ICCPL PROPERTY NEWS

POST GST ERA’S FIRST RATE CUT

     With the Goods and Services Tax (GST) completing its first month of operations, today’s RBI bi-monthly policy review offered a huge sigh relief as the apex bank cut down the Repo rate by 25 basis points, bringing it down to 6 percent from 6.25 percent previously. Riding high on the decreased inflation for the last couple of quarters, a rate cut was pretty much on the cards today. This review by RBI was the third for this financial year 2017-18 and fourth for the running calendar year.

    After today’s monetary review, Repo rate drops to 6 percent, Reverse Repo rate reduced to 5.75 percent from 6 percent, Marginal Standing Facility (MSF) adjusted at 6.25 percent, Cash Reserve Ratio (CRR) remains unchanged at 4 percent and Statutory Liquidity Ratio at 20 percent respectively. Real estate sector in particular was in dire need of a rate cut as the buyers are waiting for the home loan rates to come down further and developers are gearing up to offer the benefit of the input tax credit to them. The overall prices or the impact of the cost on the buyers is projected to come down because of GST, and interest rates are expected to be dropped by the banks, the combined effect of which will be fruitful for the sector. With the festive season fast approaching in a month’s time, today’s rate cut will allow the banks to pass on the benefit to the customers soon which will result in greater footfall in the months to come.

Industry Reacts:

Abhishek Bansal, Executive Director, Pacific Group

Inflation is recording new lows with the last two quarters, observing a great feat. The stock market on the other hand is achieving greater heights, thus signalling a strong market response and getting ready for the long run. Today’s rate cut will only add more weight to the sentiments and push the customers to move towards investments where real estate sector will greatly benefit. As GST is settling down and RERA gaining momentum, real estate sector is projected to become the investment hub very soon.

Avneesh Sood, Director, Eros Group

Implementation of GST has completed its very first month and a great response can be already observed as the buyers’ queries are increasing day by day. A rate cut at this moment will boost these sentiments further where footfalls and conversions are bound to increase. Final festive season of this calendar year is nearing and this rate cut can allow the banks to cut down on their lending rates further. Economy is shaping up well with a growth trajectory becoming visible for the real estate sector as well.

Gaurav Gupta, General Secretary CREDAI-RNE & Director, SG Estates

Indian real estate market is moving strong towards a new era where GST and RERA are leading the way from the reforms front. Pricing, on the other hand remains a vital player for Indian consumers and any dip there is inversely proportional to the demand for property. A reduction in Repo rate today, happening after October 2016, will push the banks to further reduce the lending rates. With transparency increasing in the sector, the low pricing factor will help boost the property demand and further clear the inventory in macro real estate regions.

Deepak Kapoor, President CREDAI-Western U.P. & Director, Gulshan Homz

The realty sector welcomes the repo rate cut by RBI today which is further expected to fuel the demand as the EMIs are expected to fall even more. This rate cut has come at a time when GST and RERA have entered in to a settled phase and the sector is observing a transition where the buyers are increasing their activity and developers eagerly waiting to satisfy the demand. GST’s input tax credit feature coupled with lowered EMIs will further reduce the burden off the buyers and pave way for strong demand-supply matrix in the sector.

Rakesh Yadav, Chairman, Antriksh India Group

The sector was hopeful for a rate cut today and after almost 9 months, RBI has decreased the key rate by 25 basis points. Banks must follow suit in order to pass on the benefit to this sector’s customers. This rate cut has happened in the post GST and RERA era, where customers are looking towards a much transparent and simplified sector where any fall in the cost to the buyers will further enhance the demand for property.

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ICCPL PROPERTY NEWS

FUND RAISING GAINING POPULARITY AMONGST NCR DEVELOPERS

   Off late, the Indian realty sector has started to move towards becoming more and more organised as we see it getting stronger towards the reforms front. With RERA’s inception in the sector and majority of states making it operational, investors’ and buyers’ sentiments has started to pick up pace. With the input tax credit to be passed on by the developers to its customers, the post GST real estate sector is expected to bring about a fresh series of demand in the next few months. Government’s plan for Affordable Housing, Smart Cities, AMRUT, Housing for All and other infrastructural advancements drifts our focus towards better regulated realty sector. In a nut shell, the realty sector in India is looking at a much needed revolution which was long awaited, and in near future, we will witness a major revamp that is projected to benefit the economy in the long run.

India’s northern part of real estate is majorly contributed by the National Capital Region (NCR) which accounts to one of the biggest realty markets in the country. Districts from Uttar Pradesh, Haryana and Rajasthan, along with the NCT of Delhi constitute towards the NCR region. NCR being a prime contributor for Indian realty, there is a huge chunk of professional developers and builders in the region working towards developing residential and commercial projects. All the NCR states have made RERA applicable with only Haryana left to make the website operational.

With GST and RERA now in place, activity on the buyer and investor front has amplified. Positive sentiments are floating as customers are looking towards real estate as an investment avenue with market now looking more transparent with the promise of delivery. As sentiments gain momentum, developers are gearing up to launch more projects and deliver the ones in pipeline.  This thrust is leading the developers towards quick completion of projects and launch new ones. “RERA and GST are aimed at simplifying the real estate buying, taxing and redressal processes which will directly benefit its stakeholders. These reforms will act as long term catalysts as we see the developers raising funds to launch new projects and finish those in final stages”, explains Kushagr Ansal, Director, Ansal Housing.

Recently, real estate company Sikka Group had raised  Rs. 230 crores from a leading Indian bank for three of its housing projects Sikka Karnam and Sikka Kaamna in Sector 143 on Noida Expressway, and Sikka Kimaantra in Sector 79 in Noida. The amount raised is to be utilised towards speeding up the construction of these projects.

In a similar manner, realty firm Gulshan Homz has initiated the investment of Rs. 400 crores to develop two of its projects, ‘Gulshan Bellina’ in Greater Noida West and ‘Gulshan Botnia’ in Sector – 144 along the Noida Expressway. The company had recently launched Gulshan Botnia and had earlier launched Gulshan Bellina which will offer a total of 1892 units. Another Noida realty major, RG group had raised Rs. 170 crores from a private equity firm for its housing project in Noida, ‘RG Residency’ and clear its dues to the development authority. Very soon, NCR based developer, Paramount Group is expected to raise funds towards speeding up the completion of one of its ongoing residential projects which is already running ahead of its schedule.

“Project launches had dipped last year, and due to the implementation of RERA and GST, is quickly gaining pace again. As these reforms settle in, market will respond soon and will observe better stakeholder interest”, avers Vikas Bhasin, MD of Saya Group. In a recent example of fund raising for project launches, leading financial investor KKR had committed to invest Rs. 200 crores in NCR based affordable housing player Signature Global. The company had also launched two affordable housing projects in Gurugram primarily, ‘The Millenia’ in sector – 37D and ‘Solera 2’, in Sector 107. The projects would also be coming up under the Haryana Affordable Housing Policy like their previous projects.

In Noida, realty firm Gaursons Group, which has been into development of residential and commercial projects in Delhi/NCR, has planned to invest Rs. 150 crores to develop two luxurious towers called ‘Gaurs Platinum Towers’ as the company expects better demand for luxurious dwellings with the decrease in supply in the segment. The company’s recently launched twin towers will have a total number of 52 residences with 26 units in each tower with state of the art facilities and amenities.

With the market gaining momentum and buyers getting in the mode of investment, real estate sector in India is projected to perform better than ever with a regulator sitting in each state to monitor all the activities. With the festive season of this year just a month away, buyers are also gearing up to invest in the era of Indian real estate.