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.

Advertisements

Latest Reviews on Bangalore Infra Market

The proposed Mumbai-Bangalore Industrial Corridor is expected to connect Bangalore City in the north-western side of the city along Tumkur Road. Since the last 7-8 years (since 2005/2006), Tumkur Road and its surroundings are witnessing significant augmentation and improvement in terms of infrastructure in general and connectivity in particular.

Some of the key infrastructure projects rendered operational in the area in the recent past include the Elevated Expressway, Bangalore-Mysore Infrastructure Corridor (BMIC) and Bangalore International Exhibition Center (BIEC).

Other on-going and proposed infrastructure initiatives are Metro Rail Phase 1 & 2 and Peripheral Ring Road. These infrastructure projects, along with the proposed Mumbai-Bangalore Industrial Corridor, are expected to significantly improve the physical characteristics of the area.The result will be the development of large integrated projects, as there are large industrial land parcels waiting to be unlocked for quality real estate development with the growth of economic drivers in the area.Until the recent past, the population of this micro-market had a low socio-economic profile – it was dominated by blue-collar workers as the area was a hub for small scale industries manufacturing ancillary parts for PSUs, automobile industries, garment industries, etc.

Over a period of time, the area saw the arrival of large Indian and multinational industrial entities such as Kennametal, Widia, ITC , Volvo, BOC , Reliance Packing Industries, etc.Since last 4-5 years, the area is being viewed as one of the fast developing micro-markets in the city, as is evidenced by the launch of some large real estate projects complemented by key infrastructure initiatives.This has vastly improved the characteristics of the area, which now has good availability of large land parcels due to the unlocking by sick industrial units at competitive prices, and a visibly changing socio-economic profile of the resident population.

Some of the large developments envisaged then (now completed) are Brigade Gateway Project on 40 acres land parcel, BIEC, Taj Vivanta – Tumkur Road, etc., to mention a few.Till date, about 17 residential apartment projects launched and an there is expected to supply about 5,099 units in the micro-market on a cumulative basis.Some of the graded developers like Brigade, Prestige and Sobha have also ventured into this market and are targeting the upper-middle income, middle and upper-lower income segments.Social infrastructure facilities like hospitals and schools are already in place and are acting as catalysis for residential development in the area.

Most of these social infrastructure developments are adequately catering to the existing residing population. With the proposed Mumbai-Bangalore Industrial Corridor, this micro-market is expected to benefit from an increase in much-needed economic driver, which will significantly increase demand for all core real estate asset classes like residential, commercial / office, retail, hotel, industrial infrastructure, etc.

Some of the commercial / office and retail developments envisioned during 2005/2006 within this micro-market and its surroundings are operational now. These include the Brigade Gateway Project – an integrated development comprising residential apartments, commercial / office, retail and hospitality which is currently known as ‘Brigade World Trade Center’.Commercial Grade A developments in the area account for about 260,000 sq. ft., which includes Brigade Rubix at HMT Township (about 180,000 sq. ft. of office space) and 80,000 sq. ft. of office space by IBC Developers within the residential development of Platinum City.

Tumkur Road is also fast emerging as an attractive destination for stand-alone developments and graded shopping complexes. This is evident from newly launched Brand Factory at 8th Mile, McDonalds, etc. along with ‘vanilla ‘ stores having brands like United Color of Benetton, Wrangler, Levis, Lee and Woodlands.

The proposed Mumbai-Bangalore Industrial Corridor is likely to leverage the residential, commercial and industrial infrastructure along with existing, ongoing and proposed infrastructure initiatives in terms of transforming this micro-market into a major growth node for the city.

We see the emergence of an important economic hub catering to the city in general and the micro-market in particular. The area within a 4-5 km radius along both sides of Tumkur Road is likely to develop into an influence zone for the proposed Mumbai-Bangalore Industrial Corridor in terms of residential belts like Magadi Road, Hesaraghatta, Jalahalli, etc. up to Yeshwanthpur.

Metro Rail Extensions To Spawn New Residential Locations

The Bangalore Metro Rail Project is envisaged as a major game-changer for Bangalore City in terms of inter-connecting different parts of the city and reducing traffic congestion on city roads, and significantly cutting down the commuting time.Phase 1 of the Metro Rail Project largely covers the city centre, running a total length of 42.3 km through two corridors – the East-West Corridor (about 18.10 km linking Baiyappanahalli and Puttenahalli along Kanakapura Road) and the North-South Corridor (about 24.20 km liking Mysore Road with Tumkur Road till Hesaraghatta Cross). Phase 1 is likely to be commissioned by 2014.

Details of the proposed Phase 2 of the Metro Rail Project, consisting of four extension lines and two new lines with a total length of 72.095 km and 61 stations are given below:The four proposed extension lines under Phase 2 are expected to provide much-needed ‘last mile’ connectivity to commuters and also optimize the utilization of Phase 1. The two new lines traverse through some of the densest and traffic-congested areas of the city, and will offer faster connectivity to the Information Technology Industry. The Phase 2 is planned to be completed within 5 years from the date of approval by the Government of India.

With Phase 2 covering a large part of the city, especially fast-growing locations like Whitefield, Mysore Road, Tumkur Road and Bannerghatta Road, these areas are likely witness further development in terms of all core real estate asset classes for the following reasons:

* Metro Rail Projects are being developed across the world’s high-density corridors because they provide vastly improved connectivity. This phenomenon is likely to be seen all along the alignment in Bangalore as well, resulting in substantial development

* There is a proposal to permit a maximum FAR of 4.00 (against the current average FAR of 2.50) all along the Metro Rail alignment within 500 meters on both sides of the Influence Zone. This additional built potential of the properties along the influence zone will be able to make use of this additional FAR, as land values along these corridors are very high

* Improved connectivity and reduced travel time may encourage the city population to prefer suburban locations for residential purposes (to avoid residing in high-traffic areas), which would further catalyse the development of social infrastructure like schools, healthcare, retail developments, leisure and entertainment facilities, etc. in the suburban locations due to the further development of residential catchments.

Considering the combined coverage of both Phase 1 and Phase 2 of Metro Rail Projects, all localities up to the BMIC Corridor alignment within Bangalore City are likely to witness significant growth over next 5-7 years.

Name of the Line Description Length of the Line (km) No. of Stations
Baiyappanahalli to ITPL – Whitefield Extension of Eastern Line of Phase-1

15.5

14

Mysore Road Terminal to Kengeri Extension of Western Line

6.465

5

Hesaraghatta Cross  to BIEC Extension of Northern Line

3.77

3

Puttenahalli Cross to Anjanapura Township (up to NICE Road) Extension of Southern Line

6.29

5

Gottigere – IIMB – Nagawara New Arterial Line with a 13.79 km Underground Line.

21.25

18

RV Road to Bommasandra New Line with Interchange Station at RV Road Station in the Southern Line of Phase-1

18.82

16

Source: moneycontrol.com/news/real-estate/heresupdatebangalores-real-estate-market_935591.html

Bangalore Real Estate Turns Property-seeker Friendly

Acknowledging the turbulence in the economic waters of the country, the “Bangalore Real-Estate Vessel” has decided to go-with-the-flow, steering the ship in the direction of winds favoring the preferences of the mass property buyers. The city realtors are now considering the possibilities of re-quoting the prices of their developed projects at a reduced rate, as the demands for low-cost quality residential housing flood over the extensive promotions of costly high-rises towering the city.

Till now the real estate jigsaw puzzle of Bangalore was a mix-n-match of healthy residential market accounting to 30% of the city’s business, while the rest indicated the other zonal pockets displaying a higher rate chart. Compared to properties ranged within 35 – 65 lakhs, the posh walls bearing ‘crore’ painting are being less asked for by the middle-income buyers seeking to invest. Hence, in order to join the mid-segment oriented developments’ competition, the super-luxury abodes have taken a call to climb down the price ladder by almost 35% instead of clinging on the hiked digits.

These big budgeted ventures reportedly have failed to meet half of the estimated target, even with the support of promotional offers both during the pre-launch and launch stage. However, with this publicity and reduction in the market prices, these developments have reached within the access range of the common mass, with a stretched flexibility in the pricing ends. To assist the sale ramp up, Bangalore realtors are announcing the line-ups for villas and villaments within the range of 45-55 lakhs. To add to the garnishing, they are also welcoming the bites of lower booking amounts.

Lure techniques have not limited themselves till the financial boundary… Under the present circumstances, willing investors are also enjoying promising commitments from the builders in terms of quality amenities. To name a few – vitrified tile flooring replacing Italian marbles, standardized bathroom fixtures and kitchen granite tiles are the latest touch-ups.

Reference: The Times of India, Bangalore

Government open ways for Multi – brand Retails Bangalore

Big establishments welcomed the Karnataka government’s node to allow foreign Multi-brand retail to start operations in the state, but small businesses intricate by the move expressed cited there objection over the decision, indicated they may protest the move. Further, there isn’t any rush for the foreign retail apparently in the state. Moreover none of the Multi brand retails have applied to The Central government for starting operations in India, without much clarity over the stringent policies to be followed set by the government has hampered the interest of the big Brands into entering the Indian market. The Bangalore Chamber of Industry and Commerce (BCIC), which comprises of big corporates, have shown a positive vibe over the state government’s decision, quoting it to be “a path breaking move”. This move by the Karnataka state government could possibly improve the retail trend while creating a lot of employment opportunities. Which could strongly be a driving force for the state’s economic growth and improve end consumers interest said M Lakshmi Narayan, president of BCIC and MD of global audio major Harman International India. H V Harish, senior VP at BCIC, also cited that government’s decision would give a boost to the agriculture and horticultural sector and also bring a boom into the real estate sector . The Federation of Karnataka Chambers of Commerce & Industry (FKCCI), been a local industry body that represents small and medium business. All this while they have been opposing, the transition of big brands into India through the multi-brand retail model. The organization said it did not want to make a comment based on media reports about the Karnataka government’s change in position on the matter. “We would be meeting the chief minister. After we speak with him and understand the government’s position, we will share our views,” said K Shiva Shanmugam, president of FKCCI. Not all have welcomed the decision with big heart, The Karnataka government’s decision have also faced a lot of opposition by many organizations, One such organization that have been most vociferously opposed to foreign retailers has been the Bangalore Wholesale, Food Grain, and Pulses Merchants Association. The members of the organization mostly operate out of the APMC yards. The opposition by the organization is not the first one, previously when German wholesaler Metro Cash & Carry entered Bangalore, the association had virulently opposed it, this made Karnataka government to strictly impose guidelines on the way Metro operated

View ‘Dreamz GK Reviews‘ by existing happy customers.

Source: The Times of India, Bangalore

Dreamz Infra towards Affordable Accomodation in making

In the advent of modernization, increase in population, vehicles on road & narrow lanes… Bangalore has seen drastic development efforts by the authorities.

Overall the infrastructure development has eased the life of many daily commuters in Bangalore. Bangalore been an IT hub, BMTC bus’s been only the main public transport system in the city has made a rational increase in personal vehicles. The newly inaugurated metro encircles a smaller circuit of the city compared to its necessary frequency and coverage area.

This has necessitated major infrastructure projects to kick in and fill the gap.

One can say that off late Bangalore has top class flyovers, underpasses, elevated highways, express ways, ORR(outer ring road), NICE road – Many already delivered for public use and few under construction.

Bangalore has been one of the best place to settle down, and always have attracted many from all over the country. Starting from being one of the hotspot for education, to get a dream job… Bangalore welcomes one and all.

Amidst all this development, education, career, accommodation and food plays a major part. Accommodation has always been a matter of concern to many, though options are available in abundance such as PGs/ paying guests, rented house, single rooms or shared apartments. Inflation has increased prices in all respects, while, on same turns, renting or releasing house has also seen a massive increase in its domain.

People do dream for own house, but hardly few out of the lot can afford it. Rise in costs & increased agents interference has made home buyers fused to jeopardy. Many builders have come up in this space to provide affordable homes, but not many are able materialize there claims.

Dreamz Infra is one name which has stand out in this respect; they fill in the gap & are fulfilling customers’ needs much over there expectations. Reviews directly by customers are one such example which points out dreamz commitment towards its customer base.

Land revenue bill returned by Karnataka Governor Passed during BJP Govt

Governor H R Bhardwaj on Wednesday returned the Karnataka Land Revenue (Second Amendment) Bill, 2012 , passed by both the Houses of the legislature in last days of BJP tenure.

The legislation was brought by inserting new section 94CC in the act with the intention of regularizing unauthorized occupation of revenue land belonging to government areas with dwelling houses constructed prior to January 1, 2012 by granting the land to unauthorized occupants after payment of small amount of fee.

Justifying the decision to return the bill, governor has said “The policy of regularization of encroachment of government land directly encourages illegal occupation of government land. This amendment will cause severe inroads into the lofty principles such as rule of law, equality before law, due to process, majesty of law, dignity of courts, inalienable fundamental rights, directive principles etc, which are enshrined in the constitution,” he said. He added that in the larger interest of the public, illegal occupation of government land has to be curbed.

Referring to Task Force for Protection of public lands headed by V Balasubramanian, Joint Legislature Committee constituted to go into the deadline of the problem of land grabbing and encroachments and also Supreme Court judgment in the case of Jaspal Singh Vs State of Punjab in January 2011, Bhardwaj in a strongly worded observation has said the amendment bill does not specifically prohibit grant/regularization of common land. “This amendment does not serve any public good or social cause, on the other hand it may lead to illegal grabbing of government land.”

Governor also observed that similar act was passed in April 1998 of regularizing the unauthorized occupation as a one time measure. “However it is not known why such lands under unauthorized occupation made prior to April 1998 could not be granted till now.”

Source: The Times of India, Bangalore

SEZs Infused growth on residential catchments – Bangalore

When the Special Economic Zone (SEZ) Act 2005, supported by the SEZ Rules was introduced in 2006, the idea was to make it easier to establish large, self-contained facilities with excellent infrastructure with the aim to promote exports. As per the guidelines, SEZs can be developed by public or private players or even jointly, by State governments, their agencies, or on the public-private partnership (PPP) model.

They feature large-scale work which in turn forces the require pertaining to real estate choices within the vicinity supplying a traction to help improvement connected with industrial spots in addition to societal commercial infrastructure.

 

Pushed pertaining to improvement

Girish k S, Local Director– strategic consultant, Jones Lang LaSalle India, makes clear precisely how its disturbed localities within the vicinity in addition to triggered the particular improvement connected with assistance commercial infrastructure. “In Bangalore, financial individuals well guided guidelines connected with improvement, since noticeable from your method micro-markets just like Whitefield, Electronic city, the particular Marathahalli-ORR belt, in addition to Hebbal formulated through the years. SEZs being significant financial hubs, the particular regions adjoining these formulated very rapidly, along with enlargement connected with assistance commercial infrastructure in addition to features just like residential, list, schools in addition to hospital wards, in most these types of micro-markets. ”

Drive pertaining to residential marketplace

The particular Outer ring road (ORR) granted the fillip to the industrial improvement close to these types of regions. Commercial spots inside these types of localities, in turn, are generally bringing about the particular multiplication connected with residential catchment purses plus the major improvement connected with excellent societal commercial infrastructure just like schools connected with overseas expectations, list improvement (malls together with principal streets) plus hospital wards.

Superior connectivity with the Metro has been designed in order to be connected actually the particular peripheral regions of the city where SEZs are situated to the main in addition to suburban areas. The particular reputation connected with lots of industrial living space within the northern in addition to Far East has offered to the organizing from the Peripheral outer ring Path.

Naveen Nandwani – Director, south India, Cushman & Wakefield, elaborates, “SEZs have come way up typically within the Hebbal to help Sarjapur Path extend from the ORR, and thus enhanced the particular residential improvement within the northern, far east in addition to south-east regions of the city. Inside northern, regions for example Devanahalli, Hebbal, Bellary Path, Thanisandra, Hennur in addition to Horamavu get benefitted from distance to help SEZs. In the east, residential catchments cropped way up inside Whitefield, Hoodi, combined Varthur Path in addition to combined Old Madras Path a result of the establishment connected with SEZs. Inside south-eastern areas, Sarjapur Path in addition to HSR layout viewed a growth inside residential purses. ”

Girish adds, “Key micro-markets benefiting from your everyday living connected with SEZs and it developments within the town are generally Whitefield, electronic city, Marathahalli-ORR stretch, in addition to Hebbal. Moving forward, some of the catchments from the existing/upcoming SEZs for example Mysore Path in addition to Yelahanka may also be likely to be benefited. ”

 

Attributes of residing in these types of belts

Thinking about the hectic day-to-day lives in which specialists guide, his or her concern can be to attempt to cut-down on the travelling time. So, house owners prefer to purchase properties in the vicinity of his or her work locations.

Naveen explains, “The commercial infrastructure of those regions shows offer in addition to becomes focus from your government and even the particular exclusive people look to develop greater well connected with societal commercial infrastructure to help focus on the particular mushrooming residential regions. So, homogenous improvement can be more likely inside these types of belts since currently viewed within the Whitefield region. Because the requirement pertaining to flats, possibly in the marketplace or even pertaining to rent is always an excellent source for these types of belts, whilst a buyer, these types of regions hold offer connected with channel to help large profits.. ”

 

Possibility of thanks

The particular improvement in addition to enlargement connected with assistance commercial infrastructure in addition to features close to SEZs will always make dwelling comfortable, pertaining to house owners. The particular altering attributes of those regions are able to offer larger profits pertaining to investors inside property.

Girish highlights, “Most of those micro-markets will likely watch 9-10 percent compounded 12-monthly growth inside prices connected with residential spots within the channel to help long conditions. Regarding industrial in addition to list space leases, the particular hire expansion can be 5-6 per cent per annum as the present generate may well offer you 16-18 percent profits pertaining to long-term investors. ”

 

Future residential improvement

As outlined by Naveen, “Growth connected with residential catchments within the east, close to Old Madras Path to Hoskote, can be stimulated by means of establishment connected with new SEZs generally there. Whitefield in addition to Hoodi, growing residential regions, are generally inside 10 km with this place and will grow more in case far more SEZs are generally recognized within the vicinity. ”

Considering that Bangalore has evolved in the concentric way, growth has been happening all along the major corridors and micro-markets where large economic drivers such as SEZs and IT parks are located.

“From that perspective, micro-markets for example Whitefield, Gadgets Town, Marathahalli-ORR extend, in addition to Hebbal will likely go on watching expansion or even more enlargement. In the same manner, all Legitimate Small business Region locations – Bannerghatta Path, Kanakapura Path, Sarjapur Path, Mysore Path, Bellary Path, Tumkur Path in addition to Hosur Path – will likely go on watching expansion. Growth combined Bellary Path is likely to be major a result of the enlargement connected with city-level commercial infrastructure all down the route up to the airport. Growth combined Kanakapura Path, Tumkur Path in addition to Mysore Path is likely to be powered by phase 1 of the Metro, ” affirms Girish.

Source: Times Property,The Times of India, Bangalore