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No Room to Reduce Housing Prices: CREDAI

New Delhi: A day after RBI governor Raghuram Rajan advised builders stuck with unsold inventories to cut rates, realtors' body CREDAI today said there is no scope to reduce housing prices and demanded that interest rates on home loans as well as taxes should be reduced to boost demand.

"While we respect the RBI governor's concern over kick starting the real estate sector, it would be prudent to say that from the developer's side that a substantial reduction in prices has already happened across the country," CREDAI president Getamber Anand told PTI.

"Any further decrease in sale prices would mean an out of pocket expense for the developers thereby acting as the last nail in the coffin of an industry which contributes so much to the economy and employment at large," he added.

Mr Anand said housing prices have gone down by 15-20 per cent on an average in last two years across India, while input costs have risen by 15-20 per cent.

The Confederation of Real Estate Developers' Associations of India (CREDAI), which has about 10,000 realty developers as members, sought that government should rationalise taxes and circle rates while interest rates on home loans should be cut.

"It is now largely up to the state to rationalise taxes, ready reckoner rates and streamline the approval process to bring down property prices and provide relief to the end user.

A rate cut in home loans is the need of the hour to relive the home buyer of the huge burden of mounting EMIs," Mr Anand said.

Real estate sector, particularly residential segment, is facing a huge slowdown for last 2-3 years, resulting in significant delays of up to 6 years in completion of projects.

The CREDAI president added that the industry, on its part, is eager to focus on execution and supply of good quality housing stocks to enable the government's ambition of 'Housing for All' by 2022.

On Thursday, Reserve Bank Governor Raghuram Rajan exhorted realty developers stuck with high inventories to cut their rates even as the country's largest lender SBI sought RBI's nod for cutting home loan rates.

"I do believe that if real estate developers who are sitting on unsold stocks bring down prices, that will be a very great help to the sector because once there is a sense that prices have stabilised, more people will be willing to buy," Dr Rajan had said at the second SBI Economics and Banking Conference held in Mumbai.

According to a report by property consultant Knight Frank India, over 7 lakh housing units remain unsold in eight major cities and it will take more than three years to exhaust the inventories.

The National Capital Region (NCR) market alone had 1.9 lakh unsold homes as of June.

These cities are Delhi-NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad.

Housing sales dropped by 19 per cent and new launches by 40 per cent during January-June 2015 in these eight cities as compared to the year-ago period.

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Realty Trends

Home prices near most-affordable levels in over 30 years: HDFC


Home prices may have been on an upward spiral for many years, but the cost of owning a house in India remains near the most affordable level in over three decades, shows data compiled by mortgage giant HDFC Ltd.

The average price of a home, purchased with a housing loan, rose to over Rs. 45 lakh in the 2012-13 fiscal year -- marking the fourth consecutive year of uptrend from about Rs. 25 lakh in the year 2008-09, HDFC has said in a presentation.

However, factors like an even greater surge in the personal income levels, tax incentives and lower interest rates, have resulted into houses becoming more affordable to purchase, it said.

 

 

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India Property Investment Gyan

Major schemes for affordable housing to be modified: Girija Vyas


NEW DELHI: Major schemes meant for providing affordable housing to urban poor will soon be modified to make them more people-friendly, the government said today and invited the private sector to contribute more actively in this area. 

Speaking to reporters here, Housing and Urban Poverty Alleviation (HUPA) ministerGirija Vyas today said her ministry is modifying all the major schemes including the Rajiv Awas Yojana (RAY), Rajiv Rinn Yojana and the, Affordable Housing in Partnership scheme and added enormous budgetary support has been earmarked during the current plan period. 

Secretary HUPA Arun Kumar Misra told reporters that a fund of Rs 35,000 crore had been allocated to the ministry for the implementation of three major schemes, including RAY, which was being run in as a pilot project earlier under 12th five- year plan. 

He said the ministry would require approval from the cabinet for the implementation of these schemes and efforts would be made that through these funds 2 million affordable houses are encouraged. 

He said that in addition to the central government funds, banks and credit institutions would be providing funds for construction of affordable houses. 

Vyas said that with urbanisation, the number of urban homeless and area under slums had grown. 

Vyas said there was a need for private developers to develop economic models to foster affordable housing for economically weaker sections and lower income group households in urban areas as government efforts in this direction needed to be supplemented. 

Vyas also said a technical group, set up by her ministry, had shown that out of 18.78 million housing shortage in the country, 96 percent shortage is in EWS and LIG category and for this huge investments and private sector participation were required. 

Misra said the group set up by the ministry has suggested incentives for the affordable housing sector included concessions to development-related charges and service taxexemptions. 

It also sought direct tax rebates for affordable housing projects and inclusion of the sector in the 'infrastructure facility' he said and added the task force had felt that governments need to still provide direct capital grant support to affordable housing projects. 

Misra said that in the symposium held today where states, experts and private sector representatives were present, there was unanimity on many of the suggestions.

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Green Property- Eco Homes

Reclaim your city space: Projects in Delhi, Mumbai and Kolkata aim to transform lives

 
Three projects in three cities aim to transform the lives of people who live close by. The one in Mumbai hopes to transform a congested area into a green precinct; the one in Delhi converted an open drain into a walkway, while Kolkata hopes to bring the crowds back...