Jhumur Ghosh welcomed the panelists, following which Ravi Sinha questioned the global competitiveness of Indian real estate in the wake of thousands of abandoned projects waiting for the funds, the debt-equity ratio imbalance, lending issues, pre-launches without RERA sanctions, and the developers’ defending the indefensible.
The issue of stalled or delayed project is one of the major pain points of the Indian real estate sector currently. With buyers feeling the heat of delays, it is not surprising that some are now considering completing the projects themselves. This falls within the realm of possibility if the project in question has sufficient cash flows but is delayed for other reasons.
At a time when the developers across the cities are struggling to either cope up or align with the emerging regulatory compliances like the RERA, these numbers clearly indicate that Chennai has not only been among the front runners in compliances and best practices but also ahead of the competition curve as far as the launches and absorption are concerned.
This growth is witnessed across five major cities – Mumbai, Gurugram, Noida, Bengaluru and Pune, where 4000 homebuyers were surveyed by 360 Realtors to understand buying trends. One of the key driving factors for the increase in investor interest is the impact of policies such as RERA. Assured rentals and EMI payouts after possession, offered by developers have also significantly boosted investor confidence.
Housing Shortage in the urban areas is particularly high in Economically Weaker Sections (EWS) at 10 million units, followed by 7.4 million units in Lower Income Group (LIG).Until now, Central assistance to the tune of INR 13,583 Crore has been released and Interest subsidy of INR 1,859 Crore has been credited. Under the PMAY(U) scheme ( as per 8thJuly 2018 release by Ministry of Housing and Urban Poverty Alleviation, Government of India), 51 lakh units have been approved, 28 lakh units have been grounded and only 8 lakh units have been completed.
It is generally accepted in the Indian market that rental yields in the country are often much lower than elsewhere in the world because relatively few people seek rented homes: 66 per cent of homes in Indian cities and 90 per cent of homes in rural areas are owner occupied.
The Indian real estate developers are going over-board in capturing the fantasy of the rich Indians who are also expat professionals. But they seem to have gone completely off target when understanding the long-term housing needs of these Non Resident Indians (NRIs).
For a large expat workforce that depends on the rental houses across the cities, the quest has always been to find a house where the rental prices are not high. Though the rental values might seem to be undervalued in the Indian context due to higher capital values, the fact is that when compared to affordability and median income of the cities, the rental values are mostly exorbitant. This is more true in the context of the top 10 cities being the job magnet.
There are five locations across Mumbai that offer better rental returns than the average rental in the city. These are the markets where the average rental values are in the range of 3% and above. These markets are spread across the Eastern and Western Suburbs.
Affordable housing and Mumbai often sound to be quite contradictory. The peninsular city with limited land parcels and load on the infrastructure often makes an urban planner fumble for offering any sustainable solution. Critics hence dismiss the very idea of affordable housing in the city. In Mumbai the development and growth of affordable housing has also been facing significant challenges owing to a gamut of fiscal, regulatory and urban issues.