Homebuyer appeals to Lokayukta to take action against Housing Department for failing to respond to RERA complaints

A homebuyers has requested that the Lokayukta take action against the Housing Department for failing to respond to RERA complaints.

Shailesh Charati stated in his complaint that despite being notified by the authorities, the secretary, deputy secretary, and undersecretary of the Housing Department, in addition to the RERA member secretary, had not taken the necessary action to prevent illegal construction and sale of apartment units.

Charati explained that he had notified the RERA of an illegal apartment development in JP Nagar in April 2021. On the RERA website, he had stated that the promoter had misrepresented the building as a separate project but had withheld information about the litigation. He approached the department secretary to initiate action under Section 26 of the RERA Act after his complaint was disregarded by RERA.

In his objection to the Lokayukta, that's what charati expressed, notwithstanding five updates and over seven months after his grievance, the Lodging Division had neglected to make a move. " "This lack of action is assisting the chairman and K-RERA members in continuing their work without regard for the law and denying homebuyers justice," he added.

HOUSELIV REALTY

Rental hike hits Bengaluru home seekers houseliv Realty

 If you are looking to rent a property in Bengaluru this year, brace yourself for an unprecedented rental surge. After making a consistent recovery from the pandemic slump since March 2022, rents in the city are leaping forward. 

“I have seen a property at HRBR Layout in Kalyan Nagar, worth Rs 20,000 in rent being rented out at Rs 40,000,” said a RERA-licensed broker, who did not wish to be identified, adding that this is not an isolated case. “Landlords are greedy. It doesn’t mean properties are improving but demand is high and landlords are hiking rents,” he pointed out. 

A tenant from Whitefield who also wished to stay anonymous, agreed. When his two-year tenancy contract expired this year, he was faced with a 57% jump in his rent from Rs 14,000 to Rs 22,000, for his 1BHK home. Unable to afford it, he was compelled to seek refuge elsewhere in the area. 

“People who already paid a higher rent last year will not see this kind of 30-40% jump this year. People who are coming now, moving into a property which was either not occupied or occupied at lower rent will see a jump.

The Covid-19 pandemic exacerbated a demand-supply mismatch of housing units in India’s Silicon Valley, as restricted mobility disturbed construction cycles by six-eight months. On the other hand, with companies calling employees back to offices, demand for rental housing continues to grow, giving landlords the upper hand.

“In the last five years, demand has been way ahead of supply in the case of Bengaluru,” said Vivek Rathi, who heads research at property consultancy Knight Frank India. 

“The highest demand-supply mismatch is in Bengaluru and that is why the highest rent increase is also in here. Now, with offices opening up, people are returning to town leading to a greater tenancy demand, while supply has not kept up,” Garg argued.

A landlords’ market

From demanding resumes to income records, besides enormous deposits, email approvals for guests to stay over and other stringent curbs - Bengaluru’s landlords have turned rather infamous. 

To add to tenant woes, home owners are now blatantly demanding higher-than-listed rents, alongside listing different rental prices on multiple property tech platforms after receiving queries from interested tenants.

“Properties I went to look at within a day or two of being listed on online brokerage platforms were already booked. Landlords then openly proposed that I pay more to rent the property,” attested Harsh Vitra, an engineer from Mumbai who moved into the city last month. “I was also grilled with multiple questions on topics ranging from my religion to caste, eating habits and if I planned on bringing female companions home,” he added.

Any end in sight?

Industry veterans gauge it could be three to four years before supply begins to inch closer to demand levels, thereby cooling rent inflation for residential properties in the city. 

While construction costs are moderating, interest rates remain elevated, which is prompting both parties - developers and buyers - to adopt a cautious approach, explained Rathi. Furthermore, any project undertaken today must navigate an average construction cycle of three to five years before completion, he added. 

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BIGGEST HOUSING BOOM IN 15 YEARS HOUSELIV

The housing sector in India has been witnessing a significant boom in recent times, with various factors contributing to the growth. A Capital Advisors firm in the country has reported that this boom is probably the largest in the last 15 years. The firm’s Managing Director and CEO, Vipul Roongta, has attributed this growth to factors such as affordability and the aspiration of customers to own homes.

Roongta also noted that the residential real estate market has revived strongly after undergoing significant pain due to the new realty law RERA and demonetisation. The accountability enforced by RERA, which holds developers accountable for completing projects and can result in imprisonment for defaulters, has been a significant contributor to the sector’s revival.

To cater to the growing demand for affordable housing, the firm has launched a $3.2 billion real estate fund. 85 per cent of the capital has already been committed. Last year, housing sales in India reached an all-time high of nearly 3.65 lakh units across seven major cities, according to property consultant Anarock.

Kuldip Narayan, Joint Secretary, Union Ministry of Housing and Urban Affairs, said the size of the urban sector will double in the next 25 years.

He said the requirements for facilities, residential spaces, commercial spaces, and urban infrastructure would double.

“With increasing urbanisation from 12 to 30 per cent, the next 20 years could see more development than in the last 50 years,” he said.

Narayan also alluded to the government’s emphasis on changes in construction technologies highlighting the government’s “consistent stand on reducing carbon emissions and improving energy efficiency” and encouraging the industry to “adopt better and resource-efficient construction technology”.

Raj Menda, joint chairman at  FICCI Real Estate Committee and Corporate chairman at a real estate firm, said, “After consecutive years of slowdown in the sector, last year witnessed unprecedented growth by reaching a new historical height in the commercial office segment”.

He added the extraordinary demand for flex space from medium and large enterprises further propelled the sector’s growth.

Arun Chawla, director general at FICCI, said, “With an increase in urbanisation and household incomes, the demand for residential real estate has seen an unprecedented surge. As a result, India is now among the top 10 price-appreciating housing markets internationally.”

In conclusion, the housing sector in India is experiencing a significant boom, and the demand for affordable and mid-income housing remains strong. The government and private sector are working towards meeting the demand and providing the necessary infrastructure to support this growth.

HOUSELIV REALTY

BDA cancels Rs 670-crore layout tender Houseliv

The Bangalore Development Authority (BDA) has finally cancelled the controversial Rs 670-crore tender that was called for the electrical works at the Dr Shivaram Karanth Layout. 

According to the notification published by BDA on March 10, the tender was cancelled “due to administrative reasons”.

While the BDA called for the tenders on February 24, on February 27, had reported that the BDA had floated the tender without seeking approval of the State Pre-Tender Scrutiny Committee, which came into force following “40 per cent commission” allegations in June last year.

The Committee, headed by Justice Rathnakala, had also flagged the issue to the state government and a report on the same was carried in  on March 10. 

It had also expressed concerns over such actions and said that they had derailed the purpose of the committee. 

Real Estate Bengaluru

Property prices going up on Bengaluru periphery

With an increase in post-pandemic demand, property prices in the peripheral areas of the city have gone up significantly.

Realtors say prices have gone up by up to 20 per cent since 2018-19. In Mahadevapura, for instance, land price has gone up from Rs 5,000-Rs 6,000 per sq ft in 2018-19 to Rs 8,000 now. Similarly, in Yelahanka, it has gone up from Rs 8,000 to Rs 11,000.

The pandemic had changed the way people were looking at housing. “Work from home and e-schooling saw many homebuyers shift to the peripheral areas for bigger homes and a better lifestyle,” said Ashish Sharma, city head of a real estate group.

Wider roads and better amenities in some of the newly-developed layouts are encouraging people to shift to peripheral areas, said a realtor from R R Nagar.

“People have realised that there is a need to decongest the core areas. Wider roads, better traffic, and a shorter commute to work have been driving the idea,” said Balamurali Krishna from a real estate agency in the neighbourhood.

Since many IT companies have asked employees to return to office, many youngsters are now looking to buy properties close to the workplace. That is the reason for a rise in demand in Mahadevapura and surrounding areas. Realtors say they have seen a spurt in enquiries over the last six months.

“With people returning to the city, rents have also gone up drastically. This has pushed many youngsters to look out to buy their own properties,” said Suresh Hari, chairman of The Confederation of Real Estate Developers’ Association of India Credai , Bengaluru.

While in areas surrounding RR Nagar, the Bangalore-Mysuru expressway and Namma Metro connectivity have fuelled development. In areas around Mahadevapura, the return to office and progress in metro connectivity have helped. “As metro connectivity became a reality, property prices started shooting up in areas surrounding Mahadevapura,” said Nagendra, who runs a real estate agency. A rise in the prices of construction material has forced prices up though. “From steel to cement, prices of everything have gone up and this has pushed up property prices,” he said.

Though the demand has gone up, not many are keen on selling the properties and this has caused a supply deficit, some experts said. 

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MC Explains: How will Delhi-NCR construction ban affect the real estate sector?

Amid deteriorating air quality in Delhi-NCR the Commission for Air Quality Management (CAQM) has agreed to adopt actions under Stage III of the Graded Response Action Plan (GRAP), including a ban on all construction and demolition activities.

Developers say it will significantly delay upcoming projects while inflating costs across the board, leaving homebuyers in a lurch amid high loan interest rates. However, experts say this will be a lesson learnt for the real estate sector in India. We decode how the move will impact the real estate sector.

The Ministry of Environment, Forests and Climate Change notified GRAP for the first time in January 2017. The Central Pollution Control Board's strategy, which was filed in November 2016, served as the basis for this.

Grap  is an emergency response system that will be put into action when air pollution levels reach a certain point. When the AQI is in the "poor" category (201 to 300), Stage 1 of GRAP is activated. The second, third and fourth stages are to be put in place three days ahead of the AQI reaching the ‘very poor’ category (301 to 400), the ‘severe’ category (401 to 450) and ‘severe +’ category (above 450).

Under GRAP Stage III, all construction and demolition activities are prohibited, except for those necessary for ensuring national security, defence, healthcare, and the development of railways, airports, metro rail, interstate bus terminals, roads, flyovers and other structures. Additionally, mining won't be permitted in the area.

On October 27, the air quality index was 354, on October 26 it was 271 AQI, on October 25 it was 302 AQI, and on October 24, the Diwali day, it was 312 AQI.

The CAQM order on October 29 said, "As per the dynamic model and weather/ meteorological forecast, the overall air quality over Delhi is likely to remain in the Very Poor to Severe category from October 29 to October 30. The air quality is likely to deteriorate and remain in a Severe category from October 31 to November 1 and for the subsequent six days, the air quality is likely to fluctuate between the Severe to Very Poor category."

Due to unfavourable meteorological conditions with slower wind speed and sudden spike in the farm fire incidents, it was considered necessary to implement Stage III of GRAP with immediate effect in the entire NCR, the order added.

How will it affect the real estate sector?

The recent decision on a complete ban on most construction activities might lead to a surge in apartment costs, Amit Goenka, managing director (MD) and chief executive officer (CEO) at Nisus Finance says. "The decision will certainly impact the bottom line of developers but may lead to a price increase as expected supply does not meet current demand. And costs for developers to become compliant with the regulations may have to be factored in going forward," Goenka said.

Additionally, losses incurred during this phase may get passed on to consumers as the builders will try to recoup lost interest costs, he added.

Noida-based Realtor Surendra Khariya said, "Last year when the construction halted due to similar reasons, the projects were delayed for two-three months."

Manoj Gaur, President, Confederation of Real Estate Developers' Association of India (CREDAI) NCR and chairman and managing director, Gaur Group, said the construction ban causes even non-polluting sites to stop work and the workers may leave the city fearing an extended ban. "And by the time, the workers are called back and the construction restarts, already several months will have passed. At that juncture, several prospective homebuyers consider their decisions to buy the project," Khariya added.

As per ANAROCK research, there are over 4 lakh homes under different stages of construction in the Delhi-NCRregion. The impact of a ban on all construction activity in these areas can delay the projects for three-four months.

What solutions do developers offer to tide over the issue?

Developers note that pollution is a growing problem and should be dealt with holistically. Especially in Delhi-NCR, the source of pollution comes from the construction sector as well as from stubble burning and other emissions.

Gaurav Gupta, secretary, CREDAI NCR told Moneycontrol, "In the end, it is the homebuyers who need to wait or pay more money. Mitigating measures like anti-smog guns and windbreakers are being increasingly used to prevent pollution due to construction activities."

Previously, CREDAI NCR had written a letter to Real Estate Regulatory Authority (UP RERA) and Delhi RERA, asking the authorities to include RERA-registered projects in the exempted category lists. Gupta said they are still awaiting a response from the government bodies.

However, Ritesh Mehta, director, JLL, said the exemption or the construction ban cannot be a solution to tackle the problem. "We need to regulate the construction sector and set up committees, even among the developers, to come to a holistic solution together. If done 2-3 years back, today we would have policies and solutions to tackle the recurring problem, especially in Noida," Mehta said. Minimum parameters need to be set to developers today, he added.

Gupta said more than 50 percent of developers in the NCR-Delhi region have started following safer technologies like aluminium formwork construction and pre-fabrication construction techniques that are safer and considerably reduce air pollution.

UP RERA could not be reached for comments.

What do environmentalists say about the construction ban?

The real estate sector is already aware, environmentalists say. Dr T V Ramachandra, a scientist at the Indian Institute of Science, reiterated India needs core policy changes in its construction sector to solve this problem. "Several European countries have tackled this problem using special monitoring devices and site controls," he added.

A research paper from World Resources Institute (WRI) mention several measures that can be taken up for clean construction. "If clean construction methodologies and measures are quantified, and the construction sector chooses to consciously pursue them based on true evidence, blanket restrictions will prove redundant," the research says.

Another Switzerland-based journal mentions, "Optimised construction processes, healthier materials and international agreements and policies such as the Sustainable Development Goals (SDGs) can support the sustainable development of the construction industry across the globe."

Akash Vashisht, a National Green Tribunal (NGT) lawyer, said, "The larger public interest is in improving the quality of the air. At this point, there must be a balance between the builder and the homebuyers, in the case of delays due to halted construction. Additionally, it must not be seen as a setback but should set a precedent for the real estate sector in India."

Experts say today the developers are already aware -- what lacks is the implementation of the policies and are integrating modern-day technologies. "Though GRAP is solving the problems over a short time, we need stringent implementation of the policies, especially in real estate, to have a larger impact on the environment," Vikrant Tongad, another environmentalist added.

Team Houseliv Realty

Real Estate: Office Space Leasing Jumps 26% To 13 Million Sq Ft During September 2022 Quarter Houseliv

Office space leasing in India during the September 2022 quarter stood at 13 million square feet (msf), a 26 per cent jump as compared to the corresponding quarter last year. Vacancy levels declined 30 basis points to 16.7 per cent and the demand is likely to cross 50 msf by the end of the year led by pent-up demand, according to a report by Colliers.

“Industrial and warehousing demand stood at 6.7 msf in Q3 2022, highest since Q1 2021. Delhi-NCR accounted for the highest share at 56 per cent, followed by Pune at 16 per cent share. 3PL operators continue to drive demand with 42 per cent leasing share," said the report, titled ‘reQ Real Estate Quarterly Q3 2022’.

Institutional Investments in the Indian real estate market closed at $1 billion during the third quarter of 2022, a 54 per cent jump YoY. The investment volume in 2022 is likely to cross 2021 levels amid the positive business sentiment. 

Several banks have raised their lending rates following the RBI’s repo rate hike. However, improved business confidence and retail spending during the festive season will likely support the demand activity, the report said.

Ramesh Nair, CEO (India) and managing director (market development-Asia) of Colliers, said, “The Indian Real Estate sector has bounced back sooner than expected if the first nine months of 2022 are anything to go by. Office demand has witnessed a twofold rise YoY during YTD 2022 at 40.6 mn sq feet and is likely to cross 50 mn sq ft towards the year-end. However, concerns about the upcoming global recession might trigger some short-term volatility in the market over the next 2-3 quarters. At the same time, the Indian market is relatively resilient and the growing economy will continue to fuel demand across various asset classes."

The report said real estate due diligence can capture a slice of the 300 mn sqft pie of existing and upcoming commercial office buildings. The top-six cities in India have about 120 mn sqft of ageing Grade-A stock, which is more than 15 years old. Due Diligence can help developers and landlords understand the scope of upgradation and achieve higher traction from occupiers, especially in the prime micro-markets of major cities.

“Modern technologies at workplaces can improve operational efficiency as well as employee productivity. Such an investment can reap remarkable benefits and returns for both, the landlord and occupier. They can look at minimum efficiency reporting value (MERV) filtration up to MERV 15 to improve and balance the air quality, and other recognised standards for acceptable IAQ and ventilation," Colliers said in the report.After a gap of two years, return to offices has gathered momentum with ebbing COVID-19 cases, signifying positive occupier confidence. At the same time, about 74 per cent of the occupiers are looking towards distributed workspacesworkspaces as a strategy to shift from location-centric to people-centric workspaces.

Team Houseliv Realty