Joint Venture Real Estate Projects Under WBHD Radar

West Bengal housing department will now review the formation of joint venture real estate promoting companies. Specifically the brokerage and development companies of giant commercial properties like- shopping malls, hotels in New Town and Rajarhat and some other recent developed Property in Kolkata north. Housing minister and Mayor of Kolkata Mr. Sovan Chatterjee said, ‘’The alleged violations were being looked into and action would be initiated against firms that had violated the JV norms to go in for commercial development in the satellite township during the Left Front regime.’’

According to the government statistics there are seven big-shot real estate companies which had tied up with the state government complied by the JV norms. Meanwhile the government has summoned a few of those real estate firms in charge of their contribution in transgression of JV agreement with the state government. Rest of the JV partner real estate firms is also being kept account. Speaking about the JV agreement the housing minister also stated,’’ These JV firms have developed malls and hotels on the land earmarked for housing projects for the masses.’’

Chatterjee also put light on the fact that development and brokerage companies which singed JV with the state government for promoting lower income group and middle income group housing shifted into endorsing commercial development thereafter without notifying the state government and violating the JV agreement. In the JV firms the private companies had 50% stake functioned with the land equity offered by the state government. There after LIG apartments are sold under the cost price and MIG flats just at cost price and HIG condos at a quality range.

After TMC government came into the ruling position in 2011 chief minister has declared that JV firms would be under investigation for alleged violations and stopped allotted lands to such real estate companies. As an aftershock these companies has stopped their duties. It’s not like that JV firms don’t do business, just that there has been no activity regarding the same purpose. As per the official updates 2 major real estate firms that had close association with their earlier ruling government, as the members of the board of directors of these firms were in the family relations of the erstwhile ruling party head honchos.

Digging the past the minister said, “We will probe into the irregularities and take action against the errant firms. We don’t want to name any particular persons involved in such irregularity.” On the contrary JV companies came with the fact that the land which had been allotted to them for commercial real estate development has been used for the same as per the official records. They also mentioned that there was a provision to embark on 10% related activities. Development of malls and hotels were also scheduled as per government agreement.

As per the director of one of such firms “There has been no change in land purpose. All the projects where malls and hotels have been developed were allotted for the very purpose. The housing department had raised the issue two months ago, following which we went with documents and clarified the matter.” 

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.

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
To inquire about the progress of flats near BT college Jessore road contact us. The property will complete within the H1 2017. Luxury, lakeside apartments.
Call us- (033) 23341245

Reflex Of Demonetization On Home Buying

Mr. Sukanta Samanta who was almost few steps closer of his home-buying demonetization came to him and many more real estate investors no less than a natural calamity. Samanta being a software professional had preference for property in Kolkata north for his occupational patronage. Now ministers are having talkathons on this topic and home-buyers are on the back foot. Over the past few days many other potential property buyers have been inquiring us about the impact of banning currency notes on real estate business. Here we are trying to provide the best answers against peoples’ query centering around demonetization on real estate investment-

1. People have been often asking us questions like for demonetization will the price of home go down?
Home price won’t come down as majorly these days’ home buying is done with home loans. Thereby cash deposition has a minimal role in this entire coup. In the past couple of years property prices have been grown by 3-4% in the metro cities. Yes for resale market it’s an overall not a rosy time. Because the resale market has only cash involvement, so this sector is likely have a price correction. Short term and medium term property sale is likely to witness some persecution.

2. What will be impact of demonetization in real estate business?
Demonetization is likely to have a short term effect on real estate business. Resale and land property market will affect as there is a severe cash crunch in the current market and these two sectors of real estate do their business through cash transaction. Luxury properties are likely to see a higher price correction in the short term. Real estate market is going through negative sentiment and will continue with the same for coming 3-6 months.

3. Will builders cut short the new property price?
 What made people think like that, where there is an overall slow-down in the entire real estate business. Properties are already being sold at 2012 rates. RERA rules have been in the action since this august for buyers’ protection besides Govt. is also backing builders to come forward with more and more affordable housing against the high market price of raw materials and cost of labors.

4. Is it a good time to buy property?
Why not? Builders will be in need of cash liquidity. You will get the best negotiating price against your home-buying; also they will offer you exciting discounts on stamp duties and maintenance fees. 90% of the first time home-buyers fund their property with home-loans. Home loans rates expected to come down soon. EMIs will drop so that people can afford big apartments against the same investment. It’s now up to the buyers to utilize this moment as an opportunity or not.

Under this circumstance people will get to sense the actual affordability – Get a pre-approved home loan & arrange funds for the rest 20% from your savings. As per your budget restriction search properties with well practiced property portals and have one to one interaction with the seller. Brush up on your negotiation skills. You can actually save more than you thought of.

Build Riches With Residential Real Estate Venture

Based on the chosen locality the investment in residential properties can breed gold. The area has to meet certain strictures such as- good social infrastructure, accessibility of adequate public transport and satisfactory economic t bustle to carry on progress and intensification. All these factors have equal importance to invest in a NA-certified land approved for residential development.

For lower investment risk residential property investment in Tier 1 and Tier 2 cities should be restricted. It’s wise to invest in properties where price tag falls between 2500-5000/ sq ft., this particular range of properties serves drawback protection against capital value attrition. Simply put, cost of construction and minimum cost of land makes the price division safer and almost guarantees capital approval.  Now for low cost of living in east India Kolkata comes on the top of the list having greater potential of future residential real estate investment. The City of Joy is considered as best capital value depending on the demand and supply dynamics of the micro market, the excellence of development, calculated value of the location and timely conclusion of projects among the other metros in the country.

There are few tips before investment- 

The property cycle needs to be understood as to recognize the best entry point.
The class of construction has an important value through out. A slow down market often answers poor design and construction quality.
Leasehold titles issued by Govt. must be thought through.
The developer’s agreement for all the finances for end of the project should be verified.
The investor must understand the sale agreement thoroughly.
The integrity and previous track record of the developer needs to be researched.
Size matters a lot. All the size and dimension of the plot and property should be clearly understood from the starting level. Small plots might cost less but often they show reluctance to resell.

The time of transference of land and asset delivery must be overtly clear.
Market experts have predicted great real estate development potential in Kolkata.Flats near BT college Jessore Road are one of the outstanding luxury ranges of green housing properties that have redefined residential revolution of Kolkata.