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Supreme Court refuses to hear real estate firm’s plea against National Green Tribunal’s order

Comments Off on Supreme Court refuses to hear real estate firm’s plea against National Green Tribunal’s order   |  June 13, 2014

NEW DELHI: The Supreme Court on Tuesday refused to entertain a plea of real estate firm Jaypee Infratech seeking a direction to Noida Authority to grant completion certificate to its projects which fall within 10km radius of a bird sanctuary.

A bench of justices J S Kehar and C Naggapan said, “Let the central government take a decision on this issue” and dismissed the plea of the firm which was filed against interim orders of the National Green Tribunal (NGT).”

Senior advocate A M Singhvi, appearing for the firm, said around 4,000 flats are ready for hand over and a great humanitarian problem will arise if completion certificates are not issued by Noida Authority as it will lead to denial of possession to homes buyers who have almost paid 95 per cent of sale consideration.

The NGT, on October 28, 2013, had issued interim direction saying “all the building constructions made within 10 km radius of the Okhla Bird Sanctuary or within distance of eco-sensitive zone as may be prescribed by the notification issued by the MoEF shall be subject to the decision of the National Board of Wild Life (NBWL) and till the time the clearance of NBWL is obtained, the authority concerned shall not issue completion certificates to projects.”

Later, the tribunal did not entertain a review plea seeking modification of the earlier impugned order.

The real estate firm said the NGT relied on a Supreme Court order and “completely misread the order” to mean that the apex court had “enforced/implemented the 10 KM eco- sensitive zone”.

The NGT order restrained the authorities from issuing completion certificates for the buildings, constructed within 10 km from the boundary of bird sanctuary, as they fell under the eco-sensitive zone, it said.

The orders adversely affected projects, which were started in 2008, after the grant of environment clearance (EC) by the ministry of environment and forests in 2007.

The firm is developing an integrated township in Noida spread over 1072 acres and it comprises flats, apartments, plots, houses, schools, recreational, commercial and medical facilities, the plea said.

Source: TOI

Noida builders unable to hand over completed homes as National Green Tribunal stops delivery

Comments Off on Noida builders unable to hand over completed homes as National Green Tribunal stops delivery   |  June 11, 2014

NEW DELHI: Builders in Noida are unable to hand over more than 30,000 completed homes to their buyers, because of a National Green Tribunal order forbidding the Noida Authority from giving completion certificates to projects within a 10-kilometre radius of the Okhla bird sanctuary.

Developers in Noida say they have in the past seven months since the tribunal’s order lost close to Rs 1,000 crore as they have been holding on the flats, paying interest on their loans as well as penalty to home buyers.

“Everyone is bleeding,” said Vineet Gupta, director of the Ajnara group, which has around 1,500 apartments waiting to be handed over to buyers. Projects of more than 45 developers including Jaypee, Amrapali, ATS, Logix and Ajnara have been impacted, with buyers demanding penalty from them for the delay.

“When the state government has recommended 100 metres around the sanctuary as the eco-sensitive zone then why doesn’t NGT (National Green Tribunal) allow the authority to give us completion certificates,” asks Getambar Anand, managing director of ATS Infrastructure and also the president of the Confederation of Real Estate Developers Association of India (Credai).

“Such a lot of stock has been put at jeopardy because of the decision, notwithstanding the fact that all of us have environment clearances for our projects.” A senior executive at Amrapali Developers said the company has 5,000 apartments ready for possession but it can’t offer physical possession to buyers. “We have sent them intimation for possession sometime back but we can’t give them their homes,” he said, not wanting to be named.

Real-estate developers have been facing a liquidity crunch over the past 12 to 18 months because of a slow economy and the consequent weak sales of apartments. According to property research firm Liases Foras, in the December quarter, unsold inventory rose to about 650,000 apartments, which would take more than 30 months to be sold. That number went up to 700,000 by the end of March 2014.

The situation in Noida puts further pressure on the stressed balance sheets of many developers operating in the area. “There is so much confusion even around how to measure the 10-kilometre radius. No one in Noida is getting completion certificates whether they think they are in the zone or not,” said Ajnara group’s Gupta. Some developers say it has become difficult to launch new projects.

“We are finding it difficult to launch new projects in the vicinity of the sanctuary because investors and banks are reluctant to fund such projects till there is clarity on the matter,” said Shakti Nath, managing director of the Logix group, which has put three of its mixed-use projects on the backburner due to the issue.

In October last year, the tribunal had directed the Noida Authority to stop all construction activity within 10 kilometres of the sanctuary and asked the central government to fix the rules on the distance to be kept for such developments from wildlife sanctuaries.

The Centre then asked state governments to suggest rules for sanctuaries depending on how fragile they were. In February this year, the Uttar Pradesh government sent its recommendation for deeming 100 metres as the eco-sensitive zone. “We should be given instructions about who to go to rather than dealing with multiple authorities,” said Anand of ATS Infrastructure.

Source: ET Bureau by Ravi Teja Sharma,

A New Era Of Infrastructure-Driven Real Estate

Comments Off on A New Era Of Infrastructure-Driven Real Estate   |  June 7, 2014

New Delhi: With the BJP now elected into power, there are high expectations for the Indian infrastructure industry to take off in all earnestness. This is a very important development for real estate, since the sector cannot grow without the implementation of modern infrastructure projects.

The state of infrastructure of a country is a direct indicator of how well its urban systems work. Also, all activity that is related to industries, business, professions or indeed any activity that contributes to the sustenance of cities and individuals depends on how well the infrastructure system works. However, the problem that India has so far been facing on the infrastructure front is far more complex than it seems at first glance.

Urban infrastructure is obviously not a singular concept. It includes various services and facilities like roads, water and electricity supply, waste disposal, healthcare and education services, communications, etc. But in a country like India, housing must also be seen as an integral part of the infrastructure. All infrastructure is basically geared towards making a city more inhabitable and economically viable. But without sufficient housing to accommodate the very people that infrastructure is meant to serve, the entire concept becomes hollow and meaningless.

This is the reason why the Indian real estate industry has for so long been campaigning for being declared as an industry rather than a mere business vertical. It is also the reason why housing in India needs to be given infrastructure status. The Indian real estate industry is depending heavily on the new government to make these extremely important changes and allow the sector to grow on the back of the corresponding incentives to developers and buyers.

It is also important that the numerous infrastructure projects that have been pending because of mercenary bureaucratic tangles be either launched or completed in the shortest possible time. There has never been a lack of funding for these projects. At various points in time, bilateral and multilateral agencies such as the KFW, the Asian Development Bank, the World Bank and the International Monetary Fund have offered to back infrastructure projects in India.

However, what has been missing is effective deployment of such funds. This calls a firm consensus at the political and policy-making levels, which have been notably absent from the picture so far. Also, the proof of effective policy reforms lies in their implementation, not in their drafting. Therefore, the challenge for the new government lies in bringing about a width and depth in infrastructure-related policies, markets and economic milieu that allow the optimal utilization of available funds at the State level.

Since its mandate on these issues is non-ambiguous and decisive, we have every reason to believe that the new government will address the problems related to infrastructure in the country, and that we will be seeing encouraging developments on this front in the future.

(Source: Indiatvnews, Kishor Pate, CMD – Amit Enterprises Housing Ltd)

What A Government That Means Business Can Do For Real Estate

Comments Off on What A Government That Means Business Can Do For Real Estate   |  June 7, 2014

The dust has settled on the elections drama and the BJP is now firmly in the driver’s seat. By and large, this is being seen as the best possible news for the Indian real estate sector – and rightly so. Narendra Modi has the business mind-set, background and also determination which are called for to bring India’s entire economy back on track. What the real estate sector now awaits is his policy approach to the issue of housing in India.

Now, as the country stands poised on the verge of a major change in economic climate, it is a good time to reflect on why boosting the housing sector is so important for the country. Economists typically measure economic health on various different parameters, including Gross Domestic Product (GDP), the momentum of the manufacturing sector, inflation rate, etc. However, in India, the appetite for home ownership can and must be included as an important variable.

The health of the economy influences people’s desire to either invest or hold on to their money. Since real estate is an investable asset class, forward momentum in the real estate sector depends heavily on economic climate. In fact, real estate is also a priority investment route in India, because the desire to own homes is extremely high in this country. It is also an extremely important vertical from an economic viewpoint, because the transacting of real estate generates massive revenue for the government. This revenue can, in turn, be used for the creation of infrastructure, reducing national debt and generally uplifting the country.

These aspects are extremely important from the point of view of the country’s ability to attract more investments from abroad. The Modi government is quite aware of this fact, and – in the interest of overall economic growth – is likely to remove all or most of the policy roadblocks that have been preventing the velocity of the housing sector in India.

This process will involve better incentives towards first-time home ownership, quicker approvals for residential projects, a sharp focus on the creation of affordable housing, boosting rental housing schemes, unlocking government-held land for development, putting infrastructure creation on the fast lane, and many more initiatives that the previous government had failed to address.

At the citizen level, these changes are going to bring very tangible positive benefits. With the increased viability of home ownership, more and more people will finally be able to live in self-owned rather than rented homes. Home ownership is not only a matter of pride and financial security, but is also an important fulcrum for social change.

People who live in self-owned homes are more responsible citizens – they are personally invested into their neighborhoods, become actively involved in maintaining law and order and generally see themselves as stakeholders rather than detached audience members. Such citizens tend to join hands with the government as agents of even greater change at all levels.

The effect that the policies and actions of a government which is dedicated to boosting the economy with real estate as an important card in the deck can have at a city, state and finally national level must not be under-estimated. We are now looking at the real possibility of a revival in the economy, the infrastructure, home ownership and interest by foreign companies who have been waiting to invest into India.

Apart from an increase in national pride, this can result in significantly reduced loss of valuable talent to other countries, meaning a sustained growth in home sales within the country. The increased attractiveness of real estate as an investment class will also result in a major revival of the second homes market.

Source: Indiatvnews By Arvind Jain

Hoping for a turnaround, realty brokers bet big on Narendra Modi government

Comments Off on Hoping for a turnaround, realty brokers bet big on Narendra Modi government   |  May 21, 2014

NEW DELHI: Since the election results were announced last week — handing out a clear mandate to the Narendra Modi-led BJP — real estate brokers across the country have been prodding buyers to book their dream homes fast, since with a stable government on the cards, builders could increase prices any time soon.

Business for thousands of brokers has been thin over the last year or so as negative sentiment engulfed the market and home sales tanked. Investors fled and genuine home buyers waited anxiously to see if a new stable government can infuse life into the economy.

“It might just be a case of brokers trying to perk up the market, riding on sentiments,” says Samir Jasuja, managing director of property research firm PropEquity.

Developers and industry experts say property prices are likely to remain stable, at least for the next few months till the industry measures up the new government’s policy and reform initiatives, which is good news for buyers. Developers are hoping that the new government would hasten the pace of granting approvals to projects and also get the Real Estate Regulation and Development Bill, which has been hanging fire for many months, passed.

“There’s abundant supply in the market and lots of options for buyers. But no immediate price increase is in the offing,” says Getambar Anand, managing director of ATS Infrastructure and also the president of the Confederation of Real Estate Developers Association of India (Credai).

Jasuja of PropEquity says prices will take some time to go up. “It won’t be a knee-jerk reaction from developers.”

With slowing home sales over the last year and a half, developers have been facing a liquidity crunch. Unsold inventory levels have risen dramatically. According to property research firm Liases Foras, in the December quarter, unsold inventory levels rose to about 650,000 apartments, which would take over 30 months to be sold. That number went up to 700,000 by the end of March 2014.

Selling off this huge number of unsold homes will be priority for developers, says Abhay Khemka of Gurgaon-based real estate brokerage firm Khemka Investments and Properties.

While there’s been no rush to buy homes, brokers are starting to get calls from end-users and investors alike. Khemka says he has heard from five of his investor clients in Gurgaon over the weekend.

“While some brokers might be trying to force the issue to increase their business, buyers also realise that developers are under stress. Those who have the money and can buy are starting to explore the market as sentiment improves,” he says.

Many buyers have been sitting on the fence for the past few quarters because of negativity in the market — a slow economy, nagging inflation, political uncertainty, a not-too-encouraging job scenario across sectors, high cost of homes and rising home loans. Now, with the stock market on the rise and the rupee strengthening, these fence sitters are also getting positive vibes.

Source: ET

NCR real estate hails polls surveys, hopes of market revival

Comments Off on NCR real estate hails polls surveys, hopes of market revival   |  May 17, 2014

NOIDA: Realtors and local players expect that the realty market, which offers thousands of jobs and a major contribution to the economy, will revive in a couple of months.

Real estate sector players said that with polls surveys, revival signing were visible. Indian stocks climbed to record highs just after exit polls. The players strongly believe that there would be control in price rise this will further help to reduce construction cost. Apart from that, companies and buyers who have been holding their decisions of investment for a longtime, will jump in the market.

Poll projections have floated a new wave of expectation in UP’s industrial and real estate sector. Experts believe that a clear mandate will lead to economic growth. They also believe that the market is sentimental and will respond very soon — possibly breach an all time high. Amit Gupta, MD, Orris Infrastructure said, “For the last few months the Indian real estate was witnessing major downslide. Even the results of four states assembly elections had left a positive impact on the Indian market. We are hopeful that the real estate market, which provides bread and butter to crores of people of this country, would be revived soon. There is no doubt that the mandate will pump the market. The positive sign will be visible in the coming days.”

Anil Mithas, CMD, Unnati Fortune Group said that positive sentiment was missing from the market, which is why some sectors were not doing well. With the functioning of the new government, the market will witness more growth and strength. “Real estate had started witnessing revival signings after four assembly polls last year in December and it’s the right time to buy property. Post elections, rates would go up and put burden on the buyer’s pocket. The poll surveys displayed by media houses are reflecting stable government,” Mithas said.

“For that last one-and-a-half decades no big industry has associated its name with Greater Noida and Ghaziabad, which is called the industrial hub of Uttar Pradesh. Credit goes to poor infrastructure, maligned law and order and ‘gunda and jungle raj’. We are sure that a clear mandate and stable government will impact the NCR region as well,” said Aditya Ghildiyal, president, AGNI (Association of Greater Noida industries).

Source: TOI

Property prices crash 30% as buyers hold on cash till election verdict

Comments Off on Property prices crash 30% as buyers hold on cash till election verdict   |  May 8, 2014

Not all asset classes have been on a bull run in anticipation of the election result on May 16, when votes will be counted. Stocks may have been surging over the past few months but the secondary residential market has been going the other way, according to anecdotal evidence and the data that’s available. Prices of tens of thousands of homes built by local builders and investors in the metros have crashed by as much as 20-30 per cent in the past one year, with their owners desperate to exit a market in which buyers seem to have completely disappeared.

Brokers are left with a lot of free time. Inside his tinted-glass offices in south Delhi’s Safdarjung Enclave, realtor Sunil Kapur holds up a list of 50 houses in the area that are for sale. Since there are no buyers, he’s been whiling away the time by surfing the Net or watching Narendra Modi and Rahul Gandhi on TV during the month-long election campaign. “There is no point… there are no buyers. Those who come by are also not interested to buy at these prices,” he said, as he winds up for lunch followed by an afternoon siesta, hoping that the situation will change dramatically after the election result is out.

Deepak Parekh, chairman of India’s largest mortgage lender HDFC, agreed: “The market is certainly soft today. Secondary sales have slowed down and prices in that segment have come down.” The number of unsold homes is rising, said Anshuman Magazine, managing director of property consultant CBRE South Asia. “The situation in the residential market is getting worse and piling inventory is mounting extra pressure on the investors’ holding capacity. This seems to be a good time to buy, but few buyers are convinced,” he said.

Stocks have been rising on the expectation that the Narendra Modiled BJP will be well-placed to form a stable government, but that assurance doesn’t seem to have enthused people to buy homes.

To be sure, economic confidence is yet to be restored with growth still down in the dumps and the possibility of a weak monsoon adding to the uncertainty amid the likelihood of inflation accelerating again, which could in turn mean rising interest rates as the central bank tries to clamp down on prices, putting pressure on mortgage rates.

“Income levels of people have not risen unlike an exceptional rise in property prices due to slowdown in the economy. Home buyers want to see a stable government and policy enacted to make informed decisions,” said Alexander Moore, chief executive officer at property brokerage firm LJ Hooker India.

Analysts also pointed to the overall negative sentiment because of uncertainty hanging over some real estate projects and deals that have got tangled up in court cases or are being cited in corruption allegations.

Most of the data for this report has been obtained from property consultants, who collate and share market data with the industry, and banks that usually compile information about new homes in micro-markets being constructed by organised builders.

“Prices had gone up too high to unrealistic levels in many markets. Now sellers are coming to more practical levels,” said RV Verma, chairman of the National Housing Bank. “Also, many people are under pressure to service their debts which is pushing them to sell their properties at a discount… Demand too has dropped, which is compounding the problem.”

In Mumbai’s Malad and Goregaon suburbs, where thousands of middle-class families stay, two-bedroom apartments that used to sell for Rs 1.5-1.7 crore six months ago are now available for Rs 1.2-1.3 crore. In Kandivali, Borivali, Malad, Bhandup, Mulund, Vikhroli, Thane and the Kharghar-Panvel belt prices have dropped over 20 per cent, local brokers said.

The situation is similar in the Capital. In south Delhi alone, more than 5,000 builder floors, bungalows and empty plots have remained unsold for the past several months.

In Safdarjung Enclave, plots selling at Rs 8 lakh a square yard a year ago are now available at Rs 5 lakh a sq yard. In tony Vasant Vihar, prices are down from Rs 10 lakh a sq yard to Rs 6 lakh per sq yard from a year ago.

In Kalkaji, an apartment built on a 200 sq yard plot is selling for Rs 2.75 crore, down from Rs 3.15 crore about eight months ago. These houses were built or rebuilt on 100-400 square yard plots, with investors either going solo or tying up with owners in a joint venture development. Had this money been invested in the stock market in October, the value would have gone up nearly 25 per cent by now.

The slowing economy, growing inflation, political uncertainty, a weak jobs scenario across sectors and the high cost of home loans kept most potential buyers away in 2013 and the first quarter of this year. This group is now expecting a further drop in prices, especially with the leading political parties promising to makes homes affordable. But this puts investors, who buy homes to flip them at higher prices, in a bind.

Unable to exit, their money is stuck. “The market is so squeezed for cash that sellers are desperate to find a way out. Their holding power is decreasing. On the other side, buyers are holding on to their cash. They want to see which way the election swings. If an unstable government comes, prices could go down further,” said a property consultant, who didn’t want to be named.

Property listings website MagicBricks added that sale listings have shrunk in the micro-markets of Delhi, Noida, Gurgaon, Bangalore and Mumbai in the past year by 35-65 per cent, indicating negative sentiment among sellers.

Kapur recalled a recent deal that he brokered in Gurgaon’s DLF Phase-II area. The seller dropped the price by 32 per cent as he needed the money in a week.

“His bank was sitting on his head. He was behind on a business loan repayment. He had to sell,” said Kapur. Mumbai property dealers are also feeling the pinch. “The market has dried up,” said Arun Lillaney of Raah Estate &Property Consultants, which operates in Mumbai’s western suburbs. “Everybody is expecting more correction and I hope it happens soon; at least deals will get going,” he said.

In Bangalore’s Richmond Town and Lavelle Road areas, secondary home prices are down 20-30 per cent. A 4,000 sq ft bungalow on Lavelle Road, which cost about Rs 14 crore a year ago is now available for Rs 9 crore.

A colonial bungalow in Richmond Town on a 2,400 sq ft plot is selling for Rs 3.6 crore, down from Rs 6 crore a year ago. Data for new homes and those on resale in markets such as south Delhi or Richmond Town are almost impossible to get as they are mostly catered to by small brokers. The association of realtors too does not keep tabs on these markets.

Yashwant Dalal, president of the Estate Agents Association in India, however, said sellers in these markets had toned down expectations given the price correction in new launches and under-construction projects around them. The primary market isn’t doing too well either.

According to data from property research firm Liases Foras, unsold inventory levels — new apartments built by organised developers — have risen to 7 lakh apartments in the March quarter from 6.5 lakh in the preceding three-month period.

“An oversupply situation in the primary market also impacts prices in the secondary segment,” said NHB’s Verma. Noida-based real estate agent Yogesh Juyal said buyers are not getting into market because they are hoping prices will fall further.

“They are waiting to see if this is the bottom or if it will slide further,” he said. A 350 sq metre plot in Noida’s Sector 51, which was originally quoted at Rs 5.25 crore, was recently sold for Rs 4.3 crore.

Source: ET

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