Tough macro finally appears to be taking a toll on demand for residential property, which has held up relatively well over the past 1-2 years. Residential property absorption in 11 key cities (Source: Propequity)
fell 10% YoY/ 20% QoQ in 1QFY14. The absorption had grown 7% in FY13. Commercial absorption in April-May 2013 fell 5% YoY (FY13 : -20% YoY)
Residential price rises continue due to high cost inflation and developers’ inability to cut prices. Residential prices are up 13% YoY / 1% QoQ in key cities. However, the All India House Price Index (Source: RBI), which is a more reliable but less comprehensive indicator, shows a 2.1% QoQ increase in residential prices in 4QFY13. This is the slowest pace of QoQ increase since 4QFY09 (except 3QFY11) and seems to be pointing to some cooling off in the pace of price rises at the margin. Commercial rentals remain flat YoY despite high inflation due to oversupply in most parts.
Wednesday, August 28, 2013
Monday, August 19, 2013
LoopHoles for Corruption in Real Estate Regulatory Bill of India
Atleast Half of the Members of Indian Parliamentary Democracy have Solid Criminal Background and Cases who are framing the Laws / Policies for the Civilized and Law Abiding Citizens. The Thugs in Indian Parliament stand united to overturn a Supreme Court Verdict banning Citizens with Criminal background from contesting in Elections. These Thugs are so united that they have left lot of holes in the Proposed Real estate Regulatory Bill and we highlight the same.
States have substantial leeway in deciding several key issues like the rate of interest payable by the developer, form and particulars of agreement, the details to be published and maintained on the regulator’s website, while the centre will only have an advisory role. This will lead to lack of consistency across states and dilute the power of the centre. [Give State Govt Money and they will make it favorable to Developers]
The bill has a provision of extension of delivery timelines of projects in case of delays. The developer is required to simply apply to the regulatory authority for the same. This provides the developers a leeway in delaying project deliveries. [Give Money and Seek Extension while leaving the Consumer at the Receiving End]
The bill has not stated the procedures and flexibility of changes in project plan post launches. Change in number of units or sizes are not dealt with in this act. The treatment of such changes is a key monitorable [Extortion from Builders by Political Thugs]
Though the mission of this Publication is to report on the Real Estate Developments in India, it is evident on How your Political Masters are functioning without any concern for the Citizen. So you decide who you should elect & who should frame laws for you, henceforth.
States have substantial leeway in deciding several key issues like the rate of interest payable by the developer, form and particulars of agreement, the details to be published and maintained on the regulator’s website, while the centre will only have an advisory role. This will lead to lack of consistency across states and dilute the power of the centre. [Give State Govt Money and they will make it favorable to Developers]
The bill has a provision of extension of delivery timelines of projects in case of delays. The developer is required to simply apply to the regulatory authority for the same. This provides the developers a leeway in delaying project deliveries. [Give Money and Seek Extension while leaving the Consumer at the Receiving End]
The bill has not stated the procedures and flexibility of changes in project plan post launches. Change in number of units or sizes are not dealt with in this act. The treatment of such changes is a key monitorable [Extortion from Builders by Political Thugs]
Though the mission of this Publication is to report on the Real Estate Developments in India, it is evident on How your Political Masters are functioning without any concern for the Citizen. So you decide who you should elect & who should frame laws for you, henceforth.
Provisions and Impact - Real Estate Regulatory Bill
The Real Estate (Regulation and Development) Bill of India, 2013 that was tabled in Rajya Sabha on 14th August, 2013 has been referred to a standing
committee for discussion and review. Our analysis on the draft bill indicates that it is an important step forward to promote consumer
awareness and bring in transparency.
We do an Analysis on the Provisions and the Impact as below.
No developer shall offer area for sale in any real estate project, without registering the project with the Real Estate Regulatory Authority. Impact Ban on pre-launch sales will reduce the ability of the developer to accelerate cashflows and also undertake newer projects. Hence, it will lead to reduction in supply. It would also affect investor demand negatively.
Mandatory for a developer to maintain a separate bank account for every project to ensure that the money raised for a particular project is not diverted elsewhere. Developers would have to keep aside 70 percent, or below, as prescribed by the authority. Impact As the percent to be kept aside is to be prescribed by the concerned state authorities, it will vary on a state to state basis.
Developers will be barred from collecting money from buyers before obtaining all necessary permits to start construction on the project. Builders cannot take more than 10 percent of the advance from buyers without a written agreement. Impact As the 'written agreement ' is to be defined by the relevant states, the need of a registered agreement may be circumvented.
We do an Analysis on the Provisions and the Impact as below.
No developer shall offer area for sale in any real estate project, without registering the project with the Real Estate Regulatory Authority. Impact Ban on pre-launch sales will reduce the ability of the developer to accelerate cashflows and also undertake newer projects. Hence, it will lead to reduction in supply. It would also affect investor demand negatively.
Mandatory for a developer to maintain a separate bank account for every project to ensure that the money raised for a particular project is not diverted elsewhere. Developers would have to keep aside 70 percent, or below, as prescribed by the authority. Impact As the percent to be kept aside is to be prescribed by the concerned state authorities, it will vary on a state to state basis.
Developers will be barred from collecting money from buyers before obtaining all necessary permits to start construction on the project. Builders cannot take more than 10 percent of the advance from buyers without a written agreement. Impact As the 'written agreement ' is to be defined by the relevant states, the need of a registered agreement may be circumvented.
Subscribe to:
Posts (Atom)