Real estate industry welcomes “game changer” Model Tenancy Act

 The Mumbai real estate industry on Wednesday welcomed the Narendra Modi cabinet’s formal approval for the Model Tenancy Act which would enable states and union territories to enacting fresh legislation or amend existing rental laws suitably.

In the offing for a while, the Act will help overhaul the legal framework with respect to rental housing across the country, which would help spur its overall growth.  The Model Tenancy Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country.  It will enable creation of adequate rental housing stock for all the income groups, thereby addressing the issue of homelessness.

Reacting to the development, Dr. Niranjan Hiranandani, National President, NAREDCO said, “The Model Tenancy Act will facilitate unlocking of vacant houses for rental housing purposes.  It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage. The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market.”

“Industry bodies like NAREDCO have been requesting authorities for a Model Tenancy Act which would create a vibrant, sustainable and inclusive rental housing market in the country.  This Model Tenancy Act will ensure creation of new rental housing stock for all the income groups, addressing the challenge being faced by home seekers,” he said.

“There was a need for a new law, which would make things easier for all stakeholders – tenants, landlords and investors – to transact and deal in rental housing,” he said.

Real estate industry veteran and former CEO of JLL India, Ramesh Nair said, “Housing for all cannot be successful without a robust rental housing model. The act will help reduce slums and also improve the quality of housing in the country if well implemented. All efforts of previous governments have focused only on the ownership of housing. A robust implementation can also help attract FDI given the current interest levels of global real estate funds towards “beds” (residential rental) and “sheds” (warehousing).”

 

Hailing the Model Tenancy Act as a “game changer”, Anuj Puri, Chairman - ANAROCK Property Consultants, said “The Model Tenancy Act will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country. To ensure speedy redressal of disputes, the Act also proposes to establish separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing.”

He said this Act can fuel the rental housing supply pipeline by attracting more investors, and more rental housing stock will help students, working professionals and migrant populations to find urban accommodation (especially in COVID-19-like exigencies). “Once implemented in all fairness across states, it will go a long way in formalising and stabilising the rental market. It would also revive the fortunes of not just the rental market but the housing sector at large. However, even while the Model Tenancy Act is a step in the right direction (providing a clear roadmap for states to follow), it will remain to be seen to what extent the states will toe the central government’s line.”

 

Dr. Samantak Das, Chief Economist and Head Research & REIS, JLL said the Act will provide a guiding framework to all states to make their respective Tenancy Acts contemporary. “Current Acts will give way to the new ones where uniformity will prevail, and it will give confidence to homeowners for renting out of existing vacant properties. Also, if the states implement the Tenancy Act in true letter and spirit of the Model Act, we will inch towards institutionalisation of rental housing market. In case of RERA, the central Act helped states like Maharashtra to make MahaRERA successful to a large extent. On similar lines, we may expect Tenancy Acts in states to become more efficient in providing level playing field to both owners and tenants.”

 

Shishir Baijal, Chairman & Managing Director, Knight Frank India, said “In the recent past, a spate of policy reforms in quick succession have accelerated the development of Indian real estate sector into a more mature and organised sector. Laws relating to RERA, REIT, GST and now Tenancy will aid the property sector’s transformation into a more transparent and consumer focused one; and thereby attracts the world’s best institutional investors and developers for greater participation in the country’s realty sector.”

 

“While tenancy in commercial real estate segment has been a well-established tenet of the market model, the fractured landlord tenant relationship in case of housing segment has discouraged development of market model and obstructed institutionalisation of a rental housing market. The Model Tenancy Act has provisions to regulate the rights and duties of both the landlord and tenant and this shall balance the scale between both these counter parties. We believe this law is a step in the right direction and are glad to see that in just less than two years since the introduction of model law, and amidst the pandemic, this will become a ground reality.”

 

Rohit Poddar, Managing Director, Poddar Housing and Development Ltd said, “The approved Model Tenancy Act (MTA) will help to regulate and promote rental housing in the country and will play a crucial role in increasing the supply of rental homes, which in coming times, will be an essential requirement with rising population. The Act will help in building a better tenancy market. The terms and conditions of the rental tenancy are clear to both landlords and tenants and reduce a significant number of disputes that take place due to unwritten agreements, thus the move will benefit both the landlords and tenants by creating a cohesive and sustainable environment. The approved framework will boost the overall rental housing market in India.”

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Secretary, CREDAI MCHI said, “The Model Tenancy Act will boost supply in the rental housing segment. There are many homes that are vacant as people are afraid to give them on rent. The Act will make renting more lucrative for both, landlords and tenants, by plugging the many gaps that currently exist in policies regulating the rental housing segment. The model tenancy law will eliminate anomalies and give a boost to the real estate sector."

 

Anuranjan Mohnot Managing Director & CEO, Lumos Alternate Investment Advisors said, “The implementation of the Model Tenancy Act is one of much-required reform in real estate especially when the country has a peculiar problem of housing shortages and lakhs of residential units are vacant across India. The legal comfort to landowners about quick redressal to the problem of overstaying tenant, as well as protection of tenant rights on arbitrary rent increase etc can bring much required institutional investment in the `built-to-rent’ residential segment in India.”

 

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory said, “The Model Tenancy Act will protect the interest of both renters and the landlord. While tenants have to submit at least a year's rent as security deposit it will also address the overstay by tenants and make eviction easy for landlords. Even if states set up the regulatory framework, it is up to the developers as to how comfortable they would be to engage in this housing segment as the rental yield that varies anywhere from 2% to 3% may not be lucrative enough for them. Compared to this, the developers pay higher interests on their loans for project development."

 

Pankaj Bhansali, COO, Eqaro Guarantees Pvt Ltd

 said, “It is a landmark reform that will usher in a new era for the real estate sector in the country. The move will help address the high number of vacant residential units in India, which is over 11 million houses, making it economically productive, reducing litigation, and encouraging trust between the landlord and the tenants. The new Model Tenancy Act will also encourage and attract institutional investments into the residential assets. Rental bonds coupled with the new act will provide the much-needed ease of renting the houses for landlords. Rental Bonds and the provisions of the Act will help address the friction points in the tenancy process, thus promoting trust between the landlord and the tenant. The new act would bring in over 11 million urban houses into the rental market and help address the country's massive housing shortage.”

“We expect states to act swiftly and adopt the law, have the necessary regulatory structure in the form of state tribunals to adjudicate on the required matters and provide a common framework across the country. The rental yield in India is amongst the lowest in the world. The Act once adopted and enforced by states promises to create a sustainable and inclusive rental housing market in the country. Like the RERA law, the Model Tenancy Act will reform the rental housing business in India with utmost transparency,” Bhansali said.

 

Rivali Park becomes first SWAMIH project to be completed

 Finance Minister Nirmala Sitharaman hands over possession virtually to home buyers

Finance Minister Nirmala Sitharaman on Thursday virtually handed over possession to homebuyers of CCI Projects’ Rivali Park project in Borivali, which was acknowledged as the first completed real estate project under the alternative investment fund Special Window for Affordable & Mid-Income Housing (SWAMIH) for stressed projects.

The SWAMIH fund was launched by Sitharaman in November 2019 to provide last mile funding to real estate projects starved of construction funding due to liquidity issues in the market. CCI Projects, a part of the Cable Corporation of India, was one of the four real estate developers from Mumbai Metropolitan Region to get approval for the last mile funding. Rivali Park Wintergreen is the Phase 1 of the project spread over 7 acres consisting 708 units ranging from 1 BHK to 4 BHK.

Addressing the virtual event, Sitharaman said she is very pleased to see that SWAMIH Fund has completed its first residential project. More so, it is an important achievement since the SWAMIH Fund has worked its way through the difficult period of COVID-19 pandemic, she added.

The Finance Minister said that the Government of India had stepped in to provide funding to the stressed affordable and mid-income housing projects thereby giving relief to the home buyers who had invested their hard earned savings. Smt. Sitharaman said the Government believes that once these homes are constructed and completed, a large amount of capital locked up in these projects will be released.

The Finance Minister said it will provide employment to construction workers and will provide impetus to the allied industries such as steel and cement. It will improve the portfolios of Banks and NBFCs and significantly improve the economic sentiment in the nation, she said. She was all praise for SBICap Ventures team for converting a policy announcement into an on-the-ground funding institution that has achieved significant progress within a short time span.

The virtual event was also attended by MoS Finance Anurag Singh Thakur, Ministry of Housing and Urban Affairs Secretary Durga Shankar Mishra, Secretary, Department of Economic Affairs Ajay Seth, State Bank of India chairman Dinesh Kumar Khara, SBI CAP Ventures Irfan Kazi, and CCI Projects director Rohan Khaitan.  

Khatau said SWAMIH fund approved Rs 180 crore funding for Rivali Park in February 2020 shortly before the national COVID-19 lockdown was announced and the project has used Rs 125 crore. He said his company was just starting the construction process in March 2020 when the lockdown was announced. He said thankfully the government allowed labour at construction sites if the developer organised facilities for them to live on site as per COVID-19 protocols. “We expanded capacity and deployed 600 workers on site. We had to create more space for workers to live on site, and follow COVID-19 protocols. We had medical checkups for the workers twice a week. We had 60 contractors and vendors working in close co-ordination. What was crucial was that SWAMIH’s objectives aligned with our objectives – which was giving homes to people,” Khaitan said.

“This is a remarkable milestone in our commitment towards delivery & handover of the Wintergreen phase to our customers, who have placed immense faith in us and our vision to create a holistic experience. We are very pleased and grateful to have traversed the last mile with timely financial aid and intervention from the SWAMIH Investment Fund. We have obtained Occupancy Certificates (OCs) for the entire project and have commenced the possession process that will help us deliver the promise of a dream home to our valued homebuyers,” Khaitan said.

 

Irfan Kazi from SWAMIH Fund said the investment fund had approved 204 projects in 41 cities for last mile funding which will benefit 1.16 lakh home buyers stuck in half complete projects possession of their homes. In the next one year, the fund will complete 26 projects which will ensure completion of 12,600 homes.

 

Asked what differentiates SWAMIH fund from other lenders, Kazi said the fund has a stringent scrutiny process that involves five third party analysis, and it provides complete funding without being dependent on sales and collections by the developer. “We provide enough finance to complete the project, and all funding is used only and only for construction and completion of the project. The fund takes a construction finance approach, not loan account finance. We also had a Project Management Company representative on site at Rivali Park who was doing daily reporting on labour movement, construction progress etc,” he said.

 

 

 

Industry welcomes RBI’s measures for COVID-19 second wave

Indian industry has welcomed Reserve Bank of India’s new set of measures including Rs 50,000 crore liquidity boost to ramp up the COVID-19 related health infrastructure.

RBI announced the scheme which will enable banks to provide fresh lending support to a wide range of businesses including vaccine manufacturers, importers and suppliers of vaccines and priority medical devices, hospitals, pathology labs, makers and suppliers of oxygen, drugs and ventilators.

Reacting to the development, Harsh Vardhan Patodia, President, The Confederation of Real Estate Developers’ Association of India (CREDAI) said, “The announcements made by the RBI Governor today reflect that the Central Bank and Government are well aware of the impact of the second wave of the pandemic, shall proactively take measures to counter the economic fallout and take necessary steps in order to revive the economy. The Rs 50,000 Cr term liquidity facility to “Ease Access to Emergency Health Services” will come as a big relief to healthcare service providers, equipment manufacturers and patients alike. The Credit to MSME and Resolution Framework 2.0 for COVID related stress assets will provide a lifeline to many struggling individuals, entrepreneurs and enterprises.

 

Patodia said CREDAI expects similar measures which shall address concerns of large businesses and labour-intensive sectors like real estate will be announced in days to come. “We strongly believe that measures that make accounts classified as SMA 1 and SMA 2 also eligible for restructuring and interest moratorium coupled with additional liquidity under ECLGS 3.0 passed onto real estate projects will kick-start the engines of economy and job creation, which are most important to offset the effects of the second wave.”

He said it is high time that the Government considers reclassification of SMA across businesses as this would ease liquidity pressure on NBFCs and Banks. “The aftereffect of the second wave will last for a much longer period because of the exponentially large number of infections and deaths and the true impact is yet to be assessed. Hence, proactive measures, much larger than those announced during the first wave of the pandemic last year, are the need of the hour,” he added.

 

Dr. Samantak Das, Chief Economist and Head of Research & REIS, JLL India said the Resolution 2.0 measure by RBI will  provide relief to real estate linked SME stakeholders.

“RBI has proactively stepped in to address the financial challenges arising due to the second wave of the pandemic. The Central Bank has announced a COVID loan book to support those directly involved in addressing the pandemic (healthcare sector) with on-tap liquidity of INR 50,000 crore to banks. RBI has also recognised the hardships faced by individuals, small businesses and medium and small enterprises due to the lockdown and provided Resolution 2.0 measures for restructuring loans to small borrowers up to Rs 25 cr.”

“Other than individual borrowers, this will provide major relief to real estate linked SME players especially suppliers of input material for the sector. The working capital review will also help these stakeholders to tide over their liquidity issues as their cash flows have been partly impacted due to the recent lockdown restrictions in various states,” Dr Das said.

Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE said, “With today’s announcement, RBI focused on the revival of the Indian economy by adding adequate liquidity that ensures further stability of the overall market in the current scenario. The COVID loan scheme will boost economic activity and aid the growth of the MSME’s sector as well.”

“The announcement of restructuring of loans for small borrowers is a proactive move as it will provide some relief against asset downgrade and also provide relief to lenders. Liquidity support to the healthcare sector is also a commendable step. These decisions by the central bank to tackle the current situation are much appreciated and well-timed to ensure stability and economic revival,” he said.

Nitin Bhasin, Head of Research - Institutional Equities, Ambit, said, “RBI’s announcements today should be read in the context of their pro-activeness to allay any potential concerns around either MSME or MFI credit quality stress, as the 2nd wave of Covid has hit these segments. But we don’t find these to be such a big boost like last year’s announcements, especially the moratorium. To be fair, the RBI has already done the heavy-lifting last year by slashing rates to record lows and infusing a copious amount of liquidity in the system.”

 

“The problem today is of demand, as reflected in the very poor credit offtake, especially from the corporate sector, and these announcements will not have a very significant impact on the same, and hence the economy,” he said.

Naveen Kulkarni, Chief Investment Officer, Axis Securities, said, “RBI’s measures announced today have largely addressed the need of small borrowers, individuals as well as businesses, and MSMEs who have been amongst the worst affected in the second resurgence of Covid. Besides liquidity measures, easing lending to the above strata by extension of restructuring , boosting medical infrastructure through PSL recognition will help bring relief in the financial ecosystem. We believe small finance banks like Ujjivan, Equitas and MSME lenders such as DCB, City Union to benefit from some of these measures.”

 

Maharashtra discontinues stamp duty rebate; developers disappointed

Mumbai Metropolitan Region developers expressed their disappointment after Maharashtra government refused to extend the ongoing 2 per cent stamp duty rebate on property registrations valid till March 31, 2021

Chief Minister Uddhav Thackeray, Deputy Chief Minister Ajit Pawar, and Revenue Minister Balasaheb Thorat met on Wednesday to review the decision. CREDAI MCHI, which represents over 1,800 developers from MMR, had submitted a memorandum to Thorat last week seeking an extension of the 2 per cent stamp duty cut by another 12 months as it would help not only the real estate sector, but provide impetus to the economic recovery since more than 250 allied industries are linked with the construction sector.

Though the government refused to extend the stamp duty rebate, it agreed to the developer’s demand to keep the Ready Reckoner rates unchanged for 2021-22. It also decided to continue to the 1 per cent stamp duty rebate for women property owners aimed at encouraging women to be co-owners in family property assets. The government resolution issued by the government laid down a condition that women who take the benefit of the stamp duty rebate cannot transfer the property to male co-owners for 15 years.   

Commenting on Maharashtra goverment's decision about non extension of reduced stamp duty and unchanged ready reckoner rates, Dr Niranjan Hiranandani - MD- Hiranandani Group and National President- National Real Estate Development Council (NAREDCO) said, "Maharashtra government has played a leadership role in rolling out revolutionary measures like stamp duty reduction to augment sluggish real estate market post-Covid pandemic crisis. The extension of this benefit would have played a catalytic role in keeping up the pace of sales and property registration momentum across the micro markets and different housing segments in the state.”

Hiranandani pointed out that the stamp duty rebate had also resulted in increased revenues for the government. “The proven data clearly reflected uptick in volume leading to increased state revenue in second half of FY20-21 and multiplier effect it draws on employment and GDP. Unchanged ready reckoner rates is good, but Industry expected reduction in ready reckoner rates to foster real estate transactions. Hence, NAREDCO requests the state government to kindly reconsider the decision, proving it to be a win-win situation for all." Last year, the Maha Vikas Aghadi government had reduced the ready reckoner rates marginally for Mumbai with little impact on market rates.

Reacting to the developments, Deepak Goradia, President, CREDAI MCHI said, “We are disappointed with the Maharashtra Government’s decision to not extend the stamp duty rebate beyond March 31. Given the current economic climate, the reduction in stamp duty charges not just galvanized homebuyer sentiments, but also enabled the industry to spearhead the state’s economic revival in the post-covid era as well. An extension would have ensured the sustenance of the sales momentum while providing the necessary support to one of the strongest economic pillars and employment generators in the country.”

Goradia said the industry would continue to look forward in continuing the dialogue with the government and make representations to convince the government to to resume the reduced 3 per cent stamp duty rates in the near future

“We are glad that the State Government decided on keeping the ready reckoner unchanged which reflects the market conditions more precisely. The move to provide a 1% stamp duty rebate to women homebuyers is also noteworthy and honours the crucial role and contribution of women towards homebuying,” he said.

The bold step by the Maharashtra government to cut stamp duty rates by 3 per cent till December 31, 2020, and by 2 per cent till March 31, 2021 had reignited the demand for homes that had touch its lowest point in April at the peak of the COVID-19 national lockdown. Maharashtra’s policy initiative was followed by neighbouring Karnataka too. Most developers were in favour of the government continuing with the stamp duty rebate.

Rohit Poddar, Managing Director, Poddar Housing and Development Ltd said “The stamp duty reduction has spurred the sales and registration in Maharashtra to an all-time high, assisting the government in generating more revenue than the actual rates would have yielded. To sustain the momentum, it is essential for the government to extend the stamp duty reduction till March 2022 which in turn would help in generating even more revenue while de-stressing the real estate sector, thereby bringing the economy back on the growth track at high pace.”

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Secretary, CREDAI MCHI said "The State Government's decision to discontinue the stamp duty benefit will be a huge distress for the homebuyers who would have decided to buy their dream home but couldn't do so because of the severe impact of the pandemic. We had requested the Government to extend the stamp duty benefit for atleast a year so that more and more buyers could fulfill their wish of buying their home. We will continue to urge the Government to reconsider their decision and extend the stamp duty benefit further in interest of the homebuyers."

According to international property consultants Knight Frank India, after the stamp duty rebate was announced on August 26, the property registrations have grown incrementally month on month with a staggering 75,688 units registered between September 1, 2020 and March 24, 2021. Home sales achieved its highest ever mark in December 2020 with 19,581 units registered, and a 111 per cent increase over December 2019 registrations. In the run-up to March 31 deadline, the Inspector General of Registrations had clocked nearly 17,000 registrations in March, an increase of 234 per cent over March 2020.  

The Knight Frank India report also pointed out that from September 1, 2020 till March last week, the city exchequer had collected Rs 2578 crore in revenue from apartment sales which was a substantial increase over Rs 1756 crore worth revenue collected between January to August 2020 period.  

Shishir Baijal, Chairman & Managing Director, Knight Frank India said, “The reduction in stamp duty rate has helped mitigate the pain in the long-beleaguered real estate sector of Mumbai. As expected, with the revival of the economy, the sales momentum grew stronger in Q1 2021 and the euphoria amongst homebuyers continued despite the 100-bps increase in stamp duty rates. A combination of lowest home loan rates, reduced house prices along with rebates and payment flexibility offered by developers, as well as increased household saving rates, have provided the right growth environment for the residential segment to grow.” 

132 killed in 5 fatal accidents in 2020: IATA Safety Report

 

The total number of aircraft accidents decreased from 52 in 2019 to 38 in 2020, and the fatal accidents declined from 8 in 2019 to 5 in 2020, revealed the 2020 Safety Report released by Montreal-based International Air Transport Association (IATA), which represents over 280 commercial airlines worldwide.

 

The eight fatal accidents in 2019 had claimed 240 lives. In 2020, three accidents were reported with jet airliners and two with turboprops killing 132 people, the report said. In May 2020, Pakistan International Airlines flight PK8303 from Lahore to Karachi had crashed shortly before it could land at Karachi airport killing 97 out of the 99 people on board including 8 crew members. Only two passengers, a bank executive, and a mechanical engineer on board the Airbus A320 survived the crash. 

 

The second biggest accident was reported in India. In August 2020, an Air India Express Boeing 737 from Dubai to Kozhikode skidded off the runway after landing on the table top runway, killing 21 people including both the pilots.

“On 8 January 2020, the world experienced a shocking tragedy with the shooting down of Ukrainian International Airlines Flight 752, minutes after takeoff from Tehran Imam Khomeini International Airport. All 176 people on board perished. Similar to MH17, this is another tragic example of what can go wrong around conflict zones. The incident is considered an unlawful act and is, therefore, included in aviation security statistics and not in this report,” the executive summary of the report said.

 

The accident categories in 2020 listed in order of the number of fatalities were:

• In-flight Damage (2) with 104 fatalities

• Runway/Taxiway Excursion (2) with 24 fatalities

• Controlled Flight into Terrain (1) with 4 fatalities

 

The top five accident categories in 2020 listed by the frequency of accidents (including the ones with fatalities) were:

• Runway/Taxiway Excursion (9)

• Hard Landing (7)\

• Gear-up Landing/Gear Collapse (6)

• In-flight Damage (5)

• Ground Damage (3)

 

With COVID-19 pandemic severely impacting the normal commercial flight operations, the accident rate has shown an increase. The accident rate increased from 1.11 accidents per million flights in 2019 to 1.71 accidents per million flights in the COVID-19 pandemic year though total flight operations in 2020 reduced by 53 per cent, the report said.

 

 

 “Flying is safe, although the industry did take a step back on performance in 2020. The severe reduction in flight numbers magnified the impact of each accident when we calculate rates. But numbers don’t lie, and we will not allow this to become a trend. We will have even sharper focus on safety during this period of reduced operations and as flight schedules are rebuilt when the world reopens,” said Alexandre de Juniac, IATA’s Director General and CEO.

 

For the first time in more than 15 years there were no Loss of Control Inflight (LOC-I) accidents, which have accounted for the largest share of fatalities since 2016. “The lack of any such events in 2020 was a positive development. Nevertheless, based on the initial reports from the investigation into the tragic loss of Sriwijaya Air SJ 182 early in 2021, we must continue to learn and improve,” said de Juniac.

 

 

Residential home sales recover by 90 per cent in Q1, 2021: JLL report

 Residential home sales in the first quarter of 2021 have recovered by over 90 per cent of the pre-COVID levels across top seven cities and new launches witnessed a 27 per cent jump over Q4 2020, according to JLL Residential Market Update - Q1 2021 research report.

The report said 25,583 residential units were sold in Jan-March quarter of 2021 compared to 27,451 units sold in Jan-March quarter of 2020. Mumbai showed a recovery of 84 per cent compared to pre-COVID levels with 5,779 units sold in this quarter compared to 6,857 in Q1 of 2020. Neighbouring Pune, however, has recovered fully and clocked 3,745 unit sales in this quarter compared to 3,728 units sold in Q1 2020.

Barring National Capital Region and Bengaluru which 92 per cent and 57 per cent recovery compared to pre-COVID levels, Chennai, Hyderabad and Kolkata showed Pune-like over 100 per cent recovery, the report said. 

Sales volume increased across most markets

	Q2 2020 (in units)	Q3 2020 (in units)	Q4 2020 (in units)	Q1 2021 (in units)	Growth (%) Q1 2021 over Q4 2020
Bengaluru	1,977	1,742	2,535	2,382	-6%
Chennai	460	1,570	2,500	3,200	28%
Delhi NCR	2,250	3,112	4,440	5,448	23%
Hyderabad	1,207	2,122	3,570	3,709	4%
Kolkata	481	390	438	1,320	201%
Mumbai	3,527	4,135	5,026	5,779	15%
Pune	851	1,344	3,323	3,745	13%
Total	10,753	14,415	21,832	25,583	17%

Mumbai includes Mumbai city, Mumbai suburbs, Thane city and Navi Mumbai

Source: Real Estate Intelligence Service (REIS), JLL Research

 

“The sustained growth in sales presents clear signs of demand and buyer confidence coming back to the market. This has been on the back of historically low home loan interest rates, stagnant residential prices, lucrative payment plans and  freebies from developers and government incentives such as the reduction of stamp duty in states like Maharashtra and Karnataka (for affordable housing). The ease of lockdown restrictions and the commencement of the vaccination drive have further aided in bringing buyers back to the market,” said Dr. Samantak Das, Chief Economist and Head Research & REIS, JLL.

“In the fourth quarter of calendar year 2020, India’s economy returned to growth territory, recording a 0.4% rise in GDP. In tandem with the GDP growth, the pace of recovery in the residential market intensified with sales increasing by 51% when compared to the previous quarter. In Q1 2021, sales of residential units continued an upward trajectory. Sales, at the overall level, increased by 17% on a sequential basis,” he added.

Delhi NCR witnessed the maximum new launches jumping up from 699 units in Q3 of 2020 to 2,244 in Q4 and 4,734 units in Q1 of 2021, an increase of 111 per cent. Mumbai, which not only enjoys the 2 per cent stamp duty rebate but also 50 per cent reduction in premium costs announced by the Brihanmumbai Municipal Corporation, also saw new launches jump from 2,294 units in Q2 of 2020 to 4,616 units in Q1 of 2021, a jump of 43 per cent over last quarter. Pune also witnessed a 57 per cent increase in new launches. Across seven cities, the new launches shot up from 14,780 in Q2 of 2020 to 33,953 units in Q1 2021. The focus in new launches remained squarely on affordable housing with 69 per cent of the new launches in the sub Rs 1 crore category homes, the report said.

“The Government is committed to boost affordable housing. The recent Union Budget has extended the benefit of additional interest deduction on home loans for first-time homebuyers in the affordable segment. Further, there is a time extension to claim the tax holiday on profits from affordable housing projects until March 2022. The housing loan going below 7% for the first time in the last decade also triggered sales in all segments in the residential real estate. The buoyancy in the market manifested in the form of low mortgage rates and stable prices are expected to continue and attract fence-sitters and serious end users,” said Siva Krishnan, Managing Director, Residential Services (India), JLL

The report pointed out that the COVID-19 pandemic has decisively shifted the home buyer’s focus in favour of established developers. Cautious home buyers are giving increase preference to developers with sound execution capability, transparent business operations and offering quality products.

The report said the residential market will continue to be a “buyer’s market”. Though home prices have remained largely stagnant across all seven cities, in some markets, developers continue to offer attractive freebies like stamp duty rebate, no EMIs for 12 months and payment schemes to woo the fence-sitters into the buying decision.