CMDA to handle traffic better by appointing Consultant? Is another “ideology” in the “pipeline”?

Tags

, , , , , , ,

The Chennai Metropolitan Development Authority, in order to effectively handle the traffic situation in Chennai, has planned to appoint a consultant in order to ease traffic in the areas bordering Koyambedu and CMBT.  CMDA, in a bid to achieve the same, has invited bids and tenders from consultancy firms to prepare local area traffic management strategies and implementation plan to enhance safety, sustainability and civc amenities for the areas bordering in and around Koyambedu and CMBT areas.  The Consultant would be required to present contemporary operational concepts, analyses and applications of traffic system management strategies, which includes operating, regulating and service policies in order to achieve maximum efficiency and productivity for the system as a whole.  CMDA has also stated that through the application of the Traffic system management strategies, such as operational charges and land use policies, the study area could be used to maintain mobility and safety for growing standard of living by limiting the system capacity growth.  To achieve this, would CMDA propose the implementation strategies, including the institutional arrangements for maintaining the mobility and safety by adjusting minor changes? How would this entire system work?  Would this in reality reduce and regulate the traffic in the neighbouring areas of Koyambedu? Would this reduce the congregation and congestion caused to the Chennai city on the whole? Or is it just another ideology in the pipeline than that of realistic outcomes?

Advertisements

Is the consumer (homebuyer) a king in reality?

Tags

, , , , , , , , , ,

The advent of RERA and GST has brought in much needed transparency and accountability to the reality sector.  The RERA and GST, which is touted to be a buyer friendly legislation, is also acting as a protective guard for the buyers.  However, are the buyers aware of their rights and privileges under the RERA and GST? All home-buyers must mandatorily seek the RERA registration number, without which no project can take place in a locality.  To achieve this, they ought to visit the RERA website of the respective state or union territory to check if the developer and the project is registered with the regulator.  The website of the regulator would inturn disclose all the details related to sanctioned plans, layout, approvals, etc). The title deeds initially did not disclose the carpet area and would merely mention the UDS.  With the advent of RERA, a carpet area is also included in the project list as well as would find itself in the title documents.  A carpet area according to RERA is the net usable area, which excludes the balcony, verandah and terrace and includes area under internal walls. Developers also ought to mandatorily deposit 70 per cent of collection from customers into a separate account, which will be used for payments towards land and construction cost.  The promoters of the project would now have to post quarterly updates of progress of projects on the website for public viewing, which would inturn give the homebuyers a clear idea of the progress of the project.  In case of any delay beyond the period of completion and possession, the home buyers would be entitled to a compensation in case the project gets delayed.  Additionally, a developer cannot also make any changes in sanctioned plan, without two – thirds buyers’ consent before making changes.  In case of any contravention by the Developer, a homebuyer could exercise his option of filing complaints against developers and real estate agents in the consumer court or to RERA authority.

Apart from RERA, GST also passes on certain benefits to the homebuyers.  With the advent of GST, a homebuyer is relieved of the complex tax structure such as VAT and Service Tax, which is now replaced with GST at a unified 18% slab.  The Developers would get input credit, which would in turn be passed on to the buyers.  GST rate on under construction properties is fixed at 12%, whilst the completed and ready-to move-in properties are out of the GST purview.

Therefore, are the ‘consumers’ “king” in reality?  If so, would they exercise their kingship?

Would we have single window clearance?

Tags

, , , , , , , , , , , , , ,

The advent of RERA and GST, had brought the much-needed accountability and transparency in the otherwise organised Realty Sector.  Demonetisation and GST have almost consolidated the realty sector in terms of policies and taxation.

However, there is still much clarity required in the functioning since many states are diluting and doing away with the very essence of this reformed based legislation.   There is an urgent need for enabling the single window clearance for real estate projects that would help the developers save a lot of time, money and effort while initiating new projects.  Developers are keen on getting a single-window clearance mechanism implemented as it would help them to obtain permissions at one-go on a single platform and complete the projects on time. Would it be an easy task to obtain all simplified legal documents and approvals on a single platform?  Why has this issue taken a back seat thereby attributing to the myriad delays in realty sector? Wouldn’t providing a single window clearance provide some respite to the developers and in turn reduce the paperwork and time required for attaining clearances for projects?

IBBI amends IBC 2016, to include homebuyers interests?

Tags

, , , , , , , , , , , ,

The Insolvency and Bankruptcy Board of India, has amended the Insolvency and Bankruptcy Code, to the effect that a resolution plan by the Insolvency Resolution Professional should have mandatorily have a statement about dealing with the interests of all the stake holders.  Does this mean that a resolution plan should include a statement as to how the IRP has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor? Doesn’t this also mean that the Insolvency and Bankruptcy Board, has to also amend regulations pertaining to Insolvency Resolution Process for Corporate Persons as well as to Fast Track Insolvency Resolution Process for Corporate Persons?  Apart from the above, the Board, has also amended the rules for information utilities, providing more latitude to establishing such entities, the result of which an Indian Listed Company could hold upto 100% stake in all information utility which stores financial information as well as helps identify defaults and verify claims expeditiously.  An Indian listed company, is also permitted to hold up to 100 per cent of the paid-up equity share capital or total voting power of an information utility for three years from the date of inception, against the earlier holding of 51%.  Does this move help in ensuring more clarity in terms of taking into consideration interests of stakeholders, including home buyers, concerned during the insolvency process?  Would the homebuyers really be benefitted out of this amendment?

Is Senior Housing catching up in metros?

Tags

, , , , , , , , , ,

The Senior housing or houses for the senior citizens as a gated community has evolved over the years.  In order to match the new demand and lifestyle of the senior citizens, the Developers these days, are offering a broader range of choices and variety of care facilities that allows them to stay with comfort and security. However, India still is lagging behind in this sector of housing, when compared to the other nations. Major reason, could still be attributed to the Joint Family system, the root of Indian Family which is still widely existent in majority of places.  However, this Joint Family system is slowly being replaced, since there is a lack of quality space unlike the older times.  Alternatively, the new age developers could come with certain schemes and projects to cater to this class of investors. According to a recent research report, the top five places, which could emerge as retirement-friendly destinations are Bengaluru, Hyderabad, Mumbai, NCR and Chandigarh, out of which Bengaluru, Chennai, Hyderabad, Coimbatore, Mysore and Puducherry are the key cities in the southern region, which have emerged as popular choices for post-retirement destinations.  However, would the Government address the key challenges for the senior housing sector in India such as lack of availability of skilled manpower, lack of affordability, lesser awareness and a high cost of marketing, etc.? Would the government come up with land for such housing sector, like the Affordable Housing?  Would the government introduce schemes and funds to promote the senior housing?

Would the TN Government reduce penalty for the unapproved plots?

Tags

, , , , , , , , ,

The furor caused by the regularization of unapproved plots, is a well-known and familiar incident with the residents of Tamil Nadu more particularly Chennai.  It was recently reported that out of 1400000 unauthorised plots, only 22000 applications were received, which is a little more than a meagre 1%.  Tasked with improving the aforesaid poor response for regularisation of unapproved plots, the government is mulling over reduction in the penalty for the unauthorised plots. With just 25 days left for curtains to be drawn on the scheme, hardly 22,000 applications have been received for regularisation. Tamil Nadu has at least 14 lakh unapproved plots.  According to the officials of the Ministry of Housing and Urban Development, the development charges, which forms a part of the penalty, are likely to be brought down by 15% in the corporation areas and town panchayats and 25% in village panchayats.  Regularisation charges and fees with regard to Open Space Reservation are a part of the fine that land owners have to pay for regularisation. Despite the scheme being launched on May 4, it is sad to note that the said scheme is yet to evoke a good response from beneficiaries due to high penalty charges. Is this reduction in Development charges due to poor response received? Or, is it due to the receipt of several appeals from various sections of public? Would the government decentralize the while process of regularisation by making it simpler? Would reduction in penalty solve the issues of the hapless homebuyers, most of them who are unaware of the whole impact, the scheme could cause to them?

 

Would 50% of India be urbanised by 2030?

Tags

, , , , , , , , , , ,

The Minister for Housing and Urban Development, has stated that 50% of India, would be urbanised by 2030, due to the advent of Globalisation and urbanisation in the Country.  To achieve this, the Minister in a Meeting stated that the private sector should partner with the government, in the building of smart cities and leverage the huge economic opportunity which it encompassed. The Minister also supported the need for an independent regulator in sectors such as real estate to clean up the system.  In addition to the above, the Swachh Bharat Mission recognises impending challenges of urbanisation and called for mindset change by all stakeholders to help meet the specific targets under the Mission. The bio-mechanisation of waste, mechanical cleaning of drains etc, are some of the initiatives being contemplated by the government under the Mission. In order to achieve this an automatic reset of power prices and separating carriage from content for freeing power pricing from government control.   Privatisation of distribution companies for greater efficiency was touted to be the need of the hour, since the fixation of power tariffs, based on market demand, would lower production costs and make manufacturing competitive. In the meeting it was also urged for tapping the corporate bond market for long-term finance for infrastructure and need for removing the restriction on institutions so that corporate are clear about the risk-return profile.  Wouldn’t it be wiser for the government to redress the issues such as problems of land acquisition, structuring of public private partnership, dispute resolution, and trust deficit, etc?  Would the government further streamline clearances and forward planning  in order to reduce the demand and supply gap in infrastructure?

 

High Rents, Deficit Infrastructure to pose a greater threat to property market?

Tags

, , , , , , , ,

A research report by a leading real estate research firm, has revelead that the artificial intelligence (AI) and automation have a great potential to disrupt the current real estate market, which is already in a deep danger due to rising rents and poor infrastructure, which inturn pose a greater threat to the industry.  Office rents in National Capital Region (NCR) and in Mumbai, traditionally the centres of economic and political power in the country, are more or less stable. However, rents have been rising in the IT-focused cities of Bangalore, Pune, Hyderabad and Chennai.  In the first half of 2017, Banglore and Hyderabad both witnessed single-digit vacancy levels hovering between 8-9 percent due to a dearth of quality Grade A stock, thus leading to increased rental values. Therefore, with the demand for quality, Grade A supply continuing to be high, especially in the preferred and most active micro-markets, rentals continue to stay closer to the higher end with no visibility of any correction in the near to medium term, stated the report.

According to the research report, this trend would persist for at least the next three years, prompting the landlords to be careful so as not to force out tenants in the IT-focused cities by raising rents excessively.  Grade A developments and buildings with high accessibility would continue to command premium rents. The Developers should continue to focus on such buildings, and preferably incorporate new features in building managements systems and alternative workplace solutions.

From a real estate perspective, wouldn’t it be  imperative to perceive the cost reduction and at the same time creating a differentiator by introducing automation in building management systems?   Most metropolitan cities  have been plagued by infrastructure issues for years and the situation has detiorated considerably with increased population in these cities. Would this mean that Artificial Intelligence would in long term allow  cars without drivers and excellent real-time communication with the office for efficient time management? Would Firms need to be viewed as ‘in tune with the times’, ‘future ready’ and ‘next generation, technology friendly’ to attract talent and high-tech enterprise clients?

 

IGBC launches healthy building ratings for residents?

Tags

, , , , , , , , , , , ,

The Indian Green Building Council has introduced a rating program for healthy buildings by the Real Estate occupiers, which seeks to evaluate buildings on the metric of people-centric design and on the basis of certain parameters such as energy consumption levels, water use and waste management. The Healthy Building Rating for Occupants developed by CII-Indian Green Building Council addresses the physical, intellectual and social well-being of its occupants. The current green footprint for India stands at 4.68 billion sq ft of built-up space. The target for the green building’s footprint for the year 2022  including the green cities is 10 billion sq ft., of which the additional 5 billion sq ft would be added in the next five years, out of which at least 5 percent would be contributed by the new healthy wellness system.  The IGBC has urged that the  green building movement should not just be urban centric, it must also reach the rural areas of India. Would IGBC, equipped with these objectives, IGBC drive initiatives to introduce various rating systems customized to meet the requirements of different types of built environment? What about including IGBC green building village rating system? Would the government create opportunities for market transformation and make green building affordable to ensure greater participation?

Would the homeloan rates get cheaper?

Tags

, , , , , , , , ,

The recent decision of the RBI to stick on with the existing repo rate, disappointed many Developers.  The Apex Bank, in its recent Monetary Policy report, has revealed that the overall experience with transmission of monetary policy since switch over to MCLR  (Marginal Cost of Lending Rate)regime from the base rate has not been fully satisfactory as the switch over to an external benchmark in a time-bound manner as internal benchmarks such as the base rate/MCLR have not delivered effective transmission of monetary policy.  It was revealed that the arbitrariness in calculating the base rate/MCLR and spreads charged over them had undermined the integrity of the interest rate setting process. The base rate/MCLR regime is also not in sync with global practices on pricing of bank loans.  The system of MCLR was introduced to make monetary transmission more effective in order to ensure that the benefits of a rate cut by the RBI reach the common man. Under the earlier base rate regime, in the event of the RBI reducing the repo rate (rate at which the RBI lends to banks), banks were generally slow in making a corresponding reduction in their base rate. The MCLR reform had been introduced to offset this situation.  The Apex Bank, by fixing the  bank borrowing rate to a fixed margin over and above the repo rate would reflect the credit worthiness of the borrower, which inturn would be constant unless banks have credible reason to believe there is a change in the borrower’s risk profile. This measure will ensure that banks do not delay transmitting the central bank’s rate cut benefit to the consumers over the loan tenure. Would RBI implement this measure? Would RBI take any action against the erring banks, who are reluctant to pass on the benefits of rate cuts to the borrowers? Would loan pricing ever be unbiased and unprejudiced to borrowers’?