Sept 2019 - Credai Bengalcredaibengal.in/wp-content/uploads/2019/09/20Sept19-CB... · 2020. 2. 28. · philosophy by creating new business verticals such as offices, retail, logistics

20-Sept-2019

CREDAI Bengal Daily News Update | 20.09.19

________________________________________________

WEST BENGAL NEWS

West Bengal government introduces stricter norms for housing

scheme

The government has asked district magistrates to organise block-level beneficiary

interaction sessions to make them aware of project details, the amount allotted and details

of materials and construction design of dwelling units.

The West Bengal government has introduced stricter norms for sanctioning funds under Bangla

Awas Yojna (BAY) to plug leakage following allegations of cut money pouring into

government offices from beneficiaries.

A recent notification by the panchayat and rural development department makes it mandatory

for beneficiaries to send stage-wise photographs of under-construction dwelling units to the

department before release of the next instalment of BAY funds.

The government has asked district magistrates to organise block-level beneficiary interaction

sessions to make them aware of project details, the amount allotted and details of materials and

construction design of dwelling units.

Department officials said: ―The DMs have been asked to call all the beneficiaries to the

orientation programme and hand them the sanction letter. Apart from making them aware of the

details of their houses, including the time frame (120 days) and particulars regarding the room,

balcony and cooking area, they will be informed that they don’t need to pay money to anyone.‖

―District officials have also been advised to provide handbooks to each beneficiary detailing the

benefits and probable house design with required specifications,‖ an official said. The

department will also give a phone number to the beneficiaries of each block to lodge complaints

if anybody demands money under BAY.

The decision to introduce stricter norms comes amid allegations that beneficiaries had to pay Rs

10,000-25,000 to get enrolled under the scheme, which provides each beneficiary Rs 1.2 lakh to

set up a dwelling unit on their plots.

The monitoring has become all the more necessary as West Bengal is among the top performers

in constructing concrete houses for the rural poor. It has set a target of completing nearly 7 lakh

houses before March 2020 and will complete construction of 22 lakh houses by end-2022.

_______________________________________________________________

Newspaper/Online ET Realty (online)

Date September 19, 2019

Link https://realty.economictimes.indiatimes.com/news/regulatory/west-bengal-government-introduces-stricter-norms-for-housing-scheme/71203222

OTHER NEWS

Indian realty attractive for global investors: John Forrester,

Cushman & Wakefield

Private equity firms have invested over $4.2 billion into India’s realty market in the first

half of 2019.

The slew of reforms introduced in the Indian real estate sector over the past two-three years are

helping the market move towards improved transparency and are therefore attracting more

foreign institutional investors, said John Forrester, global president, Cushman and Wakefield.

―With RERA (Real Estate (Regulation and Development) Act, 2016), GST (Goods and Services

Tax), insolvency & bankruptcy law, all of these reforms, the Indian economy is getting more

sophisticated, and it's an easier place to do business. With the added sophistication and the

added ease of doing business, all of a sudden risk return moves into India’s favour,‖ he told ET

in an exclusive interaction while referring to India’s attractiveness in realty sector from global

investors’ perspective.

Driven by the investment appetite for commercial properties, private equity inflow into Indian

real estate sector has been strengthening further mainly on account of foreign funds’ direct

exposure and platform alliances. Private equity firms have invested over $4.2 billion into

India’s realty market in the first half of 2019, up 10% from a year ago.

―We see an abundance of opportunity in the domestic market here in India. There are a lot of

demographic and economic tailwinds for India that don't necessarily exist in other markets,‖

said Matthew Bouw, CEO – Asia-Pacific, Cushman and Wakefield, while highlighting India’s

demographic factors.

While both Forrester and Bouw agreed that the residential segment of Indian real estate is going

through a sluggish phase, affordable housing continues to perform better in the backdrop of the

government’s objective of Housing for All by 2022.

Given the issues of delayed deliveries and instances of rising consumer activism over the past

few years, real estate developers’ business models are going through a change.

―The market is coming to terms with these changes.‖ Forrester said. ―Your business models

have changed because the capital infusions have become much more capital-heavy, while on the



Link https://realty.economictimes.indiatimes.com/news/industry/indian-realty-attractive-for-global-investors-john-forrester-cushman-wakefield/71211201

other hand, the regulation has completely changed the landscape.‖ Both of them reckon that

India is standing among the top 10 key markets in the global scheme of things and the scenario

has changed completely in favour of the country over the past few years.

―So, we focus on the top 50 or so markets in the world, I would say that we're probably looking

at three or four of those now in India, whereas four or five years ago, maybe only one or two,‖

Bouw said.

________________________________________________________________

Cidco to build over 2 lakh homes under PMAY

Navi Mumbai town planning authority Cidco has undertaken a herculean task of creating 2.10

lakh homes under the Pradhan Mantri Awas Yojna (PMAY).

City and Industrial Development Corporation (Cidco) has already awarded contracts to

construct nearly 95,000 homes and has already announced the lottery for 9,249 units.

"We have now decided to create an additional 1.10 lakh homes under the PMAY scheme. These

along with the already under construction houses will take the total to 2.1 lakh homes," the

authority said in a statement on September 18.

Out of the 1.10 lakh homes, 62,976 units would be built for the economically weaker section

while 47,040 homes would be offered to the LIG category.

Under PMAY, the Centre aims to provide housing for all with a target of building 20 million

affordable houses by 31 March 2022.

Cidco plans to develop the projects in villages like Pawane, Turbhe, Bonsari, Kukshet and

Sirvane in Navi Mumbai.

"Considering the potential rise in demand for housing on the back of the upcoming international

airport and various other projects here, we have undertaken this massive housing development

project," it said.

_________________________________________________________________



Link https://content.magicbricks.com/property-news/mumbai-real-estate-news-industry-news/cidco-to-build-over-2-lakh-homes-under-pmay/108736.html

UP-RERA to auction unsold flats of defaulting builders to refund

buyers

While Rera benches have taken several steps against defaulting builders across the

country, this is perhaps the first time that such a move has been announced in India under

the new real estate law.

In a major relief to lakhs of aggrieved buyers who are forced to wait for possession of their

homes for years, the Uttar Pradesh Real Estate Regulatory Authority (UP-Rera) has decided to

auction unsold flats of defaulting builders to pay back investors seeking refund in delayed

housing projects.

While Rera benches have taken several steps against defaulting builders across the country, this

is perhaps the first time that such a move has been announced in India under the new real estate

law.

Officials said UP-Rera will soon float a portal for the global e-auction of unsold properties of

cash-strapped builders who have been issued recovery notes. A recovery note is a notice sent by

Rera that seeks a refund of money owed by homebuyers.

―When a buyer approaches UP-Rera to seek a refund on their investment, we issue an order for

a refund and the district administration is sent a recovery note to collect the money from the

defaulting builder. But because most of the builders are cash-strapped, the notes are not

honoured,‖ Balwinder Kumar, member of UP-Rera, told TOI.

―None of the 660 recovery notes sent to the builders through the district administration in

Gautam Budh Nagar has been honoured by the defaulters. So, we have now decided to auction

unsold inventories of such builders to return the money to the aggrieved buyers stuck in delayed

projects, should they want it back,‖ he added. With this move, all builders against whom buyers

have moved UP-Rera stand to lose their unsold inventory for refunding buyers who want to exit

the delayed projects.

―There are two kinds of refunds — one where a builder has not been able to deliver the flat and

the buyer wants to exit the project. The other one is where the builder has promised penalties

for delay but has not paid any late fine to buyers. In both the cases, the money accrued from the

auction will be used,‖ Kumar said.

Homebuyers have welcomed the decision by UP-Rera. ―This would prove hugely beneficial for

such buyers who do not want to stay invested in a delayed project,‖ said Abhishek Kumar,

president, Noida Extension Flat Owners Welfare Association (Nefowa).



Link https://realty.economictimes.indiatimes.com/news/regulatory/up-rera-to-auction-unsold-flats-of-defaulting-builders-to-refund-buyers/71211024

However, lawyer Kumar Mihir said, ―Though UP-Rera has full authority to initiate such an

auction, the auction of these unsold flats will only be successful if the reserved price is lower

than the market price listed by the builder.‖

―Secondly, the auction method can destabilise the market prices of apartments in the vicinity

and the builders may object to this order. The reserve price can only be set after UP-Rera

appoints a valuer for these unsold inventories. Anyway, the auction will not affect banks as

banks fund full projects and buyers get bank loans for individual units.‖

________________________________________________________________

Fosun Group invests Rs 800 crore in realty venture with Ahuja

Constructions

This is not only Hong Kong Stock Exchange-listed Fosun's maiden real estate deal in

India, but it also kicks off the Chinese developers' activity in the country's burgeoning

property sector.

In its first realty transaction in India, Chinese investment conglomerate Fosun Group has

acquired majority stake in a property development platform it has formed with realty

developer Ahuja Constructions for 800 crore with an option to further its investment going

forward, said persons familiar with the development .

This is not only Hong Kong Stock Exchange-listed Fosun's maiden real estate deal in India, but

it also kicks off the Chinese developers' activity in the country's burgeoning property sector.

The deal also assumes significance since it is a pure equity transaction and the group plans to

invest up to 2,500 crore into this new entity over the next 3 years.

Chinese property majors including Wanda Group, Country Garden, China Fortune Land

Development Co (CFLD), and Fosun Group have been actively eyeing opportunities in India

over the past couple of years. However, they have not been able make headway due to the

inability to get access to their preferred large-size projects and other issues.

"Out of a total 800 crore, Fosun will invest 400 crore in the first tranche in this platform for

ongoing operations and two new acquisitions in Mumbai's Malad and Chembur locality," said

one of the persons mentioned above. "The joint platform would raise finances through sales,

and if necessary, debt."

With this alliance, Fosun and Ahuja Constructions will work on an expanded business

philosophy by creating new business verticals such as offices, retail, logistics apart from

existing residential development. The new entity is also looking to take advantage of the

ongoing sluggish business environment in the real estate sector and has aggressive plans to

acquire projects in the next 8-12 months.

"Ahuja Constructions' expertise in slum rehabilitation and affordable housing projects apart

from society redevelopments and land acquisition has proved to be a solid appeal for Fosun to

conclude this deal," said the second person mentioned above.

Fosun has been working on its plan to gain a toehold in India's real estate for some time now

and has been looking for a partner with expertise in these areas. The Shanghai-headquartered



Link https://realty.economictimes.indiatimes.com/news/industry/fosun-group-invests-rs-800-crore-in-realty-venture-with-ahuja-constructions/71211158

company is making this investment through its real estate arm Fosun Hive.

A part from the Mumbai property market, Fosun is also looking at such acquisition and alliance

opportunities in Bengaluru and the National Capital Region (NCR).

Apurva Muthalia, MD (India) of Fosun Hive, declined to comment on the story. Gautam Ahuja,

MD, Ahuja Constructions, confirmed the transaction without spelling out the details.

Ahuja Constructions is bringing its large affordable housing and slum rehabilitation projects

into this platform. The company has 10 million sq ft space under construction across total seven

projects including large projects in Bhiwadi and Ambernath near Mumbai, prominent city-

centric and suburban space projects in Mumbai's Worli, Pali Hill, Sion, Oshiwara and Malad

areas.

According to industry experts, the projects in Mumbai's peripheral areas such as Ambernath and

Bhiwandi are expected to provide the volume, while city-centre projects in prime locations such

as Worli, Sion, Oshiwara and Bandra's Pali Hill will offer high value to the platform.

Fosun Group is amongst China's largest privately-owned investment conglomerates with

interests across pharmaceuticals, real estate, financial services, infrastructure and hospitality and

it has formed such platforms in Japan, South America and Europe. In one of the biggest

acquisitions in India, Fosun Group had picked up controlling stake in Hyderabad-based Gland

Pharma in 2017 for over $1 billion.

________________________________________________________________

Surat civic body identifies over 230 risky buildings

The Surat Municipal Corporation (SMC) has categorized 239 properties, both private and

public, as risky, looking at their dilapidated condition which threaten to collapse any time.

The Surat Municipal Corporation (SMC) has categorized 239 properties, both private and

public, as risky, looking at their dilapidated condition which threaten to collapse any time.

While it has also chalked out fresh blue print to deal with such properties to minimize loss of

life, there are several cases where convincing occupants to vacate these premises is the most

challenging task.

Harassed by these obstructing factors, SMC has of late begun disconnecting water and sewerage

connections in some cases. Majority of these dilapidated buildings are located in the central

zone.

Municipal commissioner Banchhanidhi Pani said, ―In a few of these properties, we have

initiated vacating the premises with the local police.

In some others, we have issued stern notices asking the residents to begin repair work within a

stipulated period of one month and produce structural stability certificates too.‖

He further said that the civic body does this in good faith to minimize risk of loss of human life

and also avoid legal fracas.

In the case of a few properties, local political and other types of pressure had prevented lower-

rung officials from performing their duties.

Ketan Patel, deputy commissioner, SMC said, ―In majority of these dilapidated building cases,

it is always for the residents’ good that structure is renovated or made again.

The life of the structure increases and human safety principal is also paramount.‖

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/regulatory/surat-civic-body-identifies-over-230-risky-buildings/71200167

SC rejects plea against Bombay HC's ruling on SRA towers near

IAF base

The project comprising nine 11-storey towers of 40.45 m height each was launched in

March 2010.

A protracted legal tussle, which had badly affected the progress of a mega housing project

under the Slum Rehabilitation Authority (SRA) scheme near the Lohegaon air base, has finally

ended.

The Supreme Court on Monday dismissed a petition challenging the Bombay high court’s

ruling of May 3 that upheld the validity of the Ministry of Defence’s no objection certificate

(NOC) issued on January 12, 2016, to the SRA, Pune, for the project.

―No case is made out to interfere with the impugned order(s) passed by the high court,‖ the

Supreme Court bench of Justice Arun Mishra and Justice M R Shah ruled. ―The special leave

petition is, accordingly, dismissed. Pending application(s), if any, shall stand disposed of,‖ the

SC order stated.

The project comprising nine 11-storey towers of 40.45 m height each was launched in March

2010. But only four buildings have been completed so far because of the now-stop-now-start

progress caused by the litigation in the HC and the SC at different points in time. (see box)



Link https://realty.economictimes.indiatimes.com/news/regulatory/sc-rejects-plea-against-bombay-hcs-ruling-on-sra-towers-near-iaf-base/71198261

―We have resumed construction work after the high court’s May 3 ruling. We now hope to

complete and hand over the project to the SRA over the next one-and-a-half years,‖ Sachin

Agarwal, director of Raviraj Realty, the developer, told TOI on Wednesday.

―Construction work relating to the remaining seven buildings is at the plinth stage,‖ he added.

The petitioners had claimed before the HC that the project fell within 100m from the crest of the

outer parapet of the Lohegaon Air Force Station (AFS) and posed a security concern to the air

base. Besides, the NOC was issued in violation of the defence ministry’s own notification of

March 3, 2007, and other circulars prohibiting construction within the 100m area, they said.

In its May 3 ruling, the HC observed, ―It appears that there were surveys of the proposed

construction on the said land which were conducted by the AFS, Lohegaon, and a private

agency employed by Respondent No 9 (developer). Thereafter, there was a joint survey by the

AFS, Lohegaon, Pune and the SRA, conducted after issuance of the impugned NOC.

It said, ―All these surveys were unanimous in observing that the construction activities of the

developer on the said land are beyond 100m from the crest of the parapet wall of the AFS and

thus not prohibited by the notification of 2007.‖

The HC observed, ―As against this, the petitioners have not conducted any survey of the

construction activities of the developer and thus it is clear that the petitioners have no basis for

stating that the construction activities of the developer on the said land were situated within

100m from the crest of the parapet wall of the AFS.‖

It added, ―We are of the view that the power to issue the NOC has been validly exercised by the

Ministry of Defence under Section 9A of the Aircraft Act, read with the relevant notification

issued on January 14, 2010.‖

________________________________________________________________

Jaipur's PRN colonies to be regularised by June 2020: Rajasthan

Housing Minister

He said, camps will be organised to regularise colonies in November and is expected to be

completed by June next year.

Urban development and housing (UDH) minister Shanti Dhariwal on Wednesday said that the

regularization of residential colonies in Prithviraj Nagar (PRN) will be completed by June next

year.

He was talking to reporters after a review meeting of previous government’s decisions of last

six months.

He said, camps will be organised to regularise colonies in November and is expected to be

completed by June next year.

Dhariwal said, by October this year, the review of the decision of the previous government

would be completed. The review meetings have been hampered by the delay in reply by the

respective departments.

―We have asked for brief note from all the concerned departments as studying all the files is

time consuming,‖ he said.

He said, on review of projects in the PHED held on Wednesday, some tenders were found to be

inflated. ―The committee has asked for explanation. Prima facie, it seems it was done to favour

the contractors. Detailed report has been sought in such cases,‖ he said.

The minister said, ―The committee overruled the objections of the water resources department

on the construction of a dam at Mej river, a tributary of the Chambal river at Lakheri in Bundi

district. The project would help to provide drinking water to several villages in the area. So, the

committee gave the green signal for the project.‖

Dhariwal said, to overcome the slump in the real estate sector, the department has given free

hand to the autonomous bodies like JDA and UITs to decide on auction price of land. Earlier,

many charges were added to the DLC rates.

Now, these urban development bodies have given freedom to decide on the tender price based

on the market conditions. They could decide the cost of land based on the expenditure required

for the development of the land, said the minister.



Link https://realty.economictimes.indiatimes.com/news/regulatory/jaipurs-prn-colonies-to-be-regularised-by-june-2020-rajasthan-housing-minister/71199152

He said, the housing societies flouting rules would be taken to task. Housing cooperative

societies are a special feature in Jaipur. Those societies flouting rules would not be spared, he

warned.

________________________________________________________________

Ludhiana civic body finalises rates to sell off its properties

However, committee members could not trace the lease record of a few educational and

medical institutes in the records of the civic body, so they will seek a decision from house

members.

The fund-strapped civic body will soon be able to sell off some of its prime properties for

starting development works in the industrial town, as the committee formed for fixation of price

to auction or sell properties finalised the rates on Wednesday in a meeting at Zone D.

However, committee members could not trace the lease record of a few educational and medical

institutes in the records of the civic body, so they will seek a decision from house members.

This committee was formed by mayor Balkar Sandhu to finalise the rates of properties and

revise lease rates in February.

The committee included officials from the building branch, and councillors — including Pal

Singh Grewal, Rakesh Prashar, Gagandeep Bhalla, Sarabjit Singh Laddi, Harjinderpal Lali,

Money Grewal, and Sukhbir Singh Dhillon.

The properties proposed for sale through open auction included shops inside the Indoor Stadium

at Pakhowal Road, MC land in Prem Nagar near Rose Garden, around 268.44 square yards of

land behind Kailash Cinema, vacant shops in Bairing Market, shops from Raikhy Cinema

Chowk to government school, and vacant land adjoining Master Tara Singh College.

However, a few prime lands were given on lease to various organizations and educational

institutions at very nominal rates, but now authorities wanted to revise the rates.

These proposed sites included Kundan Vidya Mandir, Arya College, Krishna Charitable

Hospital, Khalsa Education College, and Dharam Seva Trust in Jawahar Nagar, but for these

places, the officials could not trace the lease documents, so it will now go to the house for the

decision.

Meanwhile, Rakesh Prashar, one of the committee members claimed that after verifying all the

facts, the committee members have finalised rates, which will go to the house members for a

final decision on whether the rates were fine, or whether there should be any changes in it.

However, MC’s assistant town planner (Headquarters) SS Bindra said earlier, the prices which

were proposed in the meeting were low, so committee members had asked for current market

prices. He said they would put up their report with mayor Sandhu and MC commissioner KP

Brar.



Link https://realty.economictimes.indiatimes.com/news/industry/ludhiana-civic-body-finalises-rates-to-sell-off-its-properties/71199964

Notably, financial paucity has forced the civic body to sell its prime properties through open

auction or shops which were given on lease, and rent on a very low basis will be sold only to

tenants. The officials claimed it would help bring some money for various development works.

________________________________________________________________

Two months on, Punjab’s policy for bailing out stalled realty

projects a flop

Experts held liquidity crunch and burgeoning debt of stalled projects as the key reasons

for no promoters showing interest in joining hand with existing projects.

The Punjab government’s policy to bail out stalled realty projects by allowing proprietors to add

promoters has turned out to be a damp squib.

The state government on July 17 had notified the policy, paving way for addition of a maximum

of two promoters to existing projects registered under the Punjab Apartment and Property

Regulation Act.

However, even after two months, the policy has not evoked any response.

Experts held liquidity crunch and burgeoning debt of stalled projects as the key reasons for no

promoters showing interest in joining hand with existing projects.

There are about 100 small colonies licensed under the Punjab Apartment and Property

Regulation (PAPR) Act, 1995, which are stuck due to non-payment of external development

charges (EDC) and license fee to government.

In all, 21 colonies registered with Greater Mohali Area Development Authority (GMADA)

alone owe the government over Rs 146 crore. Another defaulting 21 mega real-estate projects

have to clear dues to the tune of Rs 658.37 crore.

For Kulwant Singh, chairman of realty giant Janta Land Promoters Limited (JLPL), the poor

response has not come as a surprise. ―The sector is facing an acute liquidity crunch. In addition,

there are many stuck projects with heavy liabilities. Under these circumstances, finding

promoters to bailout stalled projects is going to be a difficult task,‖ said Kulwant Singh.

Expressing displeasures over government framing the policy without consulting them,

proprietors termed the norms for including additional promoters in stalled projects as rigid.

Gulshan Kumar, vice-president of Punjab Colonizers and Dealers Association, said

policymakers did not take into account the ground reality.

―The government should take stakeholders in confidence before framing any policy. Had the

government consulted us, we would have given inputs for making the policy beneficial for both

government and developers,‖ said Kumar.



Link https://realty.economictimes.indiatimes.com/news/industry/two-months-on-punjabs-policy-for-bailing-out-stalled-realty-projects-a-flop/71198030

For injecting new lease of life in the real-estate sector, Kumar said the government should

waive levies like external development charges (EDC) and license fee, on pattern of other

states.

The state government charges promoters EDC at the rate of Rs 27 lakh per acre and license fee

of Rs 3 lakh per acre for residential plotted colony. For group housing, they are charged Rs 87

lakh per acre as EDC and Rs 3.75 lakh per acre as license fee. In cases where group housing

falls in area for which master plan is not notified, the promoter is charged double the rate

prescribed for residential plotted development.

No reply to policy on outstanding dues either

The state government’s move to provide relaxation to private builders in recovery of

outstanding dues has failed to yield any result.

The government, in last two months, had notified two separate, open-ended moratorium

policies, paving way for developers to set their projects – both residential and commercial –

rolling by clearing outstanding dues in easy installments.

No defaulting developer has so far come forward to clear their dues. Under the scheme,

defaulting promoters had to pay 20% of the pending amount upfront, while the 80% of the

defaulted amount was to be recovered in six quarterly instalments over 18 months.

________________________________________________________________

SBI withdraws repo rate linked home loan scheme

Further, the bank removed details of the repo-rate linked loan scheme from its website

about a week ago.

The country's largest lender, State Bank of India (SBI), has withdrawn the repo-rate

linked home loan scheme that it launched in July.

The bank stated this on its official Twitter handle where it was responding to a customer's query

on migrating to the repo-rate linked home loan scheme.

"Kindly note that RLLR based home loan scheme have been withdrawn. You can get the home

loan migrated to MCLR based home loan," stated the tweet.

Further, the bank removed details of the repo-rate linked loan scheme from its website about a

week ago. As of now, the bank is lending only on marginal cost-based lending rate (MCLR).

Will SBI launch a new scheme?

It is expected that the bank will introduce a new loan scheme with interest rate linked to

external benchmark by October 1, 2019. The Reserve Bank of India has mandated all banks to

offer loans with interest rates linked to external-benchmarks from October 1, 2019. These are:

1) RBI's repo rate

2) Government of India 3-month treasury bill yield

3) Government of India 6-month treasury bill yield

4) Any other benchmark market interest rate published by the Financial Benchmarks India

Private Ltd

Therefore, in order to comply with the RBI diktat, SBI is bound to launch a new loan scheme on

these lines. Additionally, it may be mentioned that it was the first PSU bank to launch a loan

scheme with interest rate linked to an external benchmark which was the repo-rate.

SBI's old repo rate linked home loan scheme

It may be recalled that SBI was the first bank to launch a repo-rate linked loan scheme back in

July. The bank had introduced repo-linked lending rate for home loans from July only for new

customers. The Economic Times had also reported that the bank was mulling offering repo-rate

linked home loans for existing borrowers as well.

"SBI's repo-linked lending rate (RLLR) had a 2.25% mark-up over the repo rate, which was



Link https://realty.economictimes.indiatimes.com/news/allied-industries/sbi-withdraws-repo-rate-linked-home-loan-scheme/71202775

5.40% at present. So, RLLR was 7.65%. Then there was a spread of 40 basis points and 55 bps

above the RLLR. So, new borrowers could avail themselves of home loans from SBI at 8.05%

or 8.20% per annum," said another Economic Times news report. These rates were effective

from September 1, 2019. One basis point is equal to one-hundredth of one percent.

After SBI, many other public-sector banks have launched repo-rate linked loan products. These

include Bank of Baroda, Syndicate Bank have followed suit, while other PSBs like Union Bank

of India, Canara Bank, Central Bank of India and Allahabad Bank have announced plans to

launch such products.

Clarifications sought by SBI

BI's chairman, Rajnish Kumar has said that the bank is seeking clarifications from RBI on

whether it can offer long-term home loans with fixed rates in the beginning and convert the

same into floating rates later, PTI reported. "There is a lack of clarity on how the bank can go

ahead with the fixed rate products, after the RBI's new regulations on floating rates."

Kumar also said that some home buyers may want their loan rates to be fixed. "For such buyers,

it can offer a 'fixed-floating' product, wherein the rates are locked in for an initial period of say

five to ten years, and then turns floating," he added.

With October 1 just around the corner, we will have to wait and watch to see what kind of

external benchmark linked loan product the country's largest lender will come out with now.

________________________________________________________________

Soon, a housing repository portal for Visakhapatnam civic body

Once the working prototype of the portal is ready and approved by the officials, it will be

expanded and replicated in other urban local bodies of the country.

The Union ministry of housing and urban affairs has appointed a team of four fellows under the

India Smart Cities Fellowship-2019 to Visakhapatnam to develop a housing data repository

platform for the Greater Visakhapatnam Municipal Corporation.

Once the working prototype of the portal is ready and approved by the officials, it will be

expanded and replicated in other urban local bodies of the country.

The team includes Harveen Kaur (environment and sustainable development specialist), Empati

Uday Kumar (urban planner), Akshay Atreja (electrical engineer) and Amit Varma (housing

planner).

The four-member team is currently in Visakhapatnam and working with the GVMC.

The team has been meeting different stakeholders, including housing domain experts, municipal

officials and IT experts to build the platform. Head and director of School of Planning and

Architecture, PSN Rao is the mentor of the team.

Speaking to TOI, Harveen Kaur said their team ASHA (Affordable and Sustainable Housing

Aggregator), which is a sub-group of India Smart Cities Fellows, has been working on housing-

related issues and aspects of Smart Cities.

―We are currently developing a housing data repository platform. This will act as a key resource

for effective future urban planning, monitoring and decision making for urban local bodies

(ULBs). It is expected to help understand the demand for housing and identifying developable

areas in cities. All the team members are focusing on different areas of the system like building

approvals and permissions, power, education, transport, finance, water etc. I am particularly

focusing on environment, health and disaster management related components,‖ said Kaur.

The team has selected Visakhapatnam as their first pilot city as part of their fellowship; when

asked why they chose the city, Kaur said the diversity of the city made them chose it.

―The city also has an integrated command and control centre for better administration. We

carried in-depth discussions with different departments and stakeholders to understand

initiatives of the government for the housing sector and data systems at the city level,‖ said

Kaur.

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/technology/soon-a-housing-repository-portal-for-visakhapatnam-civic-body/71194504

Housing construction in US jumps 12.3% in August 2019

The report from the Commerce Department on Wednesday also showed permits for

future home construction rose to levels last seen in 2007.

U.S. homebuilding surged to more than a 12-year high in August as both single- and multi-

family housing construction accelerated, suggesting that lower mortgage rates were finally

providing a boost to the struggling housing market.

The report from the Commerce Department on Wednesday also showed permits for future home

construction rose to levels last seen in 2007.

Housing and manufacturing have been the weak spots in the economy, which is now in its 11th

year of expansion, the longest in history.

The jump in homebuilding activity last month added to strong retail sales data in suggesting the

economy continues to grow moderately and is probably not flirting with a recession as has been

flagged by financial markets. A year-long trade war between the United States and China has

dimmed the economic outlook.

The Federal Reserve is expected to cut interest rates again on Wednesday to blunt the hit on the

economy from the trade tensions. The U.S. central bank lowered borrowing costs in July for the

first time since 2008.

"A prolonged period of lower mortgage rates has perhaps finally encouraged prospective

homebuyers to get off the sidelines," said John Pataky, executive vice president at TIAA

Bank in Jacksonville, Florida. "I'd like to see a couple more months of data like this before I'm

convinced the market's fortunes have really changed."

Housing starts jumped 12.3% to a seasonally adjusted annual rate of 1.364 million units last

month, the highest level since June 2007, the government said. Data for July was revised up to

show homebuilding falling to a pace of 1.215 million units, instead of decreasing at a rate of

1.191 million units as previously reported.

Economists polled by Reuters had forecast housing starts would advance to a pace of 1.250

million units in August. Building permits increased 7.7% to a rate of 1.419 million units in

August, the highest level since May 2007. Housing starts rose 6.6% on a year-on-year basis in

August.

The housing market, the most sensitive sector to interest rates, had until now shown few signs

of benefiting from the Fed's monetary policy easing, which has pushed down mortgage rates



Link https://realty.economictimes.indiatimes.com/news/industry/housing-construction-in-us-jumps-12-3-in-august-2019/71200543

from last year's multi-year highs. Builders had blamed the lackluster performance on land and

labor shortages.

A survey on Tuesday showed confidence among homebuilders rose in September, with builders

reporting solid demand for homes. But builders said scarce building lots and labor remained a

challenge and also noted that trade tensions, which have undercut manufacturing, were "holding

back home construction in some parts of the nation."

The 30-year fixed mortgage rate has dropped more than 130 basis points to an average of

3.56%, according to data from mortgage finance agency Freddie Mac.

Firmer demand for housing was underscored by a separate report on Wednesday from the

Mortgage Bankers Association showing applications for loans to purchase a home increased for

a third straight week last week.

The dollar was little changed against a basket of currencies as investors awaited the Fed's

decision and statement on interest rates. Prices of U.S. Treasuries rose.

Stocks on Wall Street were trading lower after package delivery company FedEx warned that

full-year earnings would miss analysts' estimates because of the U.S.-China trade war and the

fallout from its split with customer-turned-competitor Amazon.com Inc.

BROAD GAINS

August's robust homebuilding performance raised hopes that residential investment would

rebound in the third quarter after contracting for six straight quarters, the longest such stretch

since the 2007-2009 recession.

The Atlanta Fed lifted its third-quarter gross domestic product estimate by one-tenth of a

percentage point to a 1.9% annualized rate. The economy grew at a 2.0% rate in the April-June

quarter, decelerating from the first quarter's 3.1% pace.

Single-family homebuilding, which accounts for the largest share of the housing market,

increased 4.4% to a rate of 919,000 units in August, the highest level since January. Single-

family housing starts increased in the West, Midwest and the populous South, but fell in the

Northeast.

Permits to build single-family homes vaulted 4.5% to a rate of 866,000 units last month, the

highest since July 2018. Permits, however, continued to lag housing starts, suggesting limited

scope for a strong rise in single-family homebuilding in the coming months.

Starts for the volatile multi-family housing segment soared 32.8% to a rate of 445,000 units in

August, reversing the prior two months' declines. Though rental inflation has slowed in recent

months, economists do not expect the trend to continue as rental vacancy rates remain low.

Permits for the construction of multi-family homes increased 13.3% to a rate of 553,000 units

last month.

Despite the surge in both starts and permits in August, housing shortages will likely persist and

keep prices elevated.

Housing completions rose 2.4% to 1.294 million units last month. Realtors estimate that

housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per

month to close the inventory gap. The stock of housing under construction climbed 0.3% to

1.144 million units in August.

"The stock of new homes priced under $300,000, which is what half of new homebuyers need

before they can afford a purchase, continues to be low," said Robert Frick, corporate economist

at Navy Federal Credit Union in Vienna, Virginia. "And the pace of home building remains

significantly below historical averages."

________________________________________________________________

Documents

Sept 2019 - Credai Bengalcredaibengal.in/wp-content/uploads/2019/09/20Sept19-CB... · 2020. 2. 28. · philosophy by creating new business verticals such as offices, retail, logistics