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18-Dec-2019
10-Oct-2019
06-Dec-2019
CREDAIBengalDailyNewsUpdate | 18.12.19
Sluggish market narrows price gap between ready, unfinished
apartments
The price gap is currently 3-7% in the top seven property markets of the country,
compared with 8-12% in 2017 and 5-9% last year, showed data from ANAROCK
Property Consultants.
The price gap between ready-to-move-in and under-construction homes is thinning as a sluggish
property market is restricting realty developers’ ability to charge a premium for apartments
where buyers can take possession immediately.
The price gap is currently 3-7% in the top seven property markets of the country, compared
with 8-12% in 2017 and 5-9% last year, showed data from ANAROCK Property Consultants.
Ready apartments attract a premium over under-construction units because of fewer risks, such
as delays in the completion of the projects. Demand for ready homes is going up in the current
market as buyers are increasingly looking to avoid uncertainty, but with limited momentum in
overall residential sales, builders are staying away from price hikes as it could impact
homebuyers’ sentiment.
“Previously, the ultimate selling proposition of under-construction homes was significantly
lower prices over ready-to-move options,” ANAROCK chairman Anuj Puri said. “The ready
apartments’ premium was primarily on the ‘instant gratification’ quotient, immediate freedom
from rent and zero construction risk.”
He attributed the reducing gap between the two categories to developers’ reluctance to hike
prices of ready properties amid the overall slowdown. In a market scenario of slow housing
sales, price hikes would dampen homebuyer sentiments further, he said. Ready unsold stock
will not find many takers if prices are increased. Of the key markets, the National Capital
Region (NCR) recorded the least price difference between ready and under construction
apartments at 3%, while Pune had the highest at around 7%. Bengaluru witnessed a price gap of
around 5%, while in the Mumbai Metropolitan Region, Chennai and Kolkata, it was 4%.
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/sluggish-market-narrows-price-gap-between-ready-unfinished-apartments/72827653
“We have witnessed good demand for our ready-to-move-in apartments. We haven’t increased
prices and are not looking to do so in the near future either as this may slowdown the sales,”
said Vijay Wadhwa, chairman emeritus of the Wadhwa Group, that has claimed to have sold
100 ready apartments in the past three months at its mid-income residential project Atmosphere
in Mumbai’s Mulund suburb.
This reducing price gap is proving to be favourable for those who buy the homes to live there as
well as investors. Buyers in the first category prefer to see the end product rather than a floor
plan and are usually eager to get off the rental treadmill. Investors previously chose under-
construction homes for their lower prices and the compounding capital appreciation as projects
neared completion. Along with the other benefits that ready homes provide, they attract no
goods & services tax.
The preference for ready-to-move homes is spread across all price categories, including
premium housing.
The rising preference for ready apartments to avoid uncertainty over delivery has resulted in
lower proportion of such units in the overall inventory levels. Out of a total of 6.56 lakh unsold
apartments across the top seven cities, 81,300 units, or more than 12%, are ready-to-move-in
homes, showed recent data.
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DDA portal to register properties in unauthorised colonies
launched
Out of 1,731 unauthorised colonies, 1,500 have already been demarcated and maps of
more than 1,100 have been uploaded on the portal, he said.
Union Housing and Urban Affairs minister Hardeep Singh Puri on Monday launched a portal
of Delhi Development Authority (DDA) for registration of properties in unauthorised colonies
in the city. Puri said that the the government is committed to benefit 50 lakh residents of
unauthorised colonies.
Out of 1,731 unauthorised colonies, 1,500 have already been demarcated and maps of more than
1,100 have been uploaded on the portal, he said.
Delhi's Lt Governor Anil Baijal was present on the occasion.
Puri also inaugurated a project for construction of a socio-cultural centre in Rohini that will cost
Rs 350 crore.
Spread over 11 acres, the centre will be a nerve centre of Delhi's socio-cultural life, said local
MLA and Leader of Opposition in Delhi Assembly, Vijender Gupta.
________________________________________________________________________________________________
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/dda-portal-to-register-properties-in-unauthorised-colonies-launched/72809584
Chandigarh housing board to issue allotment letters for Sector 51
scheme
The CHB had launched the 200-flat self-financing housing scheme in Sector 51 in April
2016, but officials maintained that the work was delayed due to encroachment on the land
and high-tension wires on the site.
After a gap of more than three years, the Chandigarh Housing Board (CHB) would start issuing
allotment letters to allottees of the Sector 51 housing scheme - the costliest in the city till date.
The process will start by this weekend, a senior CHB official said.
The CHB had launched the 200-flat self-financing housing scheme in Sector 51 in April 2016,
but officials maintained that the work was delayed due to encroachment on the land and high-
tension wires on the site. There were 200 two-BHK flats under the scheme.
The allottees had even demanded monthly interest on the money deposited by them for these
flats. The allottees paid more than Rs 70 lakh for the flats within 90 days from the date of
issuance of an acceptance-cum-demand letter as per the terms and conditions.
The board was to hand over these flats to allottees by June/July 2019, but the construction got
delayed.
When the scheme was launched, the high price and the condition of making full payment within
a period of 90 days were responsible for the scheme not attracting a high number of applicants.
For these 200 flats, the board had only received 225 applications.
For these flats, the board had fixed a tentative price of Rs 69 lakh for each flat, excluding other
charges, making it the most expensive scheme.
Land measuring 4.48 acres in Sector 51 was earmarked for the project, but around 1 acre was in
possession of three saw mills since 1988. The mill owners were in litigation against the UT
administration seeking rehabilitation.
The litigation delayed the project for more than two years and caused hardship to the allottees
who gave full payment in advance to the board. Later, shifting of high-tension wires also
delayed the project.
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/residential/chandigarh-housing-board-to-issue-allotment-letters-for-sector-51-scheme/72828599
Chennai: Soil tests done on property of litigants without prior
notice
Several litigants whose premises fall in the way of the new project have opposed this move
as they are yet to receive any compensation.
Officials of the MRTS extension project have begun conducting soil tests on the property of
several litigants whose land is being acquired for the final 500-metre stretch of Velachery-St
Thomas Mount MRTS project. Several litigants whose premises fall in the way of the new
project have opposed this move as they are yet to receive any compensation.
State government agencies claim that the acquisition process is almost complete. Residents,
meanwhile, have said that it has been nine months since the Madras high court ruled on
releasing due compensation to them, but they have not received any payout.
Revathy, a litigant in the project, said that last Monday some officials entered her house to
conduct soil tests. “They were railway officials and carried on with their work despite my
objections,” she told TOI. She has now planned to approach the Chennai Metropolitan
Development Authority (CMDA) in this regard.
A senior government official dealing with the land acquisition project told TOI that the tests
may have been conducted by CMRL, as one corridor was being planned above the MRTS
section. But he denied any knowledge about the tests being conducted without giving notice to
the residents.
Venkateshwaran, another resident who is involved in the litigation, said that this move was
nothing but an intimidatory tactic .
A state government official said that the compensation payment will be made within two weeks.
However, TOI has accessed documents which show that the government is also mulling moving
the Supreme Court againstthehighcourtorder despite a legal opinion given to the contrary by an
additional advocate general.
Though the official claimed that the acquisition process is over, there are still several issues
raised by residents that have not been addressed. For instance, there is a dispute on the price to
be paid for properties on Adambakkam main road and for those a few metres away from the
road. The disparity is around ₹750 per square feet.
Another issue is about an interim compensation of ₹20 crore that is lying in the account of
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/infrastructure/chennai-soil-tests-done-on-property-of-litigants-without-prior-notice/72828343
the Tambaram court. This amount has been released by the government initially, but the award
was quashed in 2015.
Residents said there were bureaucratic delays in getting the compensation amount released as it
required signatures from key government officials.
________________________________________________________________________________________________
DHFL bonds traded at about 80% discount
These bonds, worth about Rs 20 crore, sold at a discount yielding about 80 percent, with
traders saying Deutsche Bank was the buyer. Deutsche Bank declined to comment.
Bonds of Dewan Housing Finance (DHFL) traded in the secondary markets for the first time
since the embattled financier became the first from its industry to be put into administration.
These bonds, worth about Rs 20 crore, sold at a discount yielding about 80 percent, with traders
saying Deutsche Bank was the buyer. Deutsche Bank declined to comment.
Bonds were priced at Rs 22.39 against Rs 100 per unit face value, traders said.
The demand for junk bonds has been picking up past three- four months with foreign banks
like Barclays, Deutsche, Bank of America owning such papers.
Those select banks have dedicated focus on distressed assets. They are either keeping those
papers on their books or passing them to their offshore clients, " said trader from a local bond
house.
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Newspaper/Online ET Realty(online)
Date December 18, 2019
Link https://realty.economictimes.indiatimes.com/news/allied-industries/dhfl-bonds-traded-at-about-80-discount/72861988
Punjab to bring in 'liberal' municipal building bylaws
The state government, according to a source, is toying with the idea of allowing mixed
land use and more parking spaces with higher floor area ratio (FAR) for commercial
establishments.
In a bid to boost existing businesses in the state, Punjab has decided to ‘liberalise’ its existing
municipal building bylaws by offering relaxations that would make the bylaws for both
commercial and domestic buildings at par with other states.
Punjab local bodies minister Brahm Mohindra told TOI, “After due perusal, it was felt that the
present building bylaws in the state are a bit stringent as compared to the bylaws elsewhere and
there is need to give certain relaxations. The move would also introduce an element of positivity
in the state economy by helping the existing business units generate more revenue.”
The state government, according to a source, is toying with the idea of allowing mixed land use
and more parking spaces with higher floor area ratio (FAR) for commercial establishments. For
instance, multiplexes in the state could soon be allowed to rent out space for corporate offices
and set up a small hotel on their premises that will help make optimum utilization of space and
also offer more services to the visitors, the source added.
‘Punjab building rules are a bit too strict’
There has been a demand for greater parity in the bylaws with PUDA building rules and model
building bylaws of the Union ministry of urban development and poverty alleviation.
“Town planners have already given their inputs on how to make Punjab’s building bylaws
balanced in all respects. When compared with the national bylaws, Punjab’s rules are definitely
a bit too strict. After the bylaws are relaxed, urban development and building construction
activities will get a boost, which will be helpful for economic development of the state. The
bylaws for domestic buildings are also likely to get some relaxations,” said an official, who did
not want to be identified.
The state’s local bodies department had notified ‘Punjab Municipal Building Bylaws 2018’ in
November last year. The bylaws for the first time had defined an individual plot, thereby,
making independent floors on individual plots unauthorized, however, this rule continues to be
violated in many urban centres of the state. Besides, parking was made mandatory for
residential plots — ranging from two scooter parking spaces to three ECS (equivalent car
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/punjab-to-bring-in-liberal-municipal-building-bylaws/72830122
space).
Last year, state’s urban planning department also came up with ‘Punjab Urban Planning and
Development Rules-2018’, aka PUDA building rules, which paved the way for purchasable
unlimited floor area ratio (FAR) for group housing, commercial, public office, hotel and
industrial buildings, while raising permissible FAR for residential development and educational
buildings. Notified in June last year, the rules were expected to encourage construction activity
but did not have any significant impact.
________________________________________________________________________________________________
Thirteen villages in Chandigarh have to pay property tax
There are a total of 3,138 commercial properties in the 13 villages, according to the
records of the MC. Daria tops with 443 commercial properties.
The local bodies department of the UT administration has ordered the imposition of
commercial property tax in 13 villages, overruling the decision of the general house of the
municipal corporation (MC).
The civic body will have to start incurring the tax from April 2020.
There are a total of 3,138 commercial properties in the 13 villages, according to the records of
the MC. Daria tops with 443 commercial properties.
Arun Kumar Gupta, home-cum-local bodies secretary, in his order, stated, “While the MC has
not been able to impose property tax in the 13 villages, the administration is of the opinion that
it is necessary for the MC to raise its own resources for the development of the city by imposing
the property tax on commercial, industrial and institutional properties in the villages.”
“The UT administrator has ordered that the MC shall impose tax on commercial, industrial and
institutional properties in the 13 villages,” the order stated.
The MC house had rejected the agenda related to the imposition of property tax in the 13
villages twice, citing no development. Later, the tax branch of the MC had asked the urban local
bodies of the UT to take a decision. The civic body had also citied that the UT AG had already
created a matter of revenue loss for not bringing these village into the tax ambit.
All the 13 villages were transferred to the MC in October 2018. Since then MC officers had
been trying to convince the general house the need to impose the tax.
________________________________________________________________________________________________
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/regulatory/thirteen-villages-in-chandigarh-have-to-pay-property-tax/72830306
WeWork arranges $1.75 billion credit line with Goldman Sachs
"We are pleased that WeWork and SoftBank Group Corp have entered into a
commitment letter with Goldman Sachs for a new $1.75 billion senior secured letter of
credit facility," WeWork said in a statement.
Shared workplace operator WeWork said on Tuesday it has arranged a $1.75 billion letter of
credit with Goldman Sachs that is in the process of being syndicated and whose funds are
expected to be available in January.
The credit line is part of SoftBank Group Corp's $9.5 billion bailout that was announced in
October when money-losing WeWork was on the brink of running out of cash after its plans to
go public were abruptly withdrawn a month earlier.
The three-part bailout included a tender offer of up to $3 billion to buy privately held WeWork
shares, the acceleration of a $1.5 billion payment from SoftBank that was due next year, and
some $5 billion in new debt including the line of credit.
"We are pleased that WeWork and SoftBank Group Corp have entered into a commitment letter
with Goldman Sachs for a new $1.75 billion senior secured letter of credit facility," WeWork
said in a statement.
"The facility is in the process of syndication and is expected to be available in January,"
WeWork said.
WeWork will not be required to post cash collateral on the new credit facility, the statement
said.
When the bailout was announced, SoftBank said funding for the new debt would occur after the
tender offer was completed.
The tender has launched but is not expected to be finished until the first quarter of 2020, subject
to regulatory approvals and closing conditions, a source with knowledge of the matter said.
The Goldman-backed letter of credit is expected to free up about $800 million in restricted cash,
the source said.
Newspaper/Online ET Realty(online)
Date December 18, 2019
Link https://realty.economictimes.indiatimes.com/news/commercial/wework-arranges-1-75-billion-credit-line-with-goldman-sachs/72861967
Building permits in US rises 1.4% in November
Construction also rose faster than expected, led by a surge in the construction of
apartments in the South, according to the Commerce Department figures.
Permits to build new homes in the United States rose in November to their fastest pace in more
than 12 years, government data showed Tuesday in another sign the American housing sector is
heating up.
Construction also rose faster than expected, led by a surge in the construction of apartments in
the South, according to the Commerce Department figures.
With recession fears fading at the close of 2019, the housing sector has become a bright spot in
the world's largest economy, as low unemployment, attractive interest rates and rising wages
contribute to pent-up demand for new homes.
Permits for new construction, a sign of new supply in the housing pipeline, rose 1.4 percent to
an annual rate or 1.48 million units, seasonally adjusted, the highest level since May of 2007,
marking a new post-recession high and handily surpassing forecasts.
Permits for single-family homes also ticked higher to an annual rate of 918,000, also a post-
recession high at the fastest pace since July of 2007.
Construction jumped 3.2 percent to an annual rate of 1.37 million units, also surpassing
expectations. Construction fell in the Northeast and Midwest but rose in the West and South,
where multi-unit dwellings led the gains.
Figures for construction, however, were as usual well outside broad margins of error and
officials warn that trends may take months to appear.
However, the November reading was 13.6 percent above the same month in 2018.
Ian Shepherdson of Pantheon Macroeconomics said Tuesday the numbers pointed to a
"sustained surge" with a coming rise in the availability of apartments likely to ease upward
pressure on rents.
"More immediately, these data support our view that investment in residential structures is
likely to rise at a double-digit pace in both the fourth and first quarters," he said in a note to
clients.
Newspaper/Online ET Realty(online)
Date December 17, 2019
Link https://realty.economictimes.indiatimes.com/news/industry/building-permits-in-us-rises-1-4-in-november/72854453
As a result, this could help offset the drag on GDP growth from sluggish investment by
businesses, according to Shepherdson.
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