The whole country was recently abuzz when the price of onions (one of the most essential staples of the Indian diet) rose above the price limit of ~100 per kg (that’s nearly $0.75 per pound) in the country’s capital and surrounding areas. The reasons for this were a crop affected by unseasonal rains and hoarding by suppliers and a few large farmers to create an artificial supply shortfall. This story finds a parallel in the country’s residential sector.
This sector is characterised by delays in project possession and healthy interest by investors who are not end-users but speculators looking for capital appreciation. There is a certain similarity between onions and the housing sector because both are commodities that fulfil an important need – providing food and shelter. In 2008-09, when housing demand was adversely impacted by the Global Financial Crisis and investors and end-users deserted the residential market, prices tumbled by over 30 per cent across different markets.
The subsequent revival in demand took place in 2010 and it was accompanied by a revival in price as well. Prices have risen by nearly 50 per cent from the market trough seen in 2009 and are trending at newer market peaks in most residential markets. The healthy buyer interest over the 2010-2012 period was the leading factor in driving prices upwards but this is not the case in 2013.
A major factor in the demand revival has been the active investor interest in the residential sector. In fact, in select cities and corridors such as Gurgaon in the National Capital Region, the investor momentum has managed to marginalise end-users, who are relatively risk-averse. By investing in projects that have partial approvals, the investors have taken away a large chunk of the upcoming residential supply and this has been motivation for developers to offer their thus limited stock to end-users at higher prices. This has started to happen more regularly and has made many residential corridors more speculation-driven.
Back to the onion analogy, over the years, onions have seen stable prices (prices have remained at Rs 22-32 per kg) as supply has been synchronised with demand. The wholesale market that hoards the commodity can be equated with the investors who keep end-users away from the market for short-term gains. Farmers – the onion producers who make a healthy profit in a short-supply scenario by selling at higher prices are analogous to developers who look to book returns from their projects by ensuring that buyer demand is always chasing lower availability.
The difference lies in the fact that the government intervened in the essential commodities market by importing onions to control price rises. No such method of control currently exists in the housing sector. Perhaps, beyond the normal income tax payable on house rent income (payable even for non-rented accommodation), some more punitive measures can be implemented to achieve better “price discovery” in the housing sector.
Weak absorption and rising inventories in the residential market here may lead to price correction in Mumbai in the early part of 2014, real estate consultancy firm Knight Frank said in a recent report.
Nearly 2.9 lakh residential units are under construction in the city while unsold units stood at 1.3 lakh during the January-September period, Knight Frank said in a report.
“The weakening real estate prices suggest that long- standing stalemate between buyers and builders is finally turning in the buyers’ favour. The increase in inventories coupled with weakening absorption levels would put further pressure on prices,” its research director Samantak Das said.
Mumbai’s unsold inventory level is almost 44 per cent in comparison to NCR’s which stands at 26 per cent even with twice the number of units under construction, the report said.
Owing to weakening demand, new launches in the city plummeted over 40 per cent compared to peak levels in 2010 as developers shift focus on liquidating current inventories.
As many as 47,488 residential units were launched during January-September.
“The residential market has been witnessing a steep decline in new launches as well as demand. Unsold inventory pressure in Mumbai is the highest among all other cities and is depicting a growing trend. We expect a more pronounced price correction which may drive the market to a better equilibrium,” he said.
The current environment will put pressure on prices in the medium term and the scenario is expected to last till the forthcoming general elections.
Further, the rise in interest cost and decline in net profit in 2013 will compel developers to lighten load and de-leverage their balance sheets.
“Major listed companies have defaulted their loans this year, which depicts significant stress levels on their balance sheets. Developers are now trying to salvage the situation by limiting fresh launches and boost sales by promotional activities to avoid reducing the base price.
“Overall, the right time for buyers to expect good deals in the market,” company’s national director Mudassir Zaidi said.
Home buyers expect prices to fall in the next six months as indicated by housing sentiment index that fell by 20 per cent during July-September compared to the previous quarter, according to a survey by Indian Institute of Management Bangalore and property portal Magicbricks.
The Housing Sentiment Index (HSI) is based on an online survey of prospective home buyers in eight major cities of India — Delhi, Noida, Gurgaon, Mumbai, Chennai, Hyderabad, Pune and Bangalore.
“Home buyers across the nation expect real estate prices to fall over the next six months. The aggregate Housing Sentiment Index (HSI) dropped to 93 from 117 in the previous quarter, a decline of over 20 per cent,” IIMB and Magicbricks said in a statement.
An HSI of 100 suggests that buyers expect prices to remain at current levels, while values lower (greater) than 100 suggest that buyers expect prices to fall (rise). “An aggregate HSI score of 93 for the 8 cities surveyed indicates expectation of a price fall over the next 6 months. The index fell from 117 last quarter, which indicates a shift in sentiment among prospective home buyers,” it added.
Buyers in Bangalore still expect prices to increase marginally (HSI=106) while buyers in the other 7 major cities expect prices to fall, with Mumbai having the lowest HSI score of 81.
“The trend is strong in all the eight cities that were surveyed and reflects a shift from the previous quarter when buyers expected price rise to continue,” the statement said.
The percentage of buyers who expect prices to fall by more than 10 per cent has almost doubled from 14 per cent of sample last quarter to 25 per cent this quarter.
“Not surprisingly, more buyers are willing to wait, with almost a third of our sample willing to wait more than a year before buying a property,” the report said.
The rationalised property tax regime by the Haryana Government has sent lakhs of property owners, especially apartment owners, into a tizzy. In fact, the “irrational illogical” property tax formula has earned the ire of the apartment owners, including the cooperative housing society members. All of them have alleged that they have got a raw deal at the hands of Hooda government vis-à-vis the independent house owners.
A look at the property tax rates makes clear that the grouse of apartment owners is justified. “An independent house owner having a plot area of 300 square yards in A-2 cities will pay property tax at the rate of Re 0.75 per square yard, which comes out to Rs 225 per year. However, a person owning a flat having a carpet area of 1,400 square feet will be required to pay property tax at Re 0.75 per square foot, which works out to Rs 1,075 per year,” alleged S.K Aggarwal, general secretary of the Joint Action Committee of Cooperative Group Housing Societies, Panchkula.
And to rub salt into their wounds, Aggarwal alleged that they were not given a personal hearing by the Surjewala Committee formed by the Haryana Government to rationalise property tax, resulting in the current anomaly. In fact, the new property tax regime had sparked off widespread resentment among flat owners, he alleged.
“In fact, it is a double whammy for flat owners as they were also supposed to pay for maintenance of streetlights, power transformers, water supply and internal road network”, adds Aggarwal. The independent house owners are not supposed to pay for these civic amenities and the civic authorities are supposed to maintain these amenities in the case of areas having independent houses.
The Haryana Government recently came out with the new property tax formula on the recommendations of the high-powered committee headed by Parliamentary Affairs Minister Randeep Singh Surjewala.
The notification approved the slab system and divided municipal corporation towns into two categories, A-1 (Gurgaon and Faridabad) and A-2 (Ambala, Panchkula, Karnal, Panipat, Rohtak, Hisar and Yamunanagar). Towns having municipal councils and municipal committees were categorised as B and C, respectively.
The state government recently notified the property tax under which residential and commercial plots up to 100 square feet (500 square yards for industrial/institutional properties) were exempted from the tax. A tax of Rs 0.50 per square yard has been levied on property owners in A-1 cities (Gurgaon, Faridabad) and Rs 0.375 per square yard on vacant residential property owners in other municipal corporations in the state for plots measuring 101 to 500 square yards. The tax rate for residential plots measuring 501 square yards and above would be Re 1 and 0.75 per square yard for A-1 and A-2 cities, respectively.
For commercial plots, the rate would be Rs 5 and Rs 3.75 per square yard for A-1 and A-2 cities, respectively. An amount of Rs 2 and Rs 1.5 per square yard would be charged from the owners of industrial/institutional plots measuring 501 square yards in A-1 and A-2 cities, respectively.
For Class B cities (municipal councils) an amount of Rs 0.25 per square yard would be charged while Rs 0.20 per square yard would be charged in Class C cities (municipal committees) for plots from 101 square yards to 500 square yards. The property tax would be Rs 0.50 and Rs 0.40 per square yard for Class B and Class C cities, respectively, for plots measuring 501 yards and above.
For commercial property, the tax at Rs 2.5 per square yard (Class B cities) and at ~2 per square yard (Class C cities) would be charged for plots above 501 square yards. The owners of the institutional/industrial plots would have to shell out ~1 and ~0.80 per square yard from plots measuring beyond 501 square yards.
Meanwhile, for the residential plots up to 300 square yards, an amount of Rs 1 and Rs 0.75 per square yard would have to be paid in A-1 and A-2 cities, respectively. The rate for Class B and Class C cities would be Rs 0.50 and Rs 0.40 per square yard up to 300 square yards. For plots from 301 square yards to 500 square yards, the rate would Rs 4 (A-1 cities) and Rs 3 (A-2 cities). For 301 to 500 square yards, the rate would be Rs 2 (Class B cities) and Rs 1.6 per square yard (Class C cities).
Similarly, for apartments up to 2,000 square feet, the property tax rates would be Rs 1 per square feet (A-1 cities) and Rs 0.75 per square feet (A-2 cities). The rate would go up to Rs 1.2 per square feet (A-1 cities) and Rs 0.90 per square feet (A-2 cities) in case of flats from 2,001 to 5,000 feet. In case of flats up to 2,000 square feet, the rate would ~0.50 (Class B cities) and Rs 0.40 (Class C cities). For flats in the category of 2,001 to 5,000 feet, the rate would be Rs 0.60 (Class B cities) and Rs 0.48 per square feet (Class C cities).
As far as commercial property was concerned, a rate of Rs 24 per square yard (A-1 cities) and Rs 18 (A-2 cities) would be charged for shops up to 50 yards. For shops from 51 to 100 square feet, the rate would go up to Rs 36 (A-1 cities) to Rs 27 (Class-2 cities). In Class B cities, the rate would be Rs12 while it would be Rs 9.60 per square yard in Class C cities for up to 50 square yards. In case of property from 51 to 100 square yards, the rate would Rs 18 (Class B cities) and Rs 14.40 per square yard (Class C cities).
The property tax was scrapped in 2010 by the Congress government. As a consequence, the Central Government stopped the release of Central grants. The Hooda Government would now be eligible to get Central grants amounting to over Rs 750 crore.
In a clear bid to mop up resources, the state government has brought the vacant plots within the tax ambit. Besides, the property owners will have to pay arrears of the property tax with effect from April 1, 2010.
100 per cent rebate to the religious properties, orphanages, almshouses, municipal buildings, cremation or burial grounds, dharamshalas, Central and state government educational institutions and government hospitals.
100 per cent rebate would be given to the self-occupied residential houses up to 300 square yard owned by serving and retired defence and paramilitary personnel or his/her spouse, families of deceased soldiers/ex-servicemen/ex-Central paramilitary forces personnel.
100 per cent rebate to the self-occupied residential houses owned by freedom fighter or his/her spouse and war widows.
Similarly, 50 per cent rebate would be given to the state government buildings(other than buildings of boards/corporations/ undertakings/ autonomous bodies.
-Apartment owners up in arms against new irrational property tax formula
-Apartment owners to pay much more tax than freehold property owners
-Cooperative housing societies not given personal hearing by Surjewala Committee
-Apartment owners urge the CM to hold property tax notification in abeyance
Indicting the Noida Authority for its “arbitrary” actions, the Supreme Court issued showcause notices to former Uttar Pradesh chief secretary Neera Yadav, her two daughters and others as to why the allotment of their prized plots in Noida should not be cancelled in view of the aberration from the norms.
Rejecting the submission of the Authority that all necessary steps had already been taken, a bench of Justices G S Singhvi and V Gopala Gowda issued notices to Neera Yadav and her daughters Suruchi and Sanskriti.
The court issued showcause notices to another IAS officer, Rajiv Kumar, who along with Neera Yadav, had been convicted by a CBI court in a Noida land allotment case. Shankar Sitapati and Flex Industries were also out on notice.
“We direct that notices be issued to all the persons named to show cause as to why allotments/alternative allotments made in their favour may not be quashed. The notices are made returnable in 10 weeks,” the bench said, while directing Noida CEO to serve the notices to them.
The bench was hearing a PIL that has pointed to grave illegalities in the allotment and conversion of plots. According to the petition, several people were initially allotted plots at different locations, but got larger plots in better places after conversion and payment of transfer charges.
Senior advocate U U Lalit, who appeared for the Authority, had pleaded the bench to close the matter in all the cases in view of the orders passed by the competent authority in compliance of the directions given by the court.
However, senior advocate Rajeev Dhavan, who was appointed amicus curiae in the case, termed the action taken in these cases as an “eyewash and vitiated due to malafides”.
He pointed out that once conversion of the plots of Neera, Suruchi, Sanskriti, Rajiv and Sitapati was cancelled, there could be no justification for allotment of alternative plots to them equivalent to the plots initially allotted.
He further contended that the Authority had not given any explanation as to what action was taken in the case of one Shyam Narayan Mishra, who was found guilty of fraud leading to cancellation of the allotment, and wondered how fresh allotment could be made to various persons after cancellation of conversion.
According to Dhawan, allotment made to the same group of industries, Flex Industries Ltd and Flex Engineering Ltd was also ex-facie illegal because the law did not permit allotment of more than one plot to the same entity.
The court underlined merit in Dhawan’s criticism and held that alternative allotments clearly demonstrated “the arbitrary character of the action taken by Noida Authority”.
It gave allottees six weeks for a response.
GURGAON: Real estate developers have urged the Municipal Corporation of Gurgaon to hand them control of roads that connect city areas to villages, eyeing a revenue windfall as the urban sprawl expands. There are hundreds of revenue roads, as the streets in gentrified areas are known, across Gurgaon as villages surround the city’s urban boom. The civic body has so far received 35 applications from several builders and isn’t averse to the idea of a handover, which will entrust private developers with the responsibility of maintaining civic infrastructure on the revenue roads.
The reason why builders want the MCG to transfer control of revenue roads to them is the subsequent increase in FAR (floor area ratio) that they can bring about while building more properties.
The MCG isn’t unenthusiastic about the proposals because the transfers will bring crores into its coffers. The only dilemma now, it appears, is the price for which these roads can be sold to builders. An official with the civic body said a committee, comprising senior district administration officials, has been set up to determine the price. “There are many revenue roads both in old and new Gurgaon and realtors have built properties on both sides of these roads. Since the roads still belong to MCG, they are not able to increase FAR. They are willing to pay the prevailing market price for the handover. As it cannot benefit from these roads any way, MCG too it is willing to transfer ownership to earn revenue,” a senior MCG official said.
Nov 29, 2013, 08.00AM IST
हाई कोर्ट में सुनवाई 2 दिसंबर को
एनबीटी न्यूज ॥ गुड़गांव
कॉलोनाइजर एरिया में हाउस टैक्स वसूलने का मामला फिर से गरमा गया है। इस मामले में कोर्ट ने निगम से कई मुद्दों पर सवाल किया था, जिसके जवाब में निगम ने कहा है कि अपने इलाके में निगम हाउस टैक्स वसूलने के लिए स्वतंत्र है। यहां तक कि ट्रांसफर एरिया व कालोनाइजरों द्वारा डिवेलप इलाकों में भी निगम हाउस टैक्स वसूल सकता है। इन इलाकों में हाउस टैक्स वसूलने के लिए निगम ने म्युनिसिपल कॉरपोरेशन एक्ट की धारा 87 का भी हवाला दिया है। मामले में 2 दिसंबर को हाई कोर्ट में सुनवाई होनी है। निगम ने अपना जवाब कोर्ट में फाइल किया है।
गौरतलब है कि इस साल मई में गुड़गांव सिटिजन काउंसिल ने कॉलोनाइजर एरिया में हाउस टैक्स वसूलने के विरोध में हाई कोर्ट में याचिका दायर की थी। कोर्ट ने निगम से इस संबंध में कई मुद्दों पर जवाब मांगा था। जवाब 2 दिसंबर से पहले फाइल करना था। कोर्ट के सवालों के जवाब में निगम ने कहा है कि म्युनिसिपल कॉरपोरेशन एक्ट की धारा 87 के तहत निगम ट्रांसफर एरिया या कॉलोनाइजर एरिया में हाउस टैक्स वसूल सकता है। निगम ने याचिकाकर्ता के उस आरोपों को सिरे से नकार दिया है, जिसमें कहा गया है कि बिना ग्राउंड एक्सरसाइज के ही सरकार ने निगम बनाने की घोषणा कर दी थी। निगम ने याचिकाकर्ता के उस आरोप को भी नकार दिया है, जिसमें कहा गया है कि हाउस टैक्स वसूलने के लिए यहां रहने वाले लोगों को निगम ने नोटिस जारी किया है। जवाब में निगम ने कहा कि 11 अक्टूबर को हाउस टैक्स की नई पॉलिसी लागू होने के बाद से किसी को भी नोटिस जारी नहीं किया गया है।
इस मामले में जॉइंट कमिश्नर अंजू चौधरी का कहना है कि कोर्ट में इस मामले की सुनवाई 2 दिसंबर को होनी है। कोर्ट जैसा आदेश देगा निगम उसे फॉलो करेगा। उनका कहना है कि निगम ने कोर्ट को बताया कि नियमों के अनुसार निगम कॉलोनाइजर एरिया में हाउस टैक्स वसूलने के लिए स्वतंत्र है।
Nov 29, 2013, 08.00AM IST
एनबीटी न्यूज ॥ गुड़गांव
आयुध डिपो के प्रतिबंधित एरिया में अवैध निर्माण नहीं रुक रहा है। इस पर डिप्टी कमिश्नर ने क्विक एक्शन टीम में शामिल अधिकारियों को कड़े लहजे में चेतावनी दी है। उन्होंने कहा कि टीम के सदस्यों का काम संतोषजनक नहीं है। उन्होंने सैटेलाइट रिपोर्ट तैयार कर 3 साल की इमेज उपलब्ध कराने का आदेश दिया है। पुलिस से नाइट पेट्रोलिंग के दौरान अतिरिक्त जवानों को ड्यूटी पर लगाने को कहा गया है।
डीसी शेखर विद्यार्थी ने इसी माह प्रतिबंधित क्षेत्र में अवैध निर्माणों की समीक्षा की थी। इस दौरान पूरे एरिया को 6 डिवीजनों में बांटा गया। प्रत्येक डिविजन में चेकिंग के लिए क्विक एक्शन टीम बनाई गई। इसके बाद भी इलाके में अवैध निर्माण जारी हैं। टीम में शामिल सदस्यों को डीसी ने चेतावनी दी कि अवैध निर्माण की सूचना मिलने पर मेंबरों के खिलाफ कार्रवाई की जाएगी। आयुध डिपो एरिया में सैटेलाइट इमेज तैयार करने के लिए एक कंपनी को काम सौंपा गया है। डीसी ने प्रतिबंधित क्षेत्र का पिछले 3 साल की सैटेलाइट इमेज उपलब्ध कराने को कहा है। इसके अलावा कंपनी को हर महीने सैटेलाइट इमेज देने को कहा गया है। रात में अवैध निर्माणों की जांच के लिए उन्होंने पुलिस कमिश्नर को लेटर लिखा है। इसमें कहा गया है कि नाइट पेट्रोलिंग के लिए अतिरिक्त पुलिस कर्मियों की ड्यूटी लगाए।
शेखर विद्यार्थी का कहना है कि प्रतिबंधित क्षेत्र में अवैध निर्माणों की समीक्षा समय – समय पर की जाती है। इस बार समीक्षा के दौरान क्विक एक्शन टीम के कार्यों में कोताही की रिपोर्ट मिली थी। इस पर उन्हें चेतावनी दी गई है।
New Delhi: Many highway developers, including GMR and GVK, are set to get major relief in next one week as the PM-appointed C Rangarajan committee is likely to recommend reduction and deferment of premium to be paid to NHAI.
The panel is likely to suggest that for six-laning of highway projects, at least 25% reduction in annual premium payment to NHAI during construction period and about 50% during subsequent years. The panel was constituted to come out with a formula to defer the premium payment towards later part of the concession period to make projects viable for developers.
In case of four-laning of projects, the developers dont have to pay premium during the construction period. During operation and maintenance period, they have to pay minimum 50% of the committed annual premium.
Premium is the annual upfront revenue that the developers have promised to pay to NHAI, while bagging the projects. The promised premium of around Rs 1 lakh crore will come to NHAI in the next 20-30 years, according to the road ministry. While the developers will pay lower amount in the initial years, they have to pay higher amount in the later part of the period to fulfill the commitment.
For both six-laning and four-laning of highway projects, during operation and maintenance period, annual cash flow surplus subsequent to fulfilling debt servicing and other obligations, will have to be used mostly towards premium payment. The objective is to ensure that NHAI gets the entire premium at least three years before the contract period ends, said a source.
Developers were complaining about difficulties in premium payment due to slowdown in traffic amid a weak economy. Many projects,which were awarded could not take off, while many on-going projects were getting stuck. The committee felt that a reduction and deferment of premium payment in the initial period and increasing the amount in the later, when both traffic growth and collection of toll are expected to go up, will help the developers.
Nov 29, 2013, 08.00AM IST
एनबीटी न्यूज॥ गुड़गांव
सेक्टर-10 ए थाना पुलिस ने गांव बसई मेंे अवैध रूप से प्लॉट काटने पर एक महिला के खिलाफ केस दर्ज किया है। उस पर आरोप है कि अन्य लोेगों के साथ मिलकर बिना परमीशन के यहां पर प्लॉट काटे। डीटीपीई की ओर से मिली शिकायत के बाद पुलिस ने केस दर्ज किया है। पुलिस इसकी जांच कर रही है कि इसके पीछे कौन लोग शामिल हैं। सेक्टर-10 ए थाना प्रभारी इंस्पेक्टर हंसराज ने बताया कि पुलिस ने केस दर्ज कर लिया है।