MoU signed between Indian Green Building Council of CII and NHB to promote Green Homes

The Indian Green Building Council of CII signed a memorandum of understanding (MoU) with National Housing Bank to promote adoption of energy efficient green homes in the country. During the first edition of conference on green apartments, MoU was signed. According to CII, “The purpose of this MoU is to jointly enhance and promote the adoption of energy efficient and green homes concept in India”.

The MoU signed in presence of Arun Kumar Misra, Secretary of the Ministry of Housing and Urban Poverty Alleviation. The MoU was inked between Chairman of IGBC Prem C Jain and NHB Executive Director Arnab Roy. Misra said going green is an imperative to ensure a sustainable tomorrow. He added, MoU inked on July 12 will go a long way in promoting green homes and facilitate India emerge as one of the global leaders in green buildings. He also said the Ministry would extend all the support to work with IGBC in taking forward the green home concept to the mass housing sector.

According to NHB Executive Director Arnab Roy,“NHB with the support of IGBC would offer the fund to home finance companies that are willing to transfer the benefit of concessional interest to buyers of green and energy-efficient homes”. Chairman of IGBC Prem C Jain said that the IGBC Green Homes is the first rating programme developed in India, exclusively for the residential sector. As many as 750 homes project in the country are already going green with IGBC accounting to more than 4,50,000 dwelling units with a building footprint of over 680 million square feet, he added.

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Monsoon session of Parliament will provide Real Estate Regulatory Bill

According to a top government official, the real estate regulatory bill will be introduced in the monsoon session of Parliament. The real estate regulatory bill that seeks to bring transparency and accountability in the realty sector is expected to be introduced in monsoon session of Parliament, which is expected to start in late July. At an annual convention of National Association of Realtors (NAR) India the Housing and Urban Poverty Alleviation Secretary said, “The Bill will be introduced in the Monsoon session of Parliament”.

NAREDCO, an industry body of real estate developers, President Naveen Raheja emphasized on the need of self- regulation. NAR-India is an industry body for property brokers and it has 1,700 members. They are affiliated to the national association of realtors (NAR), a global association based in Chicago, USA. According to Manish Mehta, Vice President of Property brokerage firm India homes, NAR-India is a national level umbrella organization, which initiates efforts to generate and disseminate authentic information on the realty market to increase transparency in the sector. The Bill provides for setting up a regulator for the real estate sector and has provisions like a jail term of up to three years for developers who make offences like putting up misleading advertisements about projects repeatedly. It also intends to make it mandatory for developers to launch projects only after acquiring all statutory clearances from relevant authorities. The Bill makes it mandatory for builders to clarify the carpet area of the flat.

Stating that the Bill deals with property brokers and agents as well, Misra assured the brokers’ body NAR that they would be included in the list of associations to be consulted by the Standing Committee. He asked the brokers to bring more professionalism in their business. According to the secretary, “All that the regulatory Bill says that when you start selling the flats, all the licenses and permissions should be in place”.

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Three more districts added in NCR

On July 1, the National Capital Region Planning Board (NCRPB) included Bhiwani and Mahendragarh districts of Haryana and Bharatpur in Rajasthan in NCR. The realtors’ apex body CREDAI on July 2 said that the inclusion of three more districts in the National Capital Region, would lead to additional supply of land for development. It also   cautioned that the government prepares a master plan for development of the region or else builders will start accumulating land, leading to rise in prices. According to CREDAI NCR President Anil Sharma, “It is a futuristic decision with vast ramifications for NCR region. Reports foresee almost 11 per cent increase in urbanization of this area by 2021 and to reduce the pressure on Delhi, there was urgent need to expand the area”. He also added that as land is in short supply, it was essential to expand the area to meet the future housing needs. Nevertheless, he cautioned that merely adding these areas to NCR would not serve the purpose unless infrastructure is developed in a rapid and planned manner. According to him, “The decision should be followed up with preparation, and implementation of Master Plan as soon as possible otherwise builders will start accumulating land, leading to speculative price rise”. However, the property consultant said there would not be any immediate impact on the property market of NCR. According to Jones Lang LaSalle India CEO (Operations) Santosh Kumar, “It’s a long term decision. There would be no immediate impact of this on the NCR property market. “More land parcel will come in the NCR. These districts would get central funds for infrastructure development. The connectivity of this region to the national capital will improve.” The consultant noted that builders might start buying land, but it is unlikely that project would be launched in this region.

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Delhi witnessing high demand for Multistorey buildings.

Delhi is witnessing a high demand for multi-storey apartments. Demand for multi-storey buildings in Delhi was recorded as approximately 53 per cent during the Feb-Apr 2013 period, a rise of 2 per cent from the Nov 2012-Jan 2013 period. The growing space crunch in the capital city could be the reason behind the demand for multi-storey units being the most preferred property type across all categories. Supply of multi-storey apartments remained subdued in comparison to demand. No fluctuations were witnessed in the supply of these units in the last six months with availability of 35 per cent, which was 18 per cent lower than the demand.

At 50 per cent availability, the most supplied property type was single floor units during the Feb-Apr 2013 period, a rise of 3 per cent from the Nov 2012-Jan 2013 period. However, the supply and buyer interest in the category remained low. Even though single floor units were the second most preferred property type in Delhi, demand was found to be a moderate 22 per cent only during the Feb-Apr 2013 period. This reflects an oversupply of more than 25 per cent in the market.

Both residential houses and plots witnessed average buyer interest with demand varying from 11-13 per cent during the Feb-Apr 2013 period. While demand for residential houses was found to be stable in the last six months, a drop of 2 per cent was noted in the demand for plots. Supply of plots remained significantly low with a gap of 7 per cent between the demand and supply, due to acute shortage of land in Delhi.

Supply for residential houses recorded a downward trend with availability dropping by 3 per cent during the Feb-Apr 2013 period as compared to the Nov 2012-Jan 2013 period. Demand and supply for villas remained low during the Feb-Apr 2013 period.

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Invest in IT corridors to reap Good benefits.

IT industry has a major role to play in the real estate sector of India, which is on a high growth path. The influx of IT set-ups across India has given a push to the demand and supply of residential as well commercial space in the country. However, consumers still face the dilemma of whether to invest in an IT-driven city or not. Kalpana Murthy, Associate Director, Residential Services, India, Cushman, & Wakefield explains how property investment in IT driven cities can fetch good returns. She took consumer queries on Magicbricks chat forum GuruTalk. The topic of discussion was ‘Investing in residential real estate in IT driven cities’.

Talking about non- IT cities such as Mumbai and Delhi, Murthy said, “These are very different markets. The increase in capital values has more to do with supply and locational advantages whereas, IT driven markets emerge and largely grow due to government policies, talent pool, subsidies and relocation & expansion strategies of IT/ITeS companies.”

“The advantages of investing in residential apartments along the IT corridor are significant for most of the IT driven markets. Focus on physical and social infrastructure attracts migration of families and talent pool specific to the IT industry and encourages corporate or IT companies to relocate and expand their establishments in such markets. This would enhance the increase in capital values for the investors and satisfy an end user with good amenities and living comforts,” explained Murthy.

Keeping a 3-5 year horizon, Gurgaon and Noida Expressway in Delhi NCR, Mysore in Bangalore and Hinjewadi in Pune are few locations that can get good return on investment, she said. However, she suggested that if the buying is for investment purpose, it is not an appropriate decision to invest in a higher land value location whereas, if the buying is for end use having the advantage of accessibility to work, it certainly makes sense.

Giving a last piece of advice to consumers, Murthy said, investing in IT corridors supported with government initiatives on infrastructure, development in the periphery of any city would be a good option for investment for end-users and investors both.

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Affordable Rental houses in Dwarka Sector-6

Dwarka Sector 6, one of the old sectors with mid-end residential segment continues to generate buyer interest. The majority of property here are on rent. In the last couple of years, the real estate market has changed remarkably in Dwarka. Prices have crossed the peaks reached before the economic slowdown. The Delhi Metro is one of the main factors pushing values in Dwarka, including Sector 6. Rise in capital values has led to an increase in the rental values in the locality. According to the data, the types of housing found in Sector 6 include Cooperative Group Housing, DDA flats, builder floor, and multi-storey apartments. Capital values for multi-storey apartments here are Rs 8,000-12,000 per sq ft. The rental values start at Rs 12 per sq ft and goes up to Rs 18 per sq ft depending on the size of the flat. Though rental values have seen a considerable rise in the past few quarters, the values still remain lower here than other sectors in Dwarka. Sector 6 is connected to Sector 5 and 7 through internal roads, and to the Dwarka Flyover through Road No 201. This road leads to easy connectivity to the airport. The domestic and international airports, office and business centers, and commercial hubs are in close proximity to this sector.

According to Rakesh Khatri, Proprietor, Kirti Realtors, “Its proximity to the capital city and the international airport gives it an edge over other emerging sectors. Plus the presence of Dwarka Sector 6 market, an existing commercial hub, two known schools – DAV Public School and JM International School are big draws for families looking for rented property”. He also added that, “An average increase of Rs 2,000 has been witnessed on property that is available for rent in Sector 6 compared to last year”. The sector sees demand from families and professionals who cannot afford the high rental values of Gurgaon and other premium sectors of Dwarka.

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Government Authorities buy DDA Flats in CWG Village on priority

DDA Flats in Commonwealth Games Village are given more importance by the government authorities. Government departments, public sector undertakings, autonomous bodies, and tribunals are set to buy around 600 plush Commonwealth Games Village apartments worth over Rs 2,500 crore from the Delhi Development Authority (DDA), as the authority seeks to populate the riverside colony where hundreds of homes, owned by the rich and famous, remain unoccupied since the 2010 Games owing to legal issues. In a public auction last year, DDA had raised around Rs 400 crore by selling 87 apartments where the highest bid was Rs 24,192 per sq ft, which the authority will now use as the benchmark price while selling the apartments, a senior official from the ministry of urban development said, requesting anonymity.

Most of the 87 apartments that were auctioned were bought by public sector banks and insurance companies — State Bank of India, HPCL, ONGC, Punjab & Sind Bank, Delhi State Cooperation Bank, Agriculture Insurance Cooperation of India, and National Insurance Company. Government bodies given priority to buy flats worth Rs 2500 crore in Commonwealth Village. Only a few went to private individuals who were outbid by government bodies. According to property listings on sites such as, the price of apartments in the complex is Rs 25,000 per sq ft while rates in nearby Mayur Vihar vary between Rs 18,000 and Rs 20,000 per sq ft.

Emaar MGF had barely managed to complete the 11-acre project with 1,168 apartments before the Games in October 2010 due to its financial troubles. DDA then had to step in and buy 333 apartments for over Rs 750 crore at an average rate of Rs 11,000 per sq ft to bail out the developer as well as ensure that the project gets completed in time for the Games. By this time, the developer had sold around 280 apartments to individual buyers.

Some of the prominent buyers include YC Deveshwar of ITC, Justice Vahanvati, cricketer Navjot Singh Sidhu, LK Advani’s son, danseuse Shovana Narayan, lawyer Rajiv Luthra, former finance secretary Ashok Kumar Jha, India’s ambassador to the US Meera Shankar and her husband Ajay Shankar (ex-DIPP secretary), among others. The value of the apartments has more than doubled since they were sold.

Post the Games, the project faced more trouble when it was alleged that Emaar MGF had deviated from the sanctioned plan, and had constructed 17 flats illegally. Since DDA did not give the project a final competition certificate, these 280 buyers did not get possession of their flats. Finally, last year, DDA started giving possession to apartment buyers but no one has moved into the complex yet. DDA had a total of 711 apartments in the village after it had bought 333 apartments to bail out the developer in 2009. Of these, 87 have been sold and the authority will now sell the rest.

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Commercial and Industrial Operations makes an area Real Estate Destination.

At a meeting organized by on Assessment of Consumer Demand, an interesting observation, which was made, is that employment generation and the industrial base of an area define its popularity as a real estate destination. According to Deepak Kapoor, Director, Gulshan Homz, “Look at any city, wherever commercial and industrial operations start, the need for housing is automatically generated”. Three industrial hubs namely; Bhiwadi, Dharuhera and Neemrana near Delhi, which rose from obscurity to becoming prominent real estate destinations was taken into consideration during the meet.

Bhiwadi is the fastest growing industrial town on the outskirts of Delhi, which is 55km from the Indira Gandhi International Airport. A prime industrial town of the NCR and Rajasthan, Bhiwadi has around 2,500 small, medium and large, industries including MNC industrial units. Bhiwadi is acquiring a name for itself as a real estate destination. Developers who have a presence here include Parsvnath, MVL, Ashiana, Jagriti Infrastructure, Kajaria, M Tech, etc.

Dharuhera is USP – proximity to Delhi-NCR and industries worth Rs 3,000 crore. The area also has a car plant of Honda Siel in Khushkhera, the SEZ of Reliance, the Japanese corridor and a railway corridor coming up. The area already has a cineplex, hospitals, schools, leading banks, and shopping malls. Leading developers tapping into Dharuhera’s huge potential are Raheja Developers, Parsvnath, Ansal API, M2K, Tivoli, SNG, and BCPLVardhman.

Multiple drivers propel Neemrana’s real estate growth. An investment of around Rs 21.5 billion is expected to flow in with the RIICO and Japan External Trade Organization joining hands for setting up of industrial units by several Japanese companies. These projects are expected to employ nearly 3,000 people. This has been a trigger for developers to build residential projects in the area. Rajasthan government’s Global City is being developed on 40,000 acres in Shahjahanpur-Neemrana-Behror area. This city will have a capacity to house one million people and will have a cyber city, a medicity, a knowledge city, an entertainment city, an SEZ city, a World Trade City, and a bio-diversity park.

Thus, an area becomes real estate destination with the growing industrial and commercial operations.

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Property Market is drived by Values and Rising Aspiration

Even the modest of families is encouraged to own a home by Globalization, a growing economy and awareness, and once invested probably look for a second one or upgrade to a superior abode. Another reason for the rise in demand for housing is the falling average age of homebuyers i.e. from 43 years in 1999 it dropped to 33 in 2010. This changing demographic profile is also transforming housing consumption patterns.

On Assessment of Consumer Demand held by, an interesting pattern in the aspiration levels of the consumer was observed at the Real Estate Dialogue (RED). As the spending power of the consumer grows, his aspiration increases. In a meeting Kumar Bharat, Director, BCC Infrastructure said, “The urge to buy and upgrade to a better lifestyle is upfront. With an increase in purchasing power, the consumer looks for a better environment; he upgrades from a colony to an apartment and then to a plotted development”. “We saw about 700 customers from Shamli, who wanted to upgrade to better facilities in Baghpat. We priced 3BHK units at Rs 45 lakh,” pointed out Bharat, who sold 1,400 units in the Bharat City project a few days from launch in Baghpat, about 18 km from the Delhi border. Better education, healthcare, and housing – all reflect a migration to a better lifestyle and quality of life. According to Neeraj Bansal of KPMG, “The world is evolving, so is consumer demand. A well-informed consumer today looks for value for money in his investments, and real estate forms a huge part of that investment”. According to Deepak Kapoor, Director, Gulshan Homz, “Employment generation and the industrial base of an area define its popularity as a real estate destination. The educated, service class opts for multi-storey apartments in gated communities for social growth”.

Until recently, a family’s status symbol was measured by the size of the house. However, high-income levels and aspirations are redefining the very concept of housing where the conventional per-square-foot rate does not apply. Instead, developers have to ensure the entire package, from the housing unit, amenities, significance of the neighbourhood, location and the social standing that comes with it.

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Steady price increase seen in micro-markets despite weak demand for Real Estate in the NCR market

for real estate in the NCR market, there has been a steady price appreciation in most of the micro-markets. Therefore, consultants feel that end users should not postpone their buying decision in the hope of a fall in the prices of real estate. The main reason behind the continued price rise is the supply constraint due to less number of launches of new projects. In fact, developers have kept a check on new launches in view of the weak demand. The liquidity crunch faced by developers is yet another reason for a slowdown in launches. Another reason for prices going up is the rising construction costs, which has prompted developers to increase the prices of new launches in markets like Noida and Gurgaon. According to Knight Frank report, Peripheral micro markets of Gurgaon, Noida, Greater Noida, Ghaziabad, and Faridabad have seen a steady increase in average prices during October-March of 2012-13 compared to the same period last year. According to the report, nearly 33,500 residential units were launched in October-March 2012-13, showing a dip of almost 31% compared to the first half of the financial year. Clearly, the dip can be attributed to the limited number of project launches, higher interest rates, and weakened consumer sentiments and confidence. Greater Noida is the only micro market that has shown an upward trend in sales, primarily due to a number of project launches in the affordable range. At the same time, the NCR residential market observed absorption of 33,200 units in the second half of 2012-13, showing a dip of about 12% compared to the same period last year. However, demand has remained stable compared to the first half of financial year 2013.

Since Noida is one of the most important markets in the NCR, with affordable and mid-segment housing options, the limited number of launches has influenced the overall demand. Faridabad is the only market to have shown stable demand compared to the second half of financial year 2013. Interestingly, developers appear to be keen to launch units in the affordable range; Greater Noida, including Noida Extension, which has emerged as a hub for the affordable range of houses. In fact, Greater Noida registered the highest number of launches in the second half of 2012-13, taking up about 50% of the total pie. Most of the project launches were in the price range of Rs 2,900-3,500 per sq ft.

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