Tag: Real Estate

Andrew Holland of Avendus Capital sees a bright future for this industry

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Andrew Holland, CEO of Avendus Capital Public Markets Alternate Strategies expects the uptrend in the travel and experiences market to sustain for many more years. “….it is the very start of a long runway for the hospitality industry.” Holland said in a conversation with CNBC-TV18.

Holland noted that travel is a priority for people and they are unlikely to delay it, especially after the COVID-19 pandemic.“If you speak to all the hotel companies, margins are improving. We have got some new listings coming in as well. So I don’t see that going away. ”

In the 2024 interim Budget, Finance Minister Nirmala Sitharaman announced an allocation of ₹2,449.62 crore to the tourism sector for the next fiscal year (FY25), nearly a 45% increase over the revised figure for the current fiscal (FY24). The increased allocation reinstates the government’s focus on the tourism industry. In 2023, the allocation for the sector was trimmed to ₹1,692.10 crore from an initial estimate of ₹2,400 crore.

Under the central sector schemes, there is a rise in allocation for tourism infrastructure, which is ₹2,080.03 crore in the 2024 interim budget from ₹1,294 crore in the preceding year.

While the tourism industry was disappointed that the government did not assign hospitality the infrastructure status, experts pointed out that the initiatives towards development of airports, railways, metros and other supporting tourism infrastructure will bolster growth.

Holland also discussed his views on other sectors, saying he is cautious on commercial real estate, particularly in the United States. Holland warned that problems in the commercial real estate sector could impact market stability, similar to the situation in China’s property market.

He is cautious on banks and remains optimistic on sectors like IT, and metals.

“We expect China will do some stimulus to get the property market stabilised and that will be good for the metal industry overall on metal stocks,” he noted.

Also Read | RBI MPC Meeting 2024: Interest rates unchanged for sixth time in a row

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

China’s central bank adds $21 billion in cheap housing funds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The People’s Bank of China provided 150 billion yuan ($20.9 billion) worth of low-cost funds for lending to housing and infrastructure projects last month, stepping up support for the economy.

The outstanding amount of the PBOC’s Pledged Supplemental Lending program to policy-oriented banks 3.4 trillion yuan at the end of January, according to a central bank statement Thursday.

The PSL program is seen as an important tool for Beijing to support the economy and mitigate the impact from the worst property downturn on record. The cheap central bank money is for policy banks to lend to projects, which could help alleviate the decline in construction activities.

The PBOC increased the quota of PSL funds by 500 billion yuan for the so-called “major projects,” which include building government-subsidized housing and renovating run-down inner city districts, according to an article published by the central bank last month. It injected a net 350 billion yuan in December, which was the largest since November 2022.

Also Read: China’s central bank adds $21 billion in cheap housing funds

While the program will drive more credit and investment via construction projects, some analysts warned its impact may take time to manifest.

It’s unlikely urban renovation projects will “lead to an immediate boost on credit and economic fundamentals” because it can take a long time for such big projects to be launched, Sinolink Securities analyst Fan Xinjiang wrote in a report Friday.

Fan forecasts the 500 billion yuan PSL funds could eventually drive new credit by as much as 1.5 trillion yuan, as the projects will receive more financing. The interest rate on the PSL funds was lowered to 2.25% by the end of December from 2.4% in the previous quarter, according to PBOC data. That’s lower than the one-year policy rate of 2.5%.

Also Read: China will continue to be a global power despite slowing growth, says Vijay Gokhale

Authorities have stepped up policy support for the real estate sector recently, with plans to reveal the first list of housing projects eligible for financing. Chinese cities including the southern metropolis Guangzhou also relaxed home purchase restrictions. But the market slump continues — new home sales from the 100 biggest real estate companies plunged 34.2% from a year earlier in January.

Chinese policy banks have also issued their first batch of loans to such projects in cities such as Guangzhou and Shijiazhuang, according to local media reports.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2024: Real Estate anticipates revisions in affordable housing price bands, extension of PMAY support

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As Budget 2024 approaches, the real estate sector is expecting significant changes in the price bands that define affordable housing. Industry experts are calling on the government to re-evaluate existing criteria, particularly the pricing structure, to better align with the diverse economic landscapes across cities. 

While the current unit size definition of 60 square meters carpet area is deemed appropriate by experts, concerns are raised over the universal pricing cap of ₹45 lakh for affordable housing, seen as impractical across most cities. 

In metros like Mumbai, stakeholders argue for an increase to ₹85 lakh or more, with other major cities suggesting a rise to ₹60-65 lakh. Such adjustments, proponents argue, would qualify more homes as affordable, enabling a broader segment of homebuyers to benefit from current incentives like reduced GST at 1% without Input Tax Credit (ITC) and other government subsidies.

The Pradhan Mantri Awas Yojana (PMAY) scheme, a cornerstone for affordable housing, is set to expire in December 2024. The real estate sector is urging an extension of the scheme till December 2025 to continue providing central subsidies.

Eligibility criteria for homebuyers under PMAY, specifically the interest subsidies ranging from ₹2.3 to ₹2.7 lakhs, is seen as restrictive. Industry experts advocate for enhancements to these criteria to bolster affordability in the wake of rising residential prices. 

“The share of sales in the (price band of) less than ₹50 lakh housing units (affordable housing sales) segment has dropped steadily from 48% in 2018 to 30% in 2023. Even as overall housing sales go from strength to strength and stand at 10-year highs, affordable housing sales have dropped 16% YoY in 2023. Homebuyers in this segment are most impacted by affordability constraints in an inflationary scenario characterized by high interest rates and increasing residential prices,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India. 

There has been a consistent dip in the demand and sale of affordable houses post the Covid-19 pandemic. ANAROCK Research data points to a slowdown in demand for affordable homes post-pandemic, leading developers to scale back new supply in this category.

The total new supply share in the affordable category across top 7 cities has plummeted from 26% in 2021 to a mere 18% in 2023. In terms of sales, the budget homes category witnessed a decline to approximately 20% in 2023, down from over 30% in 2022, and nearly 40% in the period preceding the pandemic.

In an effort to support affordability, experts have proposed several recommendations to be considered in Budget 2024. One of them being Tax Rebate on Home Loan Interest Rates. Experts propose raising the tax rebate on home loan interest rates under Section 24 from ₹2 lakh to a minimum of ₹5 lakh to stimulate the affordable housing market.

“Through our recommendations, we have addressed some of the key fundamental issues that we believe will provide a huge boost to both demand and supply, through a mix of increased tax exemptions and tweaks in the definition of affordable housing – which is bound to provide a definitive way forward as Indian Real Estate is projected to contribute close to 20% of India’s economy once it reaches the $10 Trillion milestone” said Boman Irani, President, CREDAI.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Puravankara wants to grab a bigger slice of Mumbai’s ₹3 lakh crore redevelopment pie

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Bengaluru-based real estate developer Puravankara is eyeing a bigger share of the Mumbai redevelopment market with an aim to increase the contribution of the Western parts of India to 50% of overall business from 10-12% now.

Speaking with CNBC-TV18 after reporting strong third quarter earnings, Abhishek Kapoor, the company’s Group CEO pointed out that the Mumbai redevelopment opportunity is massive, with gross development value (GDV) estimated to be in excess of ₹3 lakh crore over the next 7-10 years.

Puravankara’s revenue grew 46% year-on-year (YoY) to ₹574 crore for the October-December quarter. Net profit surged to ₹79 crore from ₹23 crore. Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew 79% to ₹199 crore with margin at 34.7% versus 28.3% YoY. 

Sales value in the third quarter this year was up 56% year-on-year (YoY) at ₹1,241 crore. Sales volume rose 60% to 1.63 million square foot (msf) from 1.02msf last year. Average price realisation declined 2% to ₹7,610 per square feet in Q3FY24 from last year. 

While Puravankara expects approvals to come through for 12msf, lower than 15msf estimated earlier. The company has launched 4msf out of the 8msf that it has already received approvals for. It plans to open another 4msf in the last quarter of FY24.    

Kapoor also outlined his wish list from the upcoming Budget 2024, particularly in the affordable housing segment.

He believes it is important for the government to revise the definition of affordability in response to rising income levels. “If you look at the definition, and if you look at the tax exemptions, which is almost at ₹8 lakh per annum salary, literally you don’t pay any taxes with some investments…I am sure they want to take another step in that direction and increase it because of the cost of living…now, with that a household income would be anywhere between say ₹16 to 17 lakh, which is typically tax free. If you look at that number, easily your affordable housing bracket is at about ₹75 to 80 lakh, because that’s the affordability that they will have. So, the definition clearly has to change,” he explained.

He also touched upon the challenges of high construction costs due to goods and services tax (GST), stressing the need for tax exemptions or reductions to make construction feasible. Finally, he pointed out the high costs of interest and capital in affordable housing, highlighting the need for more supportive financial measures to align with the Prime Minister’s vision of housing for all and its role in capital formation, similar to infrastructure.

Puravankara shares have gained nearly 183% over the past year. The company’s market capitalisation is around ₹5,900 crore.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

From spiritual hub to real estate hub: Ayodhya’s property market witnesses unprecedented growth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The temple town of Ayodhya is experiencing a significant surge in land prices, with circle rates witnessing a substantial increase. The current prices now rival those in Faridabad, Noida, and Gurugram.

The House of Abhinandan Lodha has invested ₹1,200 crore in a 51-acre plot in Ayodhya, where phase 1 of the 7-star luxury project called Sarayu is currently in progress. The project is conveniently situated 12–15 minutes away from the Ram Mandir, and a 1,250-square-foot plot in the project costs a staggering ₹1.72 crore.

Experts in the real estate industry report a surge in prices around Ayodhya, ranging from ₹2,000 to ₹10,000 per square foot.

In addition to this, The Leela Palace is set to introduce the first-of-its-kind pure vegetarian 5-star hotel inside the premises of Sarayu.

Clearly, Ayodhya is not exempt from the real estate boom.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CNBC-TV18 Exclusive | Delta Corp CFO Anil Malani discusses earnings, GST impact, IPO plans, and more

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Delta Corp reported a subdued third quarter (October-December 2023), as the earnings were hit by the new goods and services tax (GST) regime. Under the new GST regime, the company had to charge 28% GST upfront on coins sold instead of on Gross Gaming Revenue, and this did not go down well with customers in the initial days.

Below is the verbatim transcript of the interview:

Q: What explains this weakness in a seasonally strong quarter for you. Were all your casinos operational? And second, what is the legal status on all those GST, show cause notices that came to you? You have not made any provisions for them. As of now, what is the legal status?

A: The October-November-December quarter, generally is a very strong quarter for us. But as you remember, this is the first quarter where the new GST tax regime kicks in. Paying GST on GGR we are now starting to collect 28% GST on chips sold to our various customers. Generally, the season for this quarter picks up post-Diwali, Diwali was also slightly delayed. So, we took an informed call that we will just wait it out and see what the customer response is going to be. As expected, before even playing the first bet, you are down 28%. This was something which a lot of customers didn’t see much value. So, after getting into several discussions with them, and with the internal team, we pivoted our business model a bit, and started offering some promotional tips to our players. In the month of December, we saw our revenues practically come back to the same levels that we probably would have done in the month of December previous year. So just to give you a perspective, what we did in the quarter of October-November-December, 55% of our revenue came in the month of October-November. This was a conscious call and was expected. We wanted to see how this plays out. 55% of the quarter revenue came only in December. So, we believe the steps taken by us to retain our customers and give them full value has played out well. And this quarter, whilst I will not give you any guidance, but we are hopeful that we will be able to turn around and probably get back to the same revenues that we were doing earlier. Having said that, one of our ships also is going to dry dock this month. So, to that extent, revenue may be slightly impacted. But on a run rate basis yes, we would be back.

Q: A two-part question. One, if you could quantify, putting all the GST notices and the demands put together, what is that total number that is obviously a matter of dispute right now between you and the tax department? And what is the thought, I mean why not make some part provisions for it, as Mangalam also asked – that is one part of it. And second, you said that in December, the strategy was to offer promotions to mitigate the impact of this ₹28 on every ₹100 that someone is putting up to buy chips. Will your discounting and promotions continue to be at that extent, how much are you mitigating in terms of this 28% GST because this is something that could be perhaps a recurring issue because it deals directly with the business model.

A: I think the total claim in terms of show cause notices issued to us is in the vicinity of about ₹23,000-24,000 crore. To give you a perspective, that is about nearly 5-6 times our market cap. At this point in time, it is not needed. We are being guided and advised by our lawyers who are fighting this, and they do believe that all cases now are going to be combined and be heard probably next month. And they do believe that this is a strong case for us. So, for the time being no provisions we make. Answering your second question with respect to the promotional we need to keep offering our guests Yes, that is the need of the hour and it’s going to stay on, though it’s not going to completely have too much of an impact on our bottom line. But yes, we will have to now consider that aspect, it is going to be an additional cost and to that extent we will have to grow our revenue. Currently, we are running full capacity, we have got three ships on the water and new capacities coming in and once new capacity comes in, which will double the existing capacity, we are hoping that our revenues will grow leaps and bounds.

Q: Do you believe that on a year-on-year basis in quarter four, the revenues will be as much or a little bit better than the same quarter last year?

A: No. The quarter four revenues, we are pretty confident, would be probably in the similar line that the quarter that just finished. I mentioned since we will be going into drydock, we will be out of commission for nearly a month. So, to that extent, our revenues are going to be impacted. Next quarter, which is new year quarter ‘24-25 (financial year). It’s a lean quarter always, we expect that also to be slightly subdued. But July-August-September, I think that is also a good quarter. And by then everything would have played out, matters would have settled, and we believe that we will be back, and business should be as usual.

Q: The other part of the business, the online gaming. When do you expect it to move into the green and also there was talks of IPO? Is that shelved or should we hear about it sometime in 2024?

A: Obviously, with the new tax regime, most of the online companies have now started to absorb the GST costs and are offering some kind of bonuses and promotions to mitigate the impact. This obviously is hitting the bottom line straight away. So, for the online business of ours, we took a conscious call, we wanted to consolidate and ensure that as our players keep on playing, we should not be losing too much of revenue by too much of compensation and therefore, whilst our revenue has remained stagnant, we do believe that there is going to be consolidation taking place in this vertical. So, we are going to wait and watch and see how this plays out. Having said that, our revenues may not have grown but we managed to keep it stagnant and on an EBIT (earnings before interest and tax) level we have made some profits and that is actually going to be the DNA for us that we do not want to lose any more money and we completely focused on our poker vertical, which has always been a mainstay.

Q: What happens to the IPO plans?

A: On the IPO plans, currently with this uncertainty overhang with respect to the GST especially the games of skills, games of chance and the entire online space where there are several judgments which have been given by various high courts, I believe now is all going to be clubbed and would probably come up for hearing sometime in the near future in the Supreme Court. And based on the outcome of that we probably will be able to take a decision. So, if it’s going to be favourable yes, we will be back. If not, then we will have to see how it plays out.

Q: As of now you will wait for some regulatory clarity before you go ahead with the IPO plans – that is the way we should read it, right?

A: That is right.

Also Read | Delta Corp speaks to CNBC-TV18: Here are the key takeaways from IPO plans to GST claims

Q: Let’s talk about your foray into real estate. You had invested about ₹100 crore odd in Peninsula Land. You want to invest about ₹ 250 crore here. What is the potential of business that you see here? How much more investments do you intend to make? What are the projects here because this is a diversification away from your core business?

A: Yes, this can be treated as a slight diversification. As far as real estate goes, it’s in our DNA. In the past, we have done several projects and we exited profitably. In the tie-up with Peninsula, we have taken a small strategic stake. We believe that there are several proposals in the pipeline, and we are happy to join hands with them and do a quick in-quick-out with respect to projects. We are not going to be investing large sums of money and going to have large gestation periods. But there are several redevelopment opportunities which are coming in, the real estate vertical for corporates and reputed brands now seemingly seems to be in our favour. We have got a good amount of cash on our balance sheet. So, to get some more value into our business, we thought this would be an ideal fit for us and therefore the investment. We are going to be having a joint venture between both the companies of which Delta would probably hold a majority stake. And this would be our foray into this vertical and the whole purpose is to develop a reputed brand and play along with the large players also in this business.

Q: That brings me to a deeper strategy question, and I will make it two parts once again. One, given that, as you said in the near future promotions are going to be a way of life because 28% GST is a reality, it is the new law. So, what will be steady state margins now. In the quarter gone by margins came down from 40% to about 23%. So, going forward, as you look at promotions, at the EBITDA (earnings before interest, tax, depreciation, and amortisation) level, what will be a steady margin run rate? And then the larger question with your foray in real estate and hospitality right now being a very small part of the revenue, over the course of the next one year, will we see Delta make a bit of a pivot perhaps into some of these other businesses, to open up new revenue streams?

A: Our businesses are fixed cost business. If our revenues are impacted that impacts our bottom line straight away, which is what happened last quarter. Our margins really fell because our casino revenues dropped for obvious reasons and that impacted the bottom line. Our real growth will come only after we increase capacity, which as you are aware, we have a new vessel probably coming into business around the second or third quarter of the next financial year. This will substantially add to our revenue and once our revenue goes up then we can afford to take the impact on the bottom line as far as our promotional expenses for the casino business goes. So, growth will come, topline will grow and our profits will also increase substantially.

Q: So maybe a revenue mix; FY25 a revenue mix from real estate, this new project that you are getting in from hospitality and of course, the core business itself?

A: Hospitality, typically, supplements our casino business and having remain 10-12-15% of our portfolio, we don’t really see it increasing too much. Our Daman property, as we speak, we are waiting the casino licence, the matter is in the courts. As far as the real estate goes, that is an opportunity that we see currently, we don’t plan to get completely defocused from our main line of business, which is the casino business, but though that opportunity will continue to exist till such time we see growth over there. And yes, there is a possibility that we may pivot into the real estate as required, because there are no great opportunities in the casino business in our country so far.

Also Read | Delta Corp says GST court cases to be heard next month, online gaming IPO plans on hold

Q: The promoter of the company is supposed to be one of the sharpest minds on real estate. So, we will have to see how you will pivot on that front. But from Goa let us talk about Daman since you briefly spoke about that. When is the next hearing. The sheet has been waiting for many quarters for the timing of the resolution of this, at least tell us when the next hearing is so then we can have some bit of a timeframe that maybe some part of 2024 this gets resolved.

A: I think there is something coming up next month. And, the matter actually was well heard last time, unfortunately, the bench changed so we are back on explaining the whole matter again. So, this will go on, and we have also been patiently waiting to get some resolution on it.

Q: You still have a stake in Advani Hotels. You all sold a small portion of that. Any offer on the cards, any plan because if the core business is going to be in a bit of a tizzy, the stock market the shareholders will be wanting for other avenues. So, will you look at selling the stake out there?

A: Yes, of course at the right price.

Q: What is the right price according to you all, how far away is it from current pricing?

A: We have not put a number on that but as and when we see value in the sale price, we probably would be exiting out of that.

Q: Advani Hotels currently trades at a market cap of ₹500 crore odd. You have close to 28% stake. So, there is an immediate ₹150 crore for you for the taking. Do you believe it can go much higher before you go ahead and unlock value or maybe this is a chip that you are keeping with you for a day when you have to encash them for any other business purpose? What are your thoughts here?

A: I would say yes to both your questions. I believe there can be some more value built-in over here. Hospitality, tourism is now doing really well. The cycle has just started. And we do not need any cash right now, we are pretty much well-funded for projects, we have got decent amount of cash on our balance sheet and whenever the need does arise, we would liquidate that for sure.

Q: By when? Is it a price you are waiting for? Is this a time you are waiting for or is this a circumstance that you are waiting for?

A: Actually, none of the above. We will probably just take the call when we feel the time is right.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Top Nifty Realty performers of 2024 get a downgrade from Jefferies after 30% rally

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Global broking firm Jefferies has downgraded some real estate companies that have been on a roll in 2024. The Nifty Realty index surged 1% on Tuesday, posting its recent rally since over wo years. At 10:20 am, Nifty Realty index held gains of 0.99% as compared to a 0.78% rise in the Nifty 50.

The gains were led by Brigade Enterprises and Sobha, which rose 5% and 2.06%, respectively. Among individual stock, shares of Prestige Estates Projects Ltd gained 0.64% after Jefferies downgraded the stock to ‘Underperform’. The brokerage, meanwhile, downgraded Sobha to ‘Hold’.

Shares of Sobha Ltd have rallied over 30% so far this year while the Prestige Estates Projects Ltd stock is up 13%.

According to Jefferies, low inventories and mid-cycle affordability should support approximately 20% residential sales growth this year.

The global brokerage said that offices are bottoming out as domestic demand rises and as SEZ regulation changes lower REIT vacancies.

Jefferies further noted that developer stocks doubled last year, taking the sector to peak multiples. “Expectations are high and easy scaleup is now behind,” it said.

Recently, domestic brokerage house Motilal Oswal highlighted Sobha as its top real estate pick for 2024, projecting a potential upside of 25% with a price target of ₹1,400 per share. Motilal said that Sobha is now set to outperform peers in terms of growth after being an underperformer. It has also revised its pre-sales estimates higher by 4% and 12% respectively for financial year 2024 and 2025.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Budget 2024: Real estate experts pitch for tax rebate increase and affordable housing measures

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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With all eyes on February 1, despite it being a vote on the account Budget or interim Budget, the real estate industry continues to remain hopeful. 

Chairman of ANAROCK Group, Anuj Puri, emphasises the need to enhance the deduction for home loans (u/s 24) by increasing the current ₹2 lakh tax rebate on home loan interest rates to at least ₹5 lakh.

This, according to Puri, could stimulate the housing market, particularly the budget homes segment, which witnessed a decline in demand post-pandemic.

Dhruv Agarwala, Group CEO of Housing.com, Proptiger.com, and Makaan.com, underlines the importance of the upcoming budget in shaping a resilient future for the real estate industry.

Advocating a comprehensive approach that not only promotes affordable housing but also addresses fundamental challenges, Agarwala proposes a tax rebate increase to ₹4 lakh to sustain demand and stimulate the economy.

With several interest incentives expiring recently, experts stress the urgency to revive and extend benefits, like tax breaks, to encourage developers to construct more affordable housing.

Puri suggests modifying qualifying standards for affordable housing to expand eligibility for additional deductions, citing the need for adjustments in property cost criteria within city segments.

Moreover, they propose releasing sovereign land for affordable housing, pointing to lands owned by various government bodies that, if allocated specifically for affordable housing at lower costs, could significantly reduce overall real estate prices.

In the real estate market, 2023 saw record-high residential sales and a surge in demand and supply across top cities, including Mumbai, Pune, and Hyderabad, marking a 20% YoY increase in new launches.

Stable interest rates are expected to further encourage home purchases, setting a positive tone for growth in 2024.

Vikas Wadhawan, Group CFO of Housing.com, Makaan.com, and PropTiger.com, commends the industry’s resilience amid challenges like rising interest rates and global uncertainties.

He notes the pent-up demand post-pandemic and the RBI’s decision to pause rate hikes in 2023 as pivotal factors boosting buyer confidence.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Property market heats up with rising demand and sales; 2024 to see continued rush for real estate

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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India’s housing market defied logic this year to register all-time high sales as home buyers snapped up deals despite a jump in asking prices and the highest interest rates in six years. Market experts strongly believe the demand will not only sustain in 2024 but rise further, albeit slower, on high economic growth and expectations of a fall in home loan interest rates.

The real estate industry saw record sales of residential properties in terms of both volumes and value, real estate market data showed that consumers are increasingly buying into the idea of home ownership post-Covid pandemic. The ouster of dubious developers from the real estate market thanks to greater regulatory oversight via RERA helped boost confidence among home buyers. The insolvency law too has played a role in the elimination of defaulting builders.

According to real estate consultant Anarock, housing sales are estimated to rise by 30% this year to a record 4.74 lakh units in primary (fresh sales) markets of the top seven cities — Delhi-NCR (National Capital Region), Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Bengaluru, Hyderabad and Pune. In value terms, the sales of residential properties are seen at a whopping ₹4.5 lakh crore, supported by higher ticket prices.

Also Read: Decks clear for homebuyers’ registry, benefits to builders in stuck projects in Noida, Greater Noida

Housing prices, which started moving up last year after remaining stagnant for almost a decade, continued an upward trend and appreciated by an average of 14% this year, encouraging investors to return to the primary residential market. ”The changing sentiments of homebuyers — wherein not only are home-renters converting into buyers but also buying bigger homes — has played a huge contributing hand to sectoral and economic growth. The consumer has realised the importance of owning a home and we expect this sentiment to continue in the foreseeable future,” realtors’ apex body CREDAI President Boman Irani told PTI.

Property developers and consultants believe that the industry is witnessing the ”best time” and it is possibly in the first or second year of a long-term upcycle. Sales were strong across price brackets, be it affordable, mid-income, premium and ultra-luxury homes, but what surprised everyone was the huge demand for properties starting from ₹3-4 crore range to as high as ₹100 crore.

”The Indian residential real estate sector experienced remarkable growth in 2023, reaching a pinnacle not seen in the past 15 years. On the back of a strong Indian economy, real estate sector is seeing this robust end user-led growth in the residential demand and supply,” Anarock’s Chairman Anuj Puri said. He expressed confidence that the real estate market will grow further next year.

”Given the ongoing developments and sustained momentum in the Indian economy and residential real estate sector, the upcoming year is poised for continued growth, although the rate of increase may be more moderate due to high base effect,” Puri said. Sales are expected to surpass supply or maintain equilibrium, he said, adding that prices might rise 8-10% in 2024 across major markets.

Big branded developers having a good track record of executing projects reported sales of entire inventories in their project within a few days, as potential homebuyers and investors queued up to book their flats in large numbers, outstripping the supply. DLF, the country’s largest real estate firm, announced sales of 1,137 luxury apartments in March, priced ₹7 crore and above in its housing project in Gurugram for over ₹8,000 crore within 3 days.

DLF, Prestige Estates, Macrotech Developers and Godrej Properties all reported sales bookings between ₹12,000 crore and ₹15,000 crore during the last fiscal year and they expect to better their performance in the 2023-24 fiscal. The consolidation in the housing market, in terms of both supply and demand, gained further momentum towards branded and trusted developers, prompting them to aggressively expand their land bank for future development.

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Among other segments of real estate, the demand for office space is estimated to remain flat this year at 37-39 million square feet across seven major cities. There were apprehensions that the leasing or absorption of office space would decline this year because of geopolitical concerns and the global economic slowdown. The flexible space segment expanded its portfolio in a big way to meet demand from corporates who have started adopting managed workspace instead of conventional office to save cost and also get rid of facility management.

Leasing of retail space in shopping malls and major high-street locations also increased as retail consumption surged. The year also saw India’s first retail assets-backed REIT — Nexus Select Trust — sponsored by global investment firm Blackstone, which also made a complete exit from the country’s first REIT — Embassy Office Parks — by selling 23.5% stake for ₹7,100 crore this month in open market transactions.

REITs are Real Estate Investment Trusts. Builders also diversified their portfolio to develop warehousing projects and data centres projects. Co-living, which was badly hit during the pandemic, recovered a lot.

In a nutshell, builders are upbeat that the housing market sustained strong demand and was able to post a healthy growth. Since 2022, the sector has been on an upswing and seems to have overcome disruptions caused by demonetisation, implementation of RERA and GST laws, the NBFC crisis and the Covid pandemic.

”The prospect of being the world’s fastest-growing nation, coupled with current affordability levels, is expected to sustain the real estate momentum in 2024. Hopefully with inflation and interest rates getting moderated, we may see 2024 as a record year ahead of 2023 on both supply and demand for residential from end users,” Puri said. If the growth trend continues, the size of the Indian real estate market will expand in a big way and may reach $5.8 trillion by 2047 from $477 billion last year, according to a recent NAREDCO-Knight Frank report.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow