Budget 2016 – Great For Affordable Housing Sector

The budget has been published with much furore and the real estate sector had many wishes and the finance minister also tried to help the sector which is evident in the budget proposals say the experts. Overall the budget seems to have been growth oriented and progressive. The reasons are many along with the striking factor that the budget points out is that the spending is proposed to be hiked by a startling 23 percent. This certainly indicates that it is proposed to usher in many activities and investments in the sector. Along with the way the government was going in boosting the housing sector especially the affordable housing sector and the measures like the REIT and the mobilization of funds this budget seems to have been an extension in these efforts. The experts and the trend watchers opine that this budget has been geared for the common good and the good of the greater sections of the public in general. Here we try to uphold the salient parts of the budget that goes to make the nation’s real estate more robust.

The proposal like the deduction of tax on profits from a housing project for apartments constructed up to 30 sq. meters in the four A-1 cities and a deduction of up to 60 sq. metres in other cities of India are welcome by the sector. This will be applicable for the projects approved between June 2016 and March 2019 but if they are completed within a period of three years. This measure will certainly boost the supply in the affordable sector though the developers will be subject to alternate taxes at the minimum.

affordable housing

The other advantage that the experts speak of is the distribution made out of the proceeds and the income generated of the Special Purpose Vehicles and the subsidiary companies of the Real Estate Investment Trusts (REITs) and also the Infrastructure Investment Trusts (INvITs) which has a specific shareholding would not be subjected to the Dividend Distribution Tax for the distribution of the dividends after a specified date. The experts opine that this is certainly a very progressive step to boost the growth of the REITs which would also help in pumping fresh capital to the sector.

Another benefit given to the mid sector buyer is the proposal of deduction of an additional interest of Rs. 50, 000 annually for loans of up to Rs. 35 lakhs for the first time home buyers. The loans must have been sanctioned in 2016-2017 where the cost of the house purchased does not exceed Rs. 50 lakhs.

This measure the experts opine will directly boost the home buyer’s sentiments. Another good news for the real estate sector is the exemption of service tax on the construction of affordable housing and apartments within a limit of 60 sq. metres under any of the schemes of the state or the central government including the schemes of Private Public Partnership (PPP) model which is also welcome by the experts and said the measure is in the right direction.
Another aspect of the measures taken on the rental segment is also one that is beneficial for the general public. The tax exemption for the rent paid has been increased from Rs. 24, 000 to Rs. 60, 000 which will help a lot for the rental segment. The trend watchers remark that this proposal will take into account the increments of rising rental prices in the cities due to high demand of quality housing.

There has been few good news for the ancillary industries related to real estate like the materials used for construction. In this regard the exemption of excise duty made available to the concrete mix industry being manufactured at the sites of constructions is a move that is also welcome by the government. Another proposal that was applauded by many which we mention lastly but definitely not the last is the digitization of the land records which is a much awaited step in the way of lessening the land disputes. The experts feel that these proposals go well with the direction that real estate has been geared to take and this will certainly render the sector to yield more and contribute more in the GDP of the country.

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Realtors Suggest The Ways to Boost the Construction of Affordable Sector

Interestingly enough there is a paradox in building the affordable housing in India. It apparently seems that there is an acute shortage of the low cost and the affordable housing but there is an oversupply of high-end housing. The reason why the developers are not shifting their focus from the high-end housing to the affordable housing is mainly for the policy irregularities. It is estimated that in the next decade a number of people as large as 3 billion will shift to the urban areas and the cities in the next decade or so. If this happens there will be a huge shortage of housing in the time to come. Already the shortage of housing in India is estimated at a figure of 19 million units. Of these, a huge 95 percent is in the affordable and low-income housing groups.

There are few of bottlenecks in the building of affordable housing and low cost housing in the nation. The first hurdle is of course the low margins in the affordable housing construction along with the hurdle of multiple approvals and clearances which are the same from different authorities. Land issue is another concern which is the dearth of cheap land and the land plots that are available in remote locations but they are not so rich in infrastructure to cater to the demand.

The next major issue isthe financing of the affordable sector housing and the banks and financial institutions has a ceiling on real estate funding. The banking industry favours the high end projects from reputed builders with high margins which for obvious reasons gets more preference over the affordable housing projects.

The next problem is the tax rates that the real estate sector attracts at different points of the transactions of the real estate projects which amount to 25 percent of the property rate. This becomes too cumbersome for the developer.

Measures to boost affordable sector

The industry veterans and the trend watchers suggest few of the measures and recommendations which can help and create a solution for the higher supply of the affordable housing sector.

For easy availability of funding and direct tax benefits granting the infrastructure status to the affordable sector would be a feasible solution.

A reduced stamp duty clearance with a single taxation may be like that of GST can be a crucial step, suggests many. The 80 IB provision of Indian Income Tax Act which has provisions of liberal income taxes for real estate construction in the affordable sector is recommended to be reinstated.

A single window clearance is also a remedy which will be a short route to rounding off about 35 to 40 major approvals from varied departments, local authorities and agencies that a group housing project needs to obtain. The entire exercise as per the realtors takes about more than two years and eventually results in escalation of costs and delays in completion.

The cost of capital should also be lowered in case of affordable housing which many feel should be ideally excluded from the different RBI ceilings. It is even better if the RBI instructs the banks to include such funding in the Priority Sector Lending (PSL) as classified by all the banks.

The availability of land for the affordable sector is also a step that the state governments should implement and in that implementation of a zoning process can be a key in boosting the construction of affordable housing.The government should also designate areas where housing friendly rules for zoning would apply with higher norms of FSI and FAR with relaxed norms of density.

The government-led schemes for affordable housing like the AMRUT, Atal Mission for Rejuvenation and Urban Transformation, Pradhan MantriAwas Yojana (PMAY) and other such central and state government schemes should be helped to propagate with more resource mobilization with such policy measures and administrative structures.

According to the Reserve Bank of India statistics an investment of Rs. 70 trillion is needed for the construction of infrastructure development, affordable housing, construction of urban roads and modern transportation over the next couple of decades. A section of the trend watchers feel that when the New Real Estate Regulatory Bill is passed in the parliament the real estate regulator so constituted under the provisions of the bill will look into these issues and may inculcate few of the low-income customer friendly initiatives.

Dreamz Offering flats in all corners of the city @ never before prices with builder verification offer

Dreamz Infra is an established name in affordable housing with offers for flats and apartments at half the market price. Today with three completed projects in a short span of time the company has established itself as the mother of affordable housing. The company understands the doubts and concerns of customers and has started a unique offer. Dreamz Infra has given option to the customers to check the background of its own by allowing customers to talk to land owners and residents of past projects and then take a decision. This is a unique stance. The company held home fairs with such arrangements for the prospective customers to verify the builder and then book the flats. There were great responses from the customers as the company sells flats and apartments at lesser rates than the market rate. Dreamz Sneh at Marathahalli, Dreamz Suvidha at Sarjapura Road and Dreamz Siddhi at Electronic City are few of the projects of the company that is 90 percent complete and the possession will be handed over in few months. Few more are also on the way of rapid construction.

apartments-offers-in-bangaloreThere is good news for people looking for flats and apartments in HBR Layout at affordable rates as Dreamz Shikhar has been introduced near the BDA complex which is a sought after location. Apart from that you have Dreamz Swadhya at Whitefield; Dreamz Sampoorna at Electronic City; Dreamz Samhita 2 in J P Nagar; Dreamz Sadan in Kundanahalli; Dreamz Sahavas at Begur Road; Dreamz Ekadant at Sarjapura Road; Dreamz Sumadhur at Vidyaranyapura; Dreamz Shloka at HSR Layout; Dreamz Sarovar at Silk Board; Dreamz Saswat at Thannisandra Main Road. In many of these projects construction work has already started and there are special offers in many of them.

Dreamz Offers of the weekIf you have a dream to buy an affordable home in the Bengaluru, this is your chance as they have apartments for sale in all corners of the city

How About Smart Homes In Smart Cities?

With Indian Prime minister’s vision of smart cities and with the ministry of Urban development identifying new and existing locations to be converted to smart cities, the next question is, will it house smart homes too.

Smart cities will have intelligent social, economic and physical infrastructure in place facilitating better management of water, transport, energy resources, safety, security and traffic management systems. With Rs. 7, 060 allocated in the recent budget, the initiatives of smart cities have attracted maximum attention from the IT sector because of the heavy reliance of the project on ICT.

By January 2015, Electronic city of Bangalore is proposed to turn smart being the first project of its kind, Tumkur being the next location. With conversion of smart cities, the question that pops up is, will the homes be smart as well. With the city’s hard infrastructural layout becoming smart, the performance of the city will certainly go up. But one can’t deny that the smallest unit of a city is its home or apartment. It can’t be denied that urban performance depends greatly not only on the city’s infrastructural endowment but also on the quality of knowledge communication and its availability, social infrastructure and the ease of intellectual capital flows. A smart home does exactly that.

DreamzGK Infra Flats in Bangalore

A smart home can enable a householder to put an end to all worries and a quick glance in one’s smartphone or tablet can assure one of all accessibility of house appliances and control of the environment too. With the command of the house owner, either by voice, tablet or smartphone, or remote control, all appliances that uses electricity can be regulated. Most of the applications that can be regulated relates to home safety and security, entertainment and home theater, information systems, lighting and even thermostat regulations. Smart cities are characterized by smart usage of water, energy, mobility, information technology, business, city planning, governance and citizenry and smart buildings. Smart building houses smart homes and therefore is a sure step forward in making the cities smarter.

The trend of the industry suggests that demand for smart homes is catching up in India too. Although restricted to luxury segment and the rich, the automation is in few amenities like intelligent sound sensing, lighting and smart kitchens, the demand for such homes are increasing. Although in India, it is an emerging concept, the reasons of establishment of such concepts are certainly evident.

The trifling little doubts of a householder about whether the kitchen light is switched off, the burner is off, or the security alarm activated, can all be solved through smart homes. Even someone falling off in the bathroom while taking a shower or someone breaking in to the house during your absence can also be tracked and redressed remotely.

Despite such growing enthusiasm, there are of course certain challenges of automation too.

Sensitivity of Prices:
If Indians have to use such gadgets, the products has to be customized and innovated which goes for high prices and Indian market place being price sensitive and under developed, buyers wary about their investment if there isn’t a compelling value proposition. Thus sellers are compelled to cut corners and this this is a vicious circle that the market faces.

Lack of awareness:
A constant effort for strengthening the value proposition is required as Indian customers are not aware about benefits of a smart home and its perceived value. This entails for dedicated marketing efforts of the concept from the vendor’s end.

Lack of a proper ecosystem:
Smart homes being a new concept, there is no ecosystem of integrators or support providers. Thus the vendors face an enormous challenge of a new product introduction in a price competitive market with no ecosystem to support.

Disarray in the real-estate market:
In this fragmented state of real-estate market conditions that it’s facing for the past few years, industry players need time to sell this commodity as a necessity as it is still perceived as luxury.

With time, smart homes might become a widespread reality in India. What do you have in mind?

DreamzGK Infra is one top residential builder in Bangalore. The company is providing real estate services since three years. Started with just 300 customers, now providing service for more than 4500 customer across Bangalore. If you are looking for flats in Bangalore at affordable prices then visit DreamzGK Infra.

For customers feedback visit official YouTube channel: http://www.youtube.com/user/infradreamz