan Region, Delhi-National Capital Region and Pune. Meanwhile, with the festive season in full swing, real estate developers are hopeful of the sector receiving a boost towards recovery, and their wishes are already coming true.

“The real estate industry is bouncing back from the pandemic and subsequent disruptions, and it’s evident from the data trends and insights in our report. Especially with the festive season which has just commenced, we’re experiencing a continuous surge in consumers’ positive sentiments towards property investments,” said Vikas Wadhawan, Group CFO, PropTiger.com, Housing.com, Houseliv.com  and Makaan.com.

KUMBALGODU FLYOVER OPENS TO PUBLIC TODAY

 Bengaluru's longest six-lane flyover is finally set to be open to the public. The Kumbalgodu Flyover  will help commuters skip the congestion in the area. According to Mysuru MP Pratap Simha, one arm of the flyover (Bidadi side) will be open to the public from Wednesday, and the other arm (Bengaluru side) will be opened by Dasara.

With the opening of this flyover, Bengaluru will have five elevated flyovers to bypass traffic on the at-grade level.

The longest elevated stretch in the city is the Electronic City expressway (9.985 km). Work for the project had started in 2006, and it was opened to motorists in 2010. This flyover has four lanes. The third-most elevated stretch in the city is the Peenya flyover (4.3 km), which is also a four-laned one.

The 4.5 km-long Kumbalgodu flyover is the longest six-lane flyover and second-most elevated stretch in the city.

The fourth-most elevated stretch in Bengaluru is the 3.722 km-long flyover that connects Esteem mall to Kogilu Cross on Kempegowda International Airport Road. This is the second longest six-lane flyover in the city.

The fifth-longest flyover in the city is a 3.35 km-long road-cum-rail flyover connecting Jayadeva Hospital junction and Central Silk Board. It is still under construction and being built by the Bangalore Metro Rail Corporation Limited (BMRCL)

Interestingly, the first flyover, as well as the first elevated stretch in the city, was built on the Mysuru Road. The 2.65 km-long flyover was built to connect Town Hall with Sirsi Circle, bypassing the busy KR Market in 1999.

“For long, the Bengaluru-Mysuru Road has been neglected even though the traffic has increased. Kumbalgodu, which was a suburb, has seen rapid growth in recent years, and as a result, there is a spurt in vehicular growth. This road definitely required a flyover as the long-distance vehicles (going beyond Bidadi) will have hassle-free movement while the local traffic near Kumbalgodu can use the road below the flyover,” said Manjunath, a resident of Kengeri.

 However, experts say that flyovers are not really helpful in solving traffic woes.

They say that flyovers essentially move the traffic from one side to another. “Instead of spending huge amounts on building flyovers, the government should invest in promoting public transport so that more and more people shift from their personal vehicles to public transport which will automatically decongest the busy stretches,” said Girish A, a resident of Raja Rajeshwari Nagar.

A flyover is being constructed to decongest RR Nagar junction. The RR Nagar entrance on the Mysuru Road is one of the major bottlenecks holding up traffic. Construction work has been taken up at a cost of Rs 71.45 crore.

HOUSELIV REALTY 

Registration of ancestral property without sale deed made easy in Tamil Nadu

 CHENNAI: People who need to register ancestral properties but unable to do so without original documents have a reason to cheer now. The Commercial Taxes and Registration Department has amended the registration rules under Registration Act 1908 by inserting Section 55A, which stipulates rules for registration of documents provided the sale deed is lost or ancestral document is untraceable.

The State government had earlier passed a circular in this regard and it has been made a legal statute now after including it in the Tamil Nadu government Gazette.Under the amendment, if a previous original deed is lost, the registering officer shall register it only on producing a non-traceable Certificate issued by the police, along with an advertisement published in the local newspaper as to the notice of loss of the previous original deed.

Similarly, if the previous original deed is not available as the property is an ancestral one, the registering officer shall not register such document, unless any revenue record is produced evidencing the applicant’s right over the subject property such as patta copy issued by Revenue Department or tax receipt.

The amendment to the property registration rules in Tamil Nadu also states that producing the previous original deed shall not be necessary where the government or a statutory body is the executant of the document or for such class of documents as may be notified by the Inspector General of Registration, from time to time.

The amended rule states that the registering officer after being satisfied that the description of the property contained in the document presented for registration conforms with the description of the property found in the previous original deed provided under this rule, they shall inscribe the word ‘verified’ on a conspicuous portion of the first page of such title deed and affix his signature with date and thereafter cause scanning of the page containing such inscription as a reference document.

In case revenue records are produced under this rule, the same shall be scanned as the main document and where non-traceable certificates and the advertisement published in the local newspaper are submitted by the applicant, they shall be scanned as reference documents.

In case, an encumbrance as to mortgage, orders on the attachment of property, sale agreement or lease agreement exist over the property, the registering officer shall not register such document if the time limit for filing of the suit has not lapsed or No Objection Certificate is not granted by the appropriate authority or raising of the attachment is not done.

A relief to many
The new clause stipulates rules for registration of documents provided the sale deed is lost or ancestral document is untraceable. 

HOUSELIV REALTY

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