RERA has revived home sector demand

SBI is seen to be among the major gainers from the government’s move to inject equity into state-run banks to enable them to lend more and spur economic activity. In an interview with TOI, Rajnish Kumar, the newly-appointed chairman of the country’s largest bank, talks about signs of change in the economic situation and expects a pick-up in demand after Tuesday’s Rs 7-lakh-crore package for the road sector. At the same time, he says, the bank may reduce interest rates in some basket, given the low credit demand. Excerpts:The government announced a major recapitalisation plan on Tuesday. What is your fund requirement?

We will work out our numbers and estimate the capital requirement. But we are better than the Basel III estimate. Given that we account for one-fourth of the banking system, I am sure the government will prioritise our requirement.

The government has also talked about monetisation of non-core assets. What is your plan, including on the real estate assets?

That programme will continue. It’s a separate exercise.Our properties will be handled by SBI Infrastructure Management but hiving it off is not a very tax-efficient option and there are complications.

How do you see the overall economic situation?

The India story remains intact, which is a view that is shared by everyone. There is no real slowdown in con sumption. In manufacturing sector, things can be better.But the government’s announcements for the infrastructure sector will give a major boost to employment and given the linkages with other sectors, higher government spending will help a lot of industries. I see major gains for cement and steel. Higher manufacturing activity may not see as much increase in jobs as in the past due to automation, which has reduced the employment potential. But more construction will mean more employment and the sector will have a cascading effect on other sectors.

Given the slowdown in growth and inflation remaining below 4%, do you expect RBI to cut rates?

We don’t see an immediate reduction in rates, especially in the December review.

Is there scope for banks such as yours to reduce deposit rates and also lending rates, especially for housing and other retail loans?

It will depend on individual banks. But given that credit growth is muted, there is scope for some further reduction in interest rates in certain baskets. While the overall decision will be taken by the assetliability committee, but some changes may happen.

One of the problems for low demand for loans is over-capacity in the system. Have you seen an improvement in the situation?

There is a problem in sectors such as power, where a lot of capacity is idle or under-utilised. The demand for loans from generation projects is not there. In other sectors such as steel, there is a balance between production and consumption. There will be more demand from the engineering sector in the coming months and I also expect demand from defence production and railways. With the latest thrust on infrastructure, the investment cycle will pick up. Automobiles are doing well with car sales being strong and light commercial vehicles also doing well. There was some disruption due to RERA but now all developers are marketing RERA-approved projects, which has reduced the trust gap between the buyer and the builder. Now buyers feel assured and the residential sector demand has revived. The thrust on affordable housing is also positive for the sector. These are pointers to things turning around (in the economy).

The finance minister spoke about indiscriminate lending between 2008 and 2014, creating problems for banks. Going forward, how do you prevent that?

When we do business, the risk management department has to be very strong, something that is a focus for us. We need to strike a balance between business growth and the risk appetite. Pricing of risk is a very crucial element. In the past, the problem was excess liquidity, which meant that pricing of the risk was not proper. If the risk is higher, then the reward has to be adequate. Due to higher liquidity , everyone was chasing few assets and the risk was underpriced. We need to get the riskreward framework right and the anxiety for growth should not upset that.

GST is seen to have created pressure on SMEs. What is your feedback?

The steps announced by the government should help clear some of the problems as most of them have concerns related to timely realisation of receivables. The move for electronic registration of public sector companies will help clear the dues of MSMEs on time. I hope the private sector also responds in a similar fashion.

Source – TOI

ACT PROTECTS HOME BUYERS – Booking amt capped at 10% under RERA: PM

rotecting home buyers’ interest and their life time savings is one of the top priorities of government, PM Narendra Modi said. He added prior to the enactment of real estate regulation law consumers waited for years to get possession of their homes as they would fall prey to unscrupulous builders.“There used to be ambiguity regarding the area of the flat. Now after Rera, only registered developers can seek bookings only after getting all the required permissions. Moreover, booking amount has been fixed only at 10%,“ The Prime Minister said. He added earlier builders would go to the extent of taking up to 50% as advance amount.

Section 13 of Rera specifies that no builder shall accept amount more than 10% of the cost as an advance payment or an application fee without first entering into a written agreement for sale and register the said agreement for sale.

Modi said builders now need to keep 70% of the payment received from buyers in an escrow account and this amount will be spent on that project only.

 Source – TOI

Law to curb false advertisements for buyer safety soon: PM Modi

NEW DELHI: Government will bring in a new law to crack down on misleading advertisements and set up a central authority to fast-track redressal of consumers’ grievances, Prime Minister Narendra Modi said on Thursday .

The proposed law, awaiting Cabinet approval, provides for fine up to Rs 50 lakh and up to three years’ ban in case of misleading endorsement by celebrities while manufacturers would face fine and jail term for similar offence.

 Addressing an international conference on consumer protection, the PM indicated that the government would introduce the law, which has been in the works for more than three years, during the winter session of Parliament.
“Today we are in the process of enacting a new Consumer Protection Act keeping in view business practices and requirements of the country . The proposed act lays great emphasis on consumer empowerment,” the PM said. “Stringent provisions are proposed against misleading advertisements. A Central Consumer Protection Authority (CCPA) with executive powers will be constituted for quick remedial action,” he said. TOI has learnt that CCPA will be the first ever executive authority to take care of consumers’ interests.While individual consumer complaints can be taken to the consumer commission, CCPA will have the power to initiate class action against a product or service, if it impacts a group or large section of consumers.

“We are changing the law to simplify the process of grievance redressal and for faster resolution. Consumers will be able to file cases in consumer commissions online and from the place of their residence rather than from the place of purchase,” consumer affairs minister Ram Vilas Paswan said. The PM said the proposed law lays great emphasis on consumer empowerment. “Protection of consumer interests is a priority of the government.This is also reflected in our resolution of the New India. Moving beyond consumer protection, new India will have best consumer practices and consumer prosperity ,” Modi said.

 Addressing the summit, UN Conference on Trade and Development secretary general Mukhisa Kituyi pitched for protecting privacy of consumers in view of rising online trade as data provided by consumers are being commodified for marketing purposes. He also batted for nurturing consumer privacy and empowering vulnerable consumers with digital literacy amid growing online trade globally.
Source – TOI

With RERA help, 2 home buyers get refund 3 yrs after cancelling booking

NAVI MUMBAI: After a complaint filed with Maharashtra Real Estate Regulatory Authority (MahaRERA), realty firm Nirmal Lifestyle Kalyan Pvt Ltd was on Monday forced to refund booking amounts for two flats in their project. What makes this case a rare one is that the refund has been made almost three years after the buyers had cancelled their bookings.

Thane resident Mansi Shrivastava and Sandeep Ranjan had booked two flats in 2013 in a MahaRERA-registered project of Nirmal Lifestyle by paying Rs 6.10 lakhand Rs 6.26 lakh for flats worth around Rs 30 lakh. However, due to financial problems, the complainants cancelled the booking in 2014 and sought a refund. Nirmal Lifestyle paid them Rs 1lakh each and dilly dallied on paying the rest.

“They never said they would not return the amount, but they never paid it till the matter was brought before MahaRERA,” said Ranjan.”MahaRERA resolved our issue in a short time.”

 A RERA official said that the buyers were harried due to the construction firm’s attitude. “RERA has come has a boon to them,” he said. After the complaint, the firm simply issued two cheques for Rs 5.10 lakh and Rs 5.26 lakh to the two complainants.
MahaRERA member Vijay Satbir Singh said, “MahaRERA has given stakeholders aplatform to come together to resolve disputes through negotiation.”
A public relations firm representing Nirmal Lifestyle was to respond to a request by TOI for a comment on the issue till the time of going to press.
Source – TOI

Goregaon Mulund Link Road: MoEF grants terms of reference

The estimated cost of the project is Rs 2,000 crore and it would require the diversion of forest land of 21.5 ha, the area under the SGNP.

IN a first step towards the construction of the Goregaon Mulund Link Road (GMLR), an expert panel of the Ministry of Environment and Forests (MoEF) has granted the terms of reference (TOR) for the development of GMLR and for preparation of the Environment Impact Assessment (EIA) with additional conditions.

As per the civic body’s proposal, the planned GMLR project is a twin tunnel road that starts at Goregaon film city and ends at Mulund near Amar Nagar.

The total length of the alignment with approach road is 5.60 km, including the 4.7-km tunnel under the Sanjay Gandhi National Park. The estimated cost of the project is Rs 2,000 crore and it would require the diversion of forest land of 21.5 ha, the area under the SGNP.

In its meeting held last week, the expert panel recommended additional conditions while granting the TOR that includes the background, objective and purpose of the project. In the additional TOR, the panel asked the civic body to conduct a detailed traffic modeling study of entry and exit at both ends, traffic modeling and its analysis to justify the need of the proposed project, impact of the proposed project on the ecology and general biodiversity and noise and vibration study and its mitigation plan to assess the impact on the Sanjay Gandhi National Park.

Besides, the panel has also asked the civic body to study the impact on Tulsi and Vihar lakes as the link road passes between them, study impact of the proposed project on underground water flow and aquifers and cumulative impact assessment of all projects that are being planned in the periphery of the SGNP.

This comes after the expert panel in August had asked the civic body to justify the need for the project since it is passing under the SGNP.

Civic officials said it has submitted the comprehensive mobility plan for 2014-2034. The traffic volume count survey was carried out at 10 intersections at the Jogeshwari-Vikhroli Link Road (JVLR) and few other places, said an official.

Civic officials said the TOR is the first step towards obtaining environment clearance for the project. The project would reduce the travel time between Mulund and Goregaon by almost an hour. It will also reduce traffic congestion on the Western Express Highway and the Link Roads, said another official.

Set up panels on wetlands fast, HC tells state government

MUMBAI: The Bombay High Court on Friday directed the state government to hurry and constitute the authorities under the Wetlands (Conservation and Management) Rules 2017, instead of waiting for the three-month timeframe allowed under the rules.

“You first come out with your committees,” said a bench of Chief Justice Manjula Chellurand Justice Nitin Jamdar, after it was informed by additional government pleader G W Mattos that the 2017 rules, notified on September 26, allow for three months to appoint various authorities, including a grievance redressal mechanism (GRM) committee.

The court heard a public interest litigation by NGO Vanashakti regarding non-implementation of Wetland Rules 2010 in Maharashtra. Wetlands include marshy areas, estuaries, creeks, ponds, reservoirs, lakes and other water bodies. Mattos said following the new rules, “nothing survives in this PIL”.

 Mattos said the State has prepared a brief document earmarking wetlands geographically as contemplated under the 2010 Rules. “Since they are superseded by the 2017 rules, the State will need the time of one year to prepare it in accordance with the new rules,” he added.
Advocate for an intervener, whose paddy field has been included in the wetlands category, urged the court to decide his matter as an order had been passed by the additional commissioner, Konkan division. The judges said he must challenge the order separately as the court cannot decide it in a PIL. Mattos said, “Those lands which are shown included under wetlands can go” before the GRM committee.
It was then that the bench said the government must first appoint the different authorities, including committees, without waiting for three months and must constitute them as early as possible. The state government was asked to inform what was the progress on constitution of the authorities at the next hearing.

Rs 2,000 crore affordable housing body on the cards

MUMBAI: The state government will soon set up a Rs 2,000 crore Maharashtra Affordable Housing Development Corporation to achieve the target of constructing 20 lakh tenements by 2022 under the Pradhan Mantri Awas Yojna.

A senior bureaucrat told TOI on Thursday that the corporation’s key objectives will be to get all organizations involved in providing affordable housing under one umbrella.

The new corporation will be incorporated with the shareholding of the Maharashtra Housing and Area Development Authority , Slum Rehabilitation Authority , Shivshahi Punarvasan Prakalp, Nagpur Improvement Trust, MMRDA, Cidco and National Housing Bank. “The 13-member corporation will be headed by the chief minister, the vice-chairman will be the housing minister, additional chief secretary (housing) and CEOs of Mhada, MMRDA, Cidco, Nagpur Improvement Trust, National Housing Bank will be the members,” said the bureaucrat.

The new corporation will implement the Pradhan Mantri Awas Yojana along with other state housing policy initiatives, encouraging affordable housing projects in collaboration with private developers, create an urban housing fund where all government schemes can be channelized by leveraging commercial finance for housing development.
“The corporation will be tasked with facilitating urban local bodies in conducting demand assessment and preparation of housing-for-all action plan,” said the bureaucrat.
 Ever since Prime Minister Narendra Modi took over the reins in 2014, he has been insisting on providing affordable houses to all by 2022. The prime minister’s office office has been monitoring the progress of the housing for all projects. “In Maharashtra, we have identified district-wise requirement of affordable houses. It has been estimated that 20 lakh tenements will be required to meet the demand
Source – TOI

HC sets 2021 deadline for builder in Powai

MUMBAI: The Bombay High Court on Tuesday directed Lakeview Developers run by the Hiranandani group to construct around 2,398 affordable houses in Powai before June 1, 2021, according to the undertaking given by them. The developer will have to build around 887 flats of 861 square feet each and 1,511 flats of 430 square feet each.A specified number of flats would have to be sold to the Maharashtra government at a rate of Rs 135 per square feet. A division bench of Chief Justice Manjula Chellur and Justice Nitin Jamdar said if the developer fails to meet the deadline, they would have to earmark an additional 10% of the flats for sale to the state government.

 The court was hearing an application by the developer over a 2012 order that restrained it from constructing buildings on its Powai land without permission.The court’s orders had come on a PIL that alleged violation of lease conditions. Hiranandani had signed a lease for the 230 acres of land in 1986 in a tripartite agreement with the state and MMRDA. As per the agreement, the builder was to construct 50% of the flats admeasuring 430 square feet and the remaining of 861 square feet. Instead, according to the petitioner, flats were allowed to be merged to as large as 4,000-5,000 sq ft and sold at prices touching Rs 7 crore. One of the important conditions was that around 15% of the floor space index consumed would have to be sold to the state government at a rate of Rs 135 per square feet. These flats would be used by the state to house its staff. The PIL had claimed MMRDA initially imposed a fine of around Rs 2,000 crore on the builder, which was brought down to Rs 89 crore and finally the state further slashed it to Rs 3 crore. As per the 2012 HC order, the builder has to construct 2,200 flats admeasuring 431 square feet and another 2,200 flats admeasuring 861 square feet.
Earlier this year, the HC appointed a committee to inspect and verify the affordable flats constructed and the remaining ones that need to be built. The flats will be in six residential towers.While some flats would be ready by December 2018, the rest have to be constructed before June 1, 2021. The court has allowed the developer one month to apply for permissions and around six months for the BMC to grant approvals. The builder will also have to open a joint account with the proto-notary of the HC, where the proceeds from around 207 flats would be deposited.
Source – TOI

Happening hubs

Undri-Pisoli belt is getting lots of focus from the homebuyers due to the availability of homes within their budgets.

Pune’s outskirts are growing at a faster pace. They sport a new look with sound civic infrastruc ture and good residential project. Ample availability of land sets Pune apart. With the residential realty market in the Pune city area getting saturated, the adjacent areas are quickly evolving as preferred destination for the home buyers.

Areas on Pune East are emerging as residential hotspots. Undri Pisoli belt situated in one of the emerging areas of Pune is getting lots of focus from the home buyers due to the availability of homes within buyer’s budget. It is well known for IT & ITes presence and the development happening in the area. Undri is one of the most logical residential property destinations in Pune. However, it has only come into prominence over the last 4-5 years because of the demand spill-over from saturated areas like NIBM Road and Wanowrie.

Its development in recent years has led to a greater thrust on civic infrastructure in Undri. Demand for homes in this location is driven largely by employees from Pune’s manufacturing and ITITeS industries, to whom it is a suitably affordable alternative to the pricier areas that cater to these workplaces. Undri is conveniently connected to many of Pune’s key localities. The well-developed social infrastructure of Wanowrie, Salunke Vihar and Camp is readily accessible to Undri’s residents.

IT crowd has been driving Pune’s residential market. Magarpatta Township’s IT-centric development as well as the industries in Hadapsar account for a significant share of the residential demand in this corridor. Wanowrie, NIBM Road and Kondhwa are already packed with development and the Undri-Pisoli market offers itself up as the next development corridor. Demand for properties here comes from both investors and end-users who seek to upgrade to larger apartments at affordable rates or buy second homes which are near to their existing ones.

Apartment prices in areas like Hadapsar and Kharadi have increased significantly and breached the affordability threshold for entry-level home buyers, and Undri-Pisoli is a viable alternative. It also has quality schools, which is a major plus The Undri-Pisoli belt, which includes Yeolewadi, Pisoli, Undri and Mohammedwadi, has several demand drivers working for it. It is very suitable destination for the working population at Magarpatta and the city’s CBD. It caters to the extended demand from Hadapsar and still boasts of relatively affordable real estate rates. It enjoys good connectivity to central Pune Owning a home is several times more preferable to renting in Pune, and these families are attracted to Undri’s relatively lower property rates.

Paying due heed to the specific requirements of this segment of buyers, some of the leading developers in Undri are offering all-inclusive packages on projects which have all the accoutrements of a modern, comfortable lifestyle. This factor is proving to be a further magnet for demand, which in turns encourages the faster development of this region.

As of now, Undri is primarily a destination for mid-income housing, and most of the projects there are geared towards this segment. It also holds great potential for luxury offerings once the demand for budget homes has been adequately met. Due to its superior location advantages, it is an ideal location for premium housing as well.

Source – PT

Should you bank on real estate?

Is real estate an ideal investment asset class when compared to gold, equities, MFs, etc?

We tell you why, despite its erratic performance, it is still a prized asset.

Capital appreciation

Dilkhush Shah, an interior decorator had only Rs 25 lakh to invest. She was advised to opt for mutual funds and gold rather than real estate. However, her research made her realise that real estate stands as an ideal asset class beyond the emotional urge to just own a home.

The statistics clearly indicated how no other asset class had given the CAGR (Compounded Annual Growth Rate) as high as property, despite the short-term drop in sentiments.


“I chose to invest in property since it is a time-tested investment globally. Yes, with such a small amount, I could only afford a property at Palghar (Mumbai). Keeping the area’s development in mind, I feel this is the best investment bet,” says Shah.

High control

The statistics of the ROI, over a long period of investment, have always been in favour of real estate. In the cyclic ups and downs, other asset classes like gold or equity may look more attractive, yet cannot match property.

“I had invested in some stocks that fell from Rs 300 to Rs 45. Since the said company is on a downslide, there is absolutely no hope of recovering my losses. With property, there can be cyclical ups and downs but if you are determined to stay invested, you will not only recover, but also make gains in the process,” says Anupam Agarwal, a home-buyer who has also invested in a commercial shop.


If gold has given returns of 12 percent, residential apartments have given returns of 16 percent and commercial shops have given even higher returns.

Inflation hedging

Real estate is the best bet against an inflation hedge, as it is the only asset that loses little value in periods of rising prices.

Tax savings

In investments like mutual funds or insurance, only a limited amount of investment is covered for tax saving purposes. Also, in other investment instruments like gold, there are no tax-saving benefits as such.

Financial freedom

An investment in property also ensures financial freedom for Indians. Now, with REITs becoming a reality, real estate scores over other asset classes and provides an investor financial freedom.

Portfolio diversification

Despite markets being at a two-year high, only a few stocks are at similar highs most of them are still languishing. In contrast, the momentum in real estate may have slowed down, yet there has been a constant appreciation in the range of 5-20 percent.

Source – PT, Pune