Apartment sizes shrink in 7 major cities in 5 years

In percentage terms, the drop is maximum in Bengaluru (21%), where the average apartment area has reduced from 1,750sqft to 1,375sqft

The average sizes of apartments promoted by the developer community have shrunk in all major cities in the country over the last five years as promoters have been making efforts to fit their projects into the "affordable housing" bracket.

In percentage terms, the drop is maximum in Bengaluru (21%), where the average apartment area has reduced from 1,750sqft to 1,375sqft. Pune recorded a 19% fall, NCR 17%, Mumbai Metropolitan Rrea (MMR) 17% and Chennai 15%, says a report by Anarock Property Consultants.

With a view to ensuring housing for all by 2022, the Union government has gone the extra mile to make things happen. Still, the developer community is nowhere near fulfilling the affordable housing demand in the country as most of them are not catering to the needy, says the study. "Unfortunately, what we have seen so far is more marketing hype than genuinely affordable housing," said Anarock chairman Anuj Puri.

The term affordable is being misused by most developers to show that they align with the ‘housing for all’ mission, he said. Going by the ministry of housing and urban poverty alleviation’s definition, dwelling units between 300sqft and 500sqft valued at less than `5 lakh are affordable for the economically weaker sections. The numbers change for the low income group (LIG) and middle income group (MIG). RBI’s norms to qualify for incentives meant for affordable housing say the dwelling unit should not cost more than Rs 45 lakh in metros and not more than Rs 30 lakh in non-metros. Out of 22,120 dwelling units launched in the second quarter of 2018 in the top seven cities, only 46% qualified for the affordable housing segment, he said. Of them, 6,530 units were priced at less than Rs 20 lakh per unit and the remaining were between Rs 20 lakh and Rs 40 lakh, he said. Between the first and second quarter this year, there was a 100% increase in supply in the affordable housing segment, said Puri.

Puri advocates promotion of rental accommodation for those who cannot afford to buy own apartments. "This is quite a challenge, considering that the Indian real estate market now favours end-users and remains unattractive for investors," he said. What is required is exempting affordable housing from GST altogether to attract more investors, he said.

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New Zealand passes ban on foreign homebuyers into law

Jacinda Ardern, New Zealand's popular 38-year-old prime minister, campaigned before September's election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers

WELLINGTON: New Zealand's parliament passed a law on Wednesday to ban many non-resident foreigners from buying existing homes, completing the Labour-led government's election campaign pledge.

Jacinda Ardern, New Zealand's popular 38-year-old prime minister, campaigned before September's election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.

"This is a significant milestone and demonstrates this government's commitment to making the dream of home ownership a reality for more New Zealanders," Associate Finance Minister David Parker said.

Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, almost double in the past decade and rise more than 60 percent nationwide.

House price growth has tapered off in the past year in part due to restrictions imposed on lending by the central bank, which was becoming alarmed at the potential financial stability risk of an overheated market.

Figures released by the Real Estate Institute of New Zealand on Wednesday showed median house prices had slipped 1.8 percent to NZ$550,000 ($360,140) in July from the previous month, although they were still 6.2 percent higher than the same time the previous year. 

The government slightly relaxed the proposed ban in June so that non-residents could still own up to 60 percent of units in large, newly built apartment buildings but would no longer be able to buy existing homes.

The International Monetary Fund called on the government in July to reconsider the ban, warning the move could discourage foreign direct investment necessary to build new homes.

Official figures suggest that the overall level of foreign home buying was relatively low - about 3 percent of property transfers nationwide. 

However, the data did not capture property bought through trusts and also showed property transfers involving foreigners was highly concentrated in certain areas, such as downtown Auckland and the southern scenic hot spot of Queenstown.

The majority of overseas buyers were from China and neighbouring Australia, according to Statistics New Zealand.

"Is the ban wise or useful? We think it's neither," said spokesman Dave Platter of Chinese real estate portal Juwai.com.

"Foreign buying ... tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That's vital in a market with a housing shortage, like Auckland," he said. 

The government has said the ban would not apply to Australians and has been negotiating with Singapore, whose free trade agreement with New Zealand allows foreign ownership, on whether to grant an exemption.

($1 = 1.5272 New Zealand dollars)

(Editing by Paul Tait)

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Home Credit leases 1.5 lakh sq ft at Empire Tower in Navi Mumbai

The total lease tenure is five years including a rental reset after three years from now. The company will be paying rental of Rs 55 per sq ft a month, taking the annual payout to nearly Rs 10 crore

MUMBAI: Non-banking financial company Home Credit India Finance has picked up around 1.5 lakh sq ft of office space on lease in Reliable Group’s commercial project Empire Tower in Navi Mumbai’s Airoli locality, said two persons familiar with the development.

The total lease tenure is five years including a rental reset after three years from now. The company will be paying rental of Rs 55 per sq ft a month, taking the annual payout to nearly Rs 10 crore.

“The deal has been finalized and the terms have been agreed upon. The company has already started undertaking possession of the property for fit-outs and furbishing,” said one of the persons mentioned above.

Home Credit India has operations in over 120 cities across 20 states in the country. The company has a network of more than 26,000 points-of-sale (PoS) serving over 6 million customers. Its employee base stands at over 16,000, and the new office space is expected to accommodate 2,600 employees.

Empire Tower is an IT park, part of the 5-million sq ft commercial project Cloud City that has GE, HCL, Atop Origin, Sify, Honeywell, and Sutherland operating from the campus. Recently companies including Cipla, Aditya Birla Group subsidiary Birla Management Services, Tata Consulting Engineers, Mersk GSC, Invenio and EFC have picked up total 3.5 lakh sq ft office spaces here. 

Most of these companies have set up their back office processing and consulting units in Navi Mumbai, which has been emerging as a hub for these activities. Several companies have shifted their office catering to these services from central Mumbai, Powai, Vikhroli and Andheri-Malad belt to Navi Mumbai.

Reliable Group’s CEO Aaron Dlima confirmed the transaction, while ET’s email query to Home Credit India Finance remained unanswered till the time of going to press.

“We are strategically well placed as a location owing to the proximity of public transport system (rail & road) , close to residential and commercial areas of Thane & Mumbai and the solid new-age civic infrastructure of Navi Mumbai which has led to large scale relocation and expansion on this belt,” Dilima said.

Navi Mumbai is fast evolving as one of the key destinations for office occupiers in recent times and has recorded 5.9% sequential rental rise during the quarter ended June, said Colliers Research.

In the first half of 2018, office demand in this micro-market, which constituted 6% of the total absorption recorded in the city was driven by varied sectors including pharmaceutical, manufacturing, BFSI, IT/ITeS and flexible workspace operators. The micro-market is expected to command higher rents going forward aided by increasing demand from the BFSI sector for their back-office operations, Colliers explained.

With the latest lease transaction of Home Credit India Finance, the project’s occupancy stands at 40% and the company is in advanced talks to lease an additional 3 lakh sq ft here.

Piramal Fund Management, the financial services arm of Ajay Piramal-led Piramal Group, has deployed Rs 700 crore collectively against Reliable Group’s two commercial properties, Reliable Tech Park and Empire Towers. 

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Banks should refrain from raising interest rates: ASSOCHAM

The RBI itself has stated in the credit policy review document of August 1 that the "systemic liquidity has remained generally in surplus mode during June-July period"

MANGALURU: With surplus liquidity in the banking system, the banks should not rush to increasing their lending and deposit rates despite the Reserve Bank of India (RBI) raising the benchmark, repo rate, the ASSOCHAM has said.

"In the policy presentation on August 1, the top RBI brass said it clearly that there is generally a lag between the announcement of a rate change and transmission in the system. If this holds true in the cases where the repo rate was dropped, it should also hold true now that the benchmark lending rates have been tweaked up," ASSOCHAM spokesman said.

The RBI itself has stated in the credit policy review document of August 1 that the "systemic liquidity has remained generally in surplus mode during June-July period". While the RBI has been doing a good job in managing the day-to-day liquidity in the banking system, the banks need not rush into raising the lending rates. The credit demand has not been rising with much of a speed either. 

"The state of economy is poised at a very delicate stage. There is an upward growth bias; but it cannot be taken for granted. Interest sensitive sectors like automobile, consumer durables, real estate have a great multiplier effect and should not be burdened with the rising interest costs. Increased interest costs act like a double whammy. The cost of production goes up while consumer demand gets subdued," the spokesman said.

"Let there be a lag between the increase in the Repo rate and the transmission. On the other hand, the corporate India and the trade would use this window effectively for bringing in operational efficiency so that the effect on the ground does not show much of a cost change. The industry would be able to absorb the cost while the consumers should continue giving a demand push to the consumables," the chamber noted.

In this context, the GST Council, has done a commendable job in responding to the situation and dropping the GST rates on a number of items. "More items should be brought down from the 28 per cent slab to give a push to the consumer demand. Combined with operational efficiency, the demand should then remain strong. In the meanwhile, the banks should be refraining from raising the interest rates".

Credit : https://realty.economictimes.indiatimes.com/