Developers To Cast Off Inventory Properties To Boost New Property Sale

Due to the continuous market slow down in real estate sector developers have adopted a recent sale boosting strategy where they are consciously tapering off the on hand inventories. Recent statistics of realty sale in India proves that more new-built residential apartments are sold in India across the top seven realty market of the country in the first three quarters of 2016. Simultaneously there have been remarkable new developments taken place during this period. This is the record selling that has occurred within past 8 years.  Experts opine that this the point of time while developers are promoting the sale of new constructions where on the other hand they have be constantly trying to lessen the inventory level. Since Kolkata has been always reasonable to every class of home-buyer it’s seen that there has been an upsurge in the sale of flats near Kolkata airport in the second half of 2016.
According to JLL India Nearly 1.20 lakh housing units were sold across Mumbai Metropolitan Region, Delhi-National Capital Region, Pune, Bengaluru, Chennai and Kolkata between January and October whereas 1.06 lakh new constructions came in front.
Ramesh Nair, chief operating officer of JLL India said, ‘’ With demonetisation and several other regulatory reforms like Real Estate Regulatory Bill, the Benami Transactions Bill and the GST, the time may now be ripe for market which will see the genuine buyer coming back.’’ As per Nair demonetization will have short-term impact on national real estate market and the sale of newly launched apartments across the major cities of the country. Realty index has fallen 14.8% since November 8 after the declaration of ban on higher currency notes. Nevertheless real estate sector has been the witnessing sloth market since past few years, demonetization came as an add-on.

According to the Edelweiss Securities latest report, ‘’ “Companies, specifically in the mid-cap space, that have locked strong pre-sales over the past few years should benefit from earnings scale up despite a slow physical market. This will be driven by pending recognition of sales already executed along with prospects of improved macro-led rise in new sales.’’ The report also suggests that it has a ‘buy’ rating on companies like Oberoi Realty , Sobha, Sunteck Realty , Godrej Properties and Brigade Enterprises. The developers’ balance sheet will maintain to perk up due to domestic accruals and supervision. This will facilitate them to set out surplus funds towards value accretive land or project acquisition and help mature their net asset values.

In 2016 the first quarter saw some outstanding launch numbers than sales, followed by slowdown in consecutive quarters. During the third quarter, the number of apartments sold across India exceeds the new launch by 10,000 units.

“Overall, this trend seems here to stay for some more quarters. It would be interesting to see if 2016 sets a new benchmark in units launched versus units sold, surpassing the historic year of 2008 for good. This data should also serve as an eye opener for fence-sitters expecting a price drop, which may not hap pen. The negative sentiment gripping this sector from the last one year or so may well be misplaced. “Nair said.

Alternatives Before Central Government If GST Not Put Into Action Within Sept 2017

A national economy fillips when the taxes are property paid. India is one of those countries where there are individual types of taxes have been in the system for the decades. Research says that GST implementation can simplify the tax paying sector as this is one of a kind single paid proposition against the preceding categories.  But it seems like that the central government is unable to cater sufficient volume of money by the end of 2016 as the PM announced during his money-ban speech. Now if GST execution misses the deadline of Sept. 2017 then this could bring some worst case scenario according to the current finance minister of India.

At a Glance GST-
• Single tax to replace multiple levels
• Single tax duty on goods and service
• Automated process to lessen human interface
• Diminish compliance cost of the taxpayers
• Lesser logistic and inventory cost

GST should be implemented as early as possible to bloat Indian economical infrastructure. Agriculture and real estate are two prior sectors from which the nation earns its revenue. After currency ban these two sectors are affected in a big way. With the demonetization movement the parliamentary logjam has been an everyday issue causing by the oppositions insistent attacks. Meanwhile this GST issue has been overlooked and deferring throughout this inside-out. There will be no tax law if this time limit has been surpassed by the system. "If the GST doesn't come into force by September 16, there is one view that existing specified tax legislations would cease to have effect. Hence, the government is working towards ensuring that GST is implemented before 16th September. It needs to be seen that if the same is not achieved whether the Government has an alternative plan," said Dharmesh Panchal, India - West Indirect Tax leader, PwC.

Many big companies and conglomerates were helping vendors, suppliers and distributors to be GST prepared before the currency-ban. Some of these companies provided special chartered accountants and technical experts to these small and mid scale industries. Small companies that don’t have any direct involvement with these big industries they might have to handle the tax complexity and technology by themselves."Companies, mainly medium and small ones, are tackling the impact their businesses have faced due to demonetization. Even the biggest of the companies have put GST on their low priority list. Everyone is expecting that it (GST) would be postponed," said a senior tax expert.

Industry trackers and market experts has pointed out a couple of ways on the options that government has if they miss the deadline of GST implementation date of the H2 2017. They opine that the government may not bum any circuitous tax as the in progress taxes will go off with the GST execution.  As demonetization has impacted government’s planned timeline for GST implementation government can’t purposely cease existing tax rules. Reports suggest that many small and medium industries like- transport, logistics, chemical manufacturing firms, iron and steel industries won’t be able to comply GST by next year. In that case government should go for status quo ante or seek presidential extension for GST implementation. "The dilemma the government faces is that whether to go ahead with GST and deal with the further impact on the economic growth or postpone the GST and tackle the blushes," a tax law expert said.

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New Tax Implementation Will Impact On Initial Revenue

The Bills have been already passed in the state assembly for the introduction of unit area assessment (UAA) system to resolve property tax issue. The KMC authority is all the set to draw up a plan for new property tax rule to put into operation. Now the KMC officials have been working hard on the regulation part to get the concluding approval from the government. But some officials fear that the new tax system won’t be an appropriate to be implemented in an unplanned city which could lead sinking revenue drawn in the early days.

Under UAA the city has been divided into six different categories on the basis of utilities available by the civic body. Thus neighborhood will be rated on the ground of accessible facilities such as- drinking water, drainage system and easy access to Metro. Residents are likely to fill up some property valuation related self-declared documents and submit them to the local KMC counter as well. This document will contain a calculated form of annual valuation of respective properties. If the property undergoes any remodeling or alteration that has to be there in the documents to avoid penalty charges.

The Civic Assessment Dept. will have to come up with the UAA regulation within next three months. Then it will be sent to the municipal affairs dept. for processing before it gets published. The after-effect of the implementation has already been a subject to uneasiness to the officials, as they believe this won’t be an easy task to implement a new rule replacing the old one in an unplanned city like Kolkata. An official said, ‘’ "We are at a crossroad, with the old system giving way to a new one. We fear we will lose revenue for the first three-four months. This may prove negative.’’

The civic body has to sum up an impossible task with in this short period of time. The task is of helping out 6.5 lakh citizens to realize and asses their property valuation by their own. The entire system will entirely an online process. The residents should be properly trained in the new system.  Currently the IT dept is burning night oil and KMC might farm out the job.

 SD Group
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India Needs Experienced Brokers In Real Estate Business

By 2020 real estate industry is likely to grow into a $180 billion stroke of luck. Adding on the Govt. has shown some energetic influence in development of urban housing estates and advanced infrastructure. Striking residential apartments of Jessore road is one of those up-scale, ultra luxury apartments near by the Kolkata airport territory what we have an example right now. As per the sources 25 million homes, 40 million residential units, 98 smart cities will be decorating India’s real estate industry within 2022. For a colossal manpower is required for accomplishment of the entire project.

So far Indian realty market has blamed for its unorganized process and flimflam practices. Largely people believe that this is the sector where maximum amount of black money circulates. Developers face steady problems with the project approval as it has been a complex process and itself. Brokers in this practice are mostly unregistered and associated with local bodies and a large portion of the sale is performed verbally. The broker segment in India is estimated to be a $4 billion industry having 500,000 brokers.

Real estate brokers/agents refer to those people who negotiate on behalf of one person in a transaction of transfer of his plot, apartment and asset by way of sale with any other person and earn his commission or remuneration fees. Now with the implementation of RERA 2016, all agents have to register under RERA to be actively part of any real estate transaction. In more advanced market they have to undergo 45 hrs of professional training, followed by annual continuing professional development (CPD) training and essentially pass the license exam. .  An organization like Real Estate Management Institute has been introduced for broker certification purpose.

To be on the same page of global realty Indian real estate industry has been gearing up with more professional transparency, regulatory vigilance for enhanced buyers’ protection. Brokers need to be certified to complete in bigger realty market. In order to ensure no spoiler in the practice there has been a sentence of detention for purging of further fraudulence.