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Real Estate Newsletter January, 2013

____________________________________________________________________________ KBS &

CMR, Khandala 1

Industry News Revised ready reckoner rates to pinch pockets Run-up to budget: real estate industry demands infrastructure status Increase in circle rates good or a huge dampener to the realty sector Real estate firms under lens for alleged service tax evasion Getting real on realty Corporate News Godrej Properties Q3 profit soars 24% on high sales Mistakes to avoid while buying a house Competition Commission of India modifies DLF-buyer agreements

Metros News Planning to buying a house in Mumbai? Now is the right time Delhi govt approves development of 91 unauthorised colonies Pune's Ambegaon on the rise Projects News Eight city clusters to be developed at Rs 2,100 cr Finance ministry weighs aid to incomplete housing projects Government News Delhi Development Authority to triple floor area ratio, city to go vertical Govt plans to set up Land Authority of India to monetise unutilised land HUDCO aims to finance 5 lakh housing units construction in FY13

About Us January, 2013


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KBS & CMR, Khandala 2

Industry News

Revised ready reckoner rates to pinch pockets BS, January 28, 2013 Be prepared to pay more to buy a house in Mumbai. For, the Maharashtra government has increased the ready reckoner rates by 18-20 per cent in Mumbai and 5-30 per cent elsewhere in the state. This will lead to an increase in the base value of residential properties. Therefore, any escalation in the ready reckoner rates results in higher property prices and, as a result, in higher stamp duty and registration charges. Ready reckoner rates are minimum prices set by the government, below which sales are not allowed. It is the average rate in any given area or a region. Ready reckoner rates have risen for all properties including residential, commercial, shops and land. Hence, any rise in the rate indirectly means that the property prices in that region will increase.

While properties will get dearer, home buyers will have to shell out extra on series of other things. Along with stamp duty and registration, one will have to shell out more on value-added tax (VAT), service tax, and property tax, as all these are linked to the agreement value or ready reckoner rate, whichever is higher. According to experts, all these expenses including duties and taxes constitute around 25 per cent of the property cost. Run-up to budget: real estate industry demands infrastructure status BS, January 20, 2013 The National Real Estate Development Council (Naredco) said the housing sector should get infrastructure status, which will help them avail tax benefits and easier flow of credit. Ministry of Housing indicated that they are hopeful that this time focus will be on affordable housing. Naredco also suggested that rental housing should be made more attractive to address the issue of shortage of houses.


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The council suggested that the deduction from rental income under Section 24(a) of the Income Tax Act be increased from 30% to 50%. “This will promote rental housing. And for women and senior citizens, the deduction could be 100%, keeping social requirements and empowerment of women in view”, it said. Developers blamed the tight monetary policy of RBI for the slackening housing demand. According to a Cushman and Wakefield report, there was a 16% drop in the residential market across major cities in India in 2012. Realty players were cautious of launching projects as the gap between the launch and the absorption numbers reduced to 32,000 units in 2012 compared to 82,000 and 94,000 units in 2010 and 2011 respectively, reflecting weak demand, according to a Knight Frank report. Consultancy firm, DTZ expected an extension of interest subvention scheme with enhanced limit on housing. “We hope Finance Minister relaxes norms pertaining to External Commercial Borrowing (ECB) for low cost housing”, said Anshul Jain, CEO, DTZ India. Government should look at development of Special Residential Zones (SRZs), added Jain. Budget 2012-13 saw interest subvention scheme of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for another year. Then finance minister Pranab Mukherjee had also announced measures to address shortage in low income housing by allowing External Commercial Borrowing for low cost housing units and setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans. Builders in the NCR region are currently looking more into ECB, which will carry on in 2013, said Raj Sharma, MD, Best property deals. Housing Minister Ajay Maken in a recent interview to Business Standard had said that affordable housing should be granted infra status so they can get loans at affordable rates. “Now affordable housing comes under commercial real estate. Once it’s a part of the infrastructure sector, four% of bank loans should be reserved as priority loans for affordable housing”, he had said. Like for infrastructure projects, a delay of more than 6 months should not be considered as Non-Performing Assets, he had suggested. Increase in circle rates good or a huge dampener to the realty sector ET, January 19, 2013.

The increase in circle rates came as a huge dampener to the realty sector in 2012. But what is the real implication of this raise for homebuyers: is it a curse all the way or could it be a blessing in disguise. Real estate properties are registered at circle rates. Circle rates were introduced in July 2007 only and the capital was divided into eight categories. This is the minimum valuation at which properties are registered with the government.


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Recently, the circle rates were raised in Delhi in the range of 20-200 per cent across different categories of properties in the city. The decision, effectively, 'spared' people in middle-class neighbourhoods and urban villages across the city, and in many ways is being seen as a ploy to appease vote banks and garner greater moolah for the Delhi government's revenue department. But there are other aspects to this increase: for genuine buyers this may be good news as they can avail higher loans from banks and financial institutions. These institutions typically disburse loans on the basis of sales deed, which take into account circle rates. Buyers can avail up to 80-85 per cent of the total circle rate as home loan, which is extended only on the basis of the white component of transaction amount. On the upside, the revision in circle rates can help minimize the difference between the average market rate and the existing circle rates. While the increase tends to make registration of property a costlier affair, it also allows property valuation to move closer to fair or market value. It's a well-known fact that market value of property is far higher than the value shown on the sale or lease deed to pay stamp duty. "The raise is expected to bring greater transparency into the market," says Sachin Sandhir, the MD of RICS South Asia. "Even as circle rates have been revised upwards, the prices at which properties are being registered continue to remain below the actual market value and provide scope for the absorption of black money in property transactions. Therefore increase in circle rates can definitely help bring about a greater degree of transparency in the market and while the total sales price will increase marginally with the upward revision in the base rates, it is likely that the impact on the consumer will be negligible. Therefore, it is unlikely that genuine buyers will defer property purchase or registration as a consequence of the upward revision in circle rates," Sandhir says. How are circle rates determined: It seems many factors are taken into account while determining the benchmark 'circle rate' like land rates, multiplicative use factors, cost of construction, type of structure, minimum rates of built-up flats and multiplicative factors for private flats. However 'circle rates' are not determined based on any specific methodology or calculation but rather as a function of market dynamics and trends, which reflect the number of properties being registered with the authorities concerned and the price bands at which property transactions take place. Property prices on the other hand are governed more by the principles of demand and supply. Real estate firms under lens for alleged service tax evasion ET, January 1, 2013.

NEW DELHI: Suspecting large scale service tax evasion, financial intelligence agencies are carrying out massive searches against various real estate firms across the country. The on-going search operation started a fortnight back in which the evasion by firms providing real estate services including renting and other collaborations was detected, official sources said.


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The Central Economic Intelligence Bureau (CEIB), a nodal agency for collection and dissemination of intelligence related to financial sector, and Directorate General of Central Excise Intelligence found inputs on alleged service tax evasion, the sources said. The sleuths have searched various real estate firms and builders offices in the national capital and in suburban areas including Noida, Ghaziabad, Bhiwadi, Mumbai, Hyderabad, Kolkata, Vishakhapatnam and Chennai among others, they said. The real estate firms are required to pay 12.5 per cent service tax. Many of the deals mainly related to renting of land, house or any other commercial properties evade tax net as the money transactions are not recorded in government documents and taken directly and illegally, they said. A Finance Ministry report has said that land and real estate are possibly the most important class of assets used for investment of black money. "As immovable properties are not usually comparable, valuations are different. This imparts flexibility to the valuation process, and makes it an ideal investment for black money. "Both 'black' and 'white' savings are utilised for investment in land and real estate, which provides hedge against inflation apart from a profitable alternative for investment for black savings," it has said. Getting real on realty BS, January 1, 2013.

Year 2012 was one of the worst years for the real estate sector. Squeeze on cash flows, scaling down

residential projects, higher vacancy in retail, lower absorption of office space, and liquidity crunch

described the past year for the sector.

However, the next year promises to be much better. The reasons for this optimism are many: The

opportunities for the realty sector from the opening of foreign direct investment (FDI) in retail, the

likelihood of key policy rates being cut in early 2013, and the expected recovery in the economy next year,

which will improve the overall sentiment.

Corporate News

Godrej Properties Q3 profit soars 24% on high sales

FE, January 30, 2013.

Godrej Properties today posted a 23.97 per cent rise in net profit for the quarter ended December 31, 2012

at Rs 35.48 crore, mainly on improved sales resulting from new projects despite a flat sentiment in overall

real estate market.

The company had posted a net profit of Rs 28.62 crore in the corresponding period previous fiscal.


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Its total income for the quarter under review jumped 77.86 per cent to Rs 266.41 crore as against Rs 149.79

crore in the year-ago period.

"The sales numbers have improved mainly on the back of new projects which we launched during the

quarter. Despite flat sentiment in the overall real estate market, we received good response for our

launches," company's managing director and chief executive Pirojsha Godrej told reporters here.

During the quarter, the company launched four projects across key markets of Mumbai, NCR and

Bangalore, he said.

"We expect to launch few more projects in Mumbai, Kolkata and Pune in this quarter. But these launches

are subject to certain approvals we are awaiting," Godrej said.

"We are strategically developing our presence in crucial markets and adding value attractive transactions to

our portfolio, which clubbed with our unmatched brand equity, differentiated business model and strong

execution capabilities, will drive our future growth," Godrej said.

Mistakes to avoid while buying a house

BS, January 7, 2013.

Buying your first home is a dream come true. But it can easily become a nightmare, if things go wrong. The

most common mistake you can make is not having help at hand, like a lawyer who will help you through the

process. Yes, it comes at a cost but when lakhs or even crores are at stake, saving a few thousands is not

the smartest thing to do. There are many other common mistakes.

Shopping for more than you can afford: Often, buyers reach a budget even before they know how much

loan they can garner. Even a pre-approved loan does not help in these circumstances because the bank will

go through all documents, check your other loans and Cibil (Credit Information Bureau India Ltd) records

before arriving at a final amount they are willing to lend. For instance, banks don’t lend if the borrower’s

EMI (equated monthly installment) crosses 40-50 per cent of his net take-home salary.

Going by the quoted price: Another blunder a property buyer makes is overlooking the actual price of the

flat he will have to shell out from his own pocket. Banks give a home loan only for the actual cost of the flat,

not the overhead expenses homebuyers have to bear. Those, include the cost of stamp duty, registration

and car parking, which could run in lakhs, depending on the cost and location. In addition, don’t fall prey to

the advertisements flashed by builders. Sample this: “Pay just Rs 50 lakh for 1BHK.” In this case, make sure

it has no hidden costs like the ones mentioned above.

TO-DO LIST

Hiring a property lawyer can help you understand the fine print of your sale agreement

Insist on having a copy of the draft-agreement before signing it

Make sure the allotment letter is issued to you, after the deposit is paid to the builder


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As a home buyer, you can ask the developers for the permits and clearances received for their

project

Not taking legal help: Most importantly, home buyers don’t take legal help, which is needed to interpret

certain property documents. Lawyers are in a better position to read through the fineprint of house

agreement. Within the agreement, a lawyer can better interpret the title certificates attached and if the

plan has been passed legally. Also, it’s important that the agreement is not one-sided and works to benefit

both the builder and the buyer. “Homebuyers don’t spend enough money and time to verify documents

while taking this decision. Hence, it’s important you hire a lawyer who will help you read the fine prints of

such documents,” says Sanjay Dutt, executive managing director, South Asia, Cushman &

Competition Commission of India modifies DLF-buyer agreements

ET, January 4, 2013.

NEW DELHI: The corporate fair play watchdog, Competition Commission of India, has modified clauses in

agreements between real estate firm DLFBSE -0.36 % and apartment buyers in two of the company's

projects in Gurgaon, in a move that could alter buyer-seller agreements across the Indian real estate

industry.

The commission on Thursday said it modified the agreement after a direction from the Competition

Appellate Tribunal (Compat) in March last year to pass an order specifying the extent and manner in which

the terms and conditions of the apartment buyer's agreement needed to be modified.

DLF had earlier filed a complaint against a Competition Commission of India (CCI) order imposing Rs 630

crore penalty on the company for abuse of its dominant position in Gurgaon market. The order came after

complaints filed by flat buyers' association of two DLF projects-DLF Park Palace and The Belaire.

In its latest order, CCI said it has also considered the relevant provisions of the laws applicable to the

development of group housing projects in Haryana, particularly the mandatory requirements that must be

followed by every developer/builder, but were not followed by DLF in this instance.

The commission said that after considering the modified terms of the apartment buyers agreement

submitted by both parties, it has modified the terms of the agreement in a manner, that it considers fair

and reasonable and takes into account the interest of both parties.

"Accordingly, the apartment buyers agreement has been amended such that the abusive and unfair

conditions present in the original one-sided agreement have been removed," it said.

CCI has barred DLF from selling parking slots and said that the allottees of Belaire Complex jointly would

have undivided ownership rights over land area in ratio of FAR inclusive of the footprint of the building and

not alone on the footprint of the building as is asserted by DLF in the agreement and asked DLF to refund

preferential location charges with interest if the allottee does not get apartment with preferential location.


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It has also said that if the company substantially changes the layout plan, resulting in more than 2%

increase or decrease in super area, the allottees' consent should be obtained for such changes in the lay-

out plans.

DLF declined to comment on the order.

Harsh Sehgal, president of the Park Place Residents' Welfare Association, said at first look the modified

agreement seems to be a fair agreement that will be beneficial to both parties as well as in the larger

interest of consumers of real estate.

Legal experts, however, say that Compat will also need to give its opinion on other issues that were

contested by DLF like relevant market, dominance, abuse of its dominance and also jurisdiction before

going ahead with modifying the agreements with buyers.

Metros News

Planning to buying a house in Mumbai? Now is the right time

NDTV, January 27, 2013.

It looks like the Finance Minister's appeal to bring down home prices hasn't completely fallen to deaf ears.

Mumbai, where property prices have galloped over the last three years, is the first to act in accordance.

Some big developers in the financial capital of the country are slashing per square foot project rates by as

much as Rs. 5,000.

RNA Corp was selling two-three bedroom flats at its Exotica project in Goregaon at Rs. 11,750 per square

feet, but now the prices have been slashed to Rs. 9,950 per square feet.

Similarly, prices at Naman Midtown, Elphinstone, today range between Rs. 20,750 and Rs. 22,500 per

square feet, which used to be sold for between Rs. 22,750 and Rs. 27,000.

"In a few projects the rates have been slashed by 2-5 per cent," said Sunil Mantri, chairman, Sunil Mantri

Developers.

Meanwhile, some other realty players have introduced flexible pricing with a single project and are also

offering irresistible rates to pocket some bucks at pre-launch.

Lodha Group is offering discounts of up to Rs. 5,000 per square feet to those who book their apartments

between January 18 and 28 at their high-profile Worli project - Codename Blue Moon.

At a time when properties in Worli are being pegged at Rs. 29,000 per square feet, Lodha is offering two,

three and four bedroom apartments in two towers at Rs. 23,991 per square feet with its new IPO-like pre-

launch scheme.


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"South Mumbai today is selling on large floor plates and that's driving up the property rates in excess of Rs.

8-9 crore; and that's caused most buying population to stop looking at South Mumbai. We wanted to get

that corporate audience and the buying audience back here. So, we are selling at Rs. 23,000 at pre-launch,

which comes up to Rs. 3-3.5 crore," R Karthik, chief marketing officer, Lodha Group, explains.

It's clear that expensive homes are not selling anymore even in a city known for its high-net individuals.

Several developers are now willing to negotiate with buyers discreetly as they are faced with a liquidity

crunch and rising cost of capital.

Stocks of Mumbai-based realty companies, too, underperformed the National Stock Exchange's Nifty index

in January so far on concerns over liquidity crunch. Several of them have been forced to sell stocks to

bridge the funding gap, with Housing Development and Infrastructure (HDIL) being the recent example that

sold shares to fund land acquisition.

"January to March is a good time for investors and actual users, as these developers are going to be

starved for funds; they have to pay back the leverage they have taken, service the loans, pay back interest

to the banks. This is an opportune time one can sniff around to buy a house," says Ravi Ahuja, executive

director of Cushman & Wakefield India.

With developers looking to cash in on their products, this might be the time for buyers to make the most of

it. However, it remains to be seen if this is the beginning of the much awaited price correction or just a

temporary blip.

Delhi govt approves development of 91 unauthorised colonies


NEW DELHI: With an eye on assembly polls later this year, the Delhi Government has decided to carry out

development works in 91 unauthorised colonies which encroached land belonging to ASI and Forest

department.

Urban Development Minister Arvinder Singh Lovely today said the government has given go ahead to

concerned agencies for carrying the development works in unauthorised colonies which were issued

provisional regularisation certificates in 2008.

The 91 colonies are part of 205 unauthorised colonies which were given in principle approval by the Delhi

Cabinet for regularisation.

Lovely said the Urban Development department has issued list of 91 unauthorised colonies where

developmental works will be carried out as soon as possible. The decision to allow developmental works in

the colonies was taken in view of clearance given by various concerned agencies and departments.


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Pune's Ambegaon on the rise

BS, January 14, 2013.

Ambegaon is going to be one of Pune's most vibrant real estate boom areas over the next 10 years. Today,

more and more buyers are looking for locations that still offer the uncluttered beauty and bracing

environment that once defined most of Pune. For such people, Ambegaon is among the most obvious

solutions. It offers hilly surroundings and generous greenery, and the availability of land still permits

construction of large township projects.

Amit Enterprises Housing Ltd is a major residential developer in Ambegaon. The company has achieved

considerable success with its luxury project Bloomfield and Astonia Royale in the affordable category.

Pune’s real estate market responds well to diversified luxury projects that offer buyers multiple options of

bungalows, villas and flats. Ambegaon has proved to be a perfect setting for such projects, because the

location’s natural ambience and freedom from congestion provide a feeling of exclusiveness. Other

companies such as Reelicon, Sai Shree Developers and some local developers, too, are active with smaller

projects.

Ambegaon does not have a very long history in terms of real estate development. Therefore, historic prices

as compared to today’s rates would show too large a disparity to provide sufficient perspective.

Development at Ambegaon has been taking place on land parcels, which have been held by land owners for

a number of years before they were put on the market for development. In terms of real estate potential,

Ambegaon stands at par with areas such as Bavdhan, Bhugaon, Wagholi, Kondhwa, Undri and Katraj — all

of which are fast upcoming residential property development precincts. Thanks to its proximity to Katraj,

Ambegaon has great hill views and retains a lot of Pune’s previous natural splendour. This makes it a good

location for buyers who are looking for a break from the chaos of the central city areas.

Also, it is well connected to the inner city by road. It has the advantage of proximity to the Mumbai-

Bangalore Bypass and the presence of NBN Sinhgad Technical Institute, schools, and hospitals.

Appreciation at Ambegaon has been rather significant at 20-25 per cent over the past two years. With the

rapid development of Sinhagad Road, Ambegaon is going to witness a lot of growth potential in the next

few years. We expect healthy mid-to-long term appreciation in this area. The current residential rates at

Ambegaon range from Rs 4,500 to 5,000 a sq ft.

In other growth areas of Pune such as Baner, Wakad and Hinjewadi, most of the investor interest comes

from Mumbai. However, because of its unique location, Ambegaon also draws a lot of investors from cities

such as Satara, Sangli, Kolhapur and Shirval.


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Projects News

Eight city clusters to be developed at Rs 2,100 cr

FE, January 31, 2013.

Karnataka government today decided to develop eight city clusters in Bangalore Metropolitan Region

Development Authority (BMRDL) areas at an estimated cost of Rs 2,100 crore.

Government will avail Rs 1,400 crore loan from Asian Development Bank and contribute Rs 700 crore to

develop the city clusters, Minister for Urban Development, S Suresh Kumar told reporters after the cabinet

meeting here.

The Karnataka Industrial Development Corporation had submitted a plan to the government suggesting

development of city clusters in areas falling under BMRDL as its study indicated that the population there

would inflate to 1.80 crore by 2030, he said.

Kumar said the city clusters will come up between Ramanagar and Channapatna, Nelamangala-Dabaspet,

Anekal-Jigani, Devanahalli-Vijaypura and Hoskote-K R Puram. City clusters will also be developed at Magadi,

Kanakapura and Doddaballapur, he added.

The cabinet also decided to expand four-lane to six-lane Bus Rapid Transit System (BRTS) corridor project

on Hubli-Dharwad road, Kumar said.

"The Rs 82 crore project will be allocated to GVR Infrastructure Projects Limited and will have to complete

it by 2015," he said.

Finance ministry weighs aid to incomplete housing projects


NEW DELHI: The finance ministry has asked state-run banks to compile a list of all semi-constructed

residential projects in metros that can be made viable by extending loans, a bid to spur construction and

availability of affordable houses.

"We have asked banks to submit the details and their remarks on such projects. This will be reviewed in the

meetings of state-level bankers committee for further lending, among other financing options," said a

finance ministry official, who did not wish to be named.

The ministry has directed the banks to send the list to the National Housing Board along with their funding

plan.

"Based on a project's viability, banks can also look at replacing the lenders from the informal sector that

charge much higher rates, to help lower the cost of housing," the official added.


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Targeted lending to stressed but viable projects will bring down the cost of housing projects and also

provide a boost to the economy, the government officials believe.

Finance Minister P Chidambaram, in his meeting with heads of banks last year, had pointed out that nearly

500,000 flats were lying vacant in Mumbai despite demand for housing.

As per the finance ministry data, there was a negative growth of 3.43% in housing loans between April and

September 2012, compared with the year-ago period, even as the non-performing loans in the segment

reduced from 2.63% to 1.54%.

NHB has also sent a letter to all banks to take suitable steps for reviving such projects, which may be stalled

for reasons beyond the control of developers.

"There is an urgent need to ensure resumption of construction activities in respect of the incomplete

residential projects with a view to generate positive sentiments and renewed confidence in the market

among all stakeholders," NHB chairman RV Verma said in his letter to all bank chiefs.

The letter also said that kick-starting the unfinished projects will unlock the already invested capital and will

prevent further time and cost overruns.

"The progress on such projects will be reviewed at state level bankers committee and issues, if any, will be

worked out," said an official with NHB, requesting anonymity.

Under the new arrangements, banks have been asked to assess the viability of projects in terms of demand,

location and price. Support may also be provided to small developers with stand-alone projects on a

priority basis. The new model to be followed for financing by banks will be project-oriented and ring-fenced

through escrow mechanism. "This essentially means that a part of the payment from individual borrowers

will be credited towards builder's loan payments to banks," the official said.

NHB is of the view that under this mechanism the project loan will get converted into a long-term individual

loan in the book of the lenders ensuring that project is completed on time.

"This will bring down the real estate prices and also help home loans take off, unlike in the 'wait and watch'

situation that resulted in stalled projects and high prices," the official quoted earlier said.

Government News

Delhi Development Authority to triple floor area ratio, city to go vertical


NEW DELHI: Delhi's planning body may allow houses that are built for the poor and middle-class to go

vertical by tripling the floor area ratio (FAR) from 200 to 600, as the city copes with growing housing

shortage, government officials said.


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The officials, who asked not to be named, said the union urban development ministry, which administers

Delhi's civic and urban planning bodies, has asked the Delhi Development Authority (DDA) to increase the

FAR, and include the revised figure in the Delhi Master Plan 2021, an updated version of which is likely to

be released by May this year.

FAR is the ratio of the total floor area of a building to the plot area. The concept underlying FAR is

utilisation of land in the most optimal manner. If the current limit is relaxed, DDA can potentially build high-

rise apartments which could reach up to twenty floors in certain locations, as compared to four-to-six floors

now.

If FAR is raised, it will be the first step towards Delhi having a taller skyline, similar to its global

counterparts, and akin to Mumbai where buildings are getting taller. It could also lead to an increase in the

number of new apartments and a drop in home prices.

The increase in FAR will first be effected in case of housing for the economically weaker sections and low

income groups, which face a huge shortage of homes in Delhi. It will then be extended to housing for more

affluent sections, built by both the public sector as well as private builders. The city currently has a shortage

of 0.49 million homes, which could reach 2.4 million by the end of this decade. Of this, close to 90% of the

shortage is in the economically weaker section (EWS) and lower income group (LIG) categories.

The minister for urban development Kamal Nath has been a vocal proponent of vertical growth of the city

and with the process of review nearing its end, this could become a reality soon.

Nath's drive for vertical growth, though, has come under criticism from town planners, architects, and

bodies like the Delhi Urban Arts Commission (DUAC), on the ground that the strain on infrastructure such

as roads, water, power and sewerage will go up manifold.

The master plan, once the review is complete, is expected to endorse higher FAR for larger plots in the city

as well as for group housing projects of builders.

With Delhi expanding over the years and the population reaching 17 million, property prices have shot up

because of which middle class home buyers have been forced to look for homes in new urban areas around

the city such as Noida, Gurgaon, Ghaziabad, Faridabad and beyond. The average property prices in Delhi

are at least two to three times that in Gurgaon and Noida.

By going vertical, prices of apartments can come down. "With high cost of land, if you have low FAR, the

price of a flat will be very high," he had told ET.

Property prices in many parts of Delhi, especially in the south and central parts of the city, today are

comparable to those in cities like New York and London.


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Govt plans to set up Land Authority of India to monetise unutilised land


NEW DELHI: The government is pushing a plan to set up a Land Authority of India that will take over all

under-utilised and unused government land and monetise them, leading to a windfall of an estimated Rs 1

lakh crore that can give succour to the country's burgeoning fiscal deficit.

The ambitious proposal for a national body, which has to pass muster with a lot of government bodies that

have occupied prime land but have put them to little use was put forth by the Union urban development

minister Kamal Nath last month, and has been discussed among other key ministries that include the

finance ministry as well as the prime minister's office.

"Surplus land across the country with bodies such CPWD, DDA, Railways, Defence, public sector

undertakings and other government agencies can be put in the sale basket," Nath told ET. "All the land will

vest, by a notification, in the Land Authority of India. Let them sell it," Nath said.

"This can help us raise over Rs 1 lakh crore in six months and help us rein in the fiscal deficit," he said. The

policy, the minister said, "should be to either utilise the land or sell it". A scarcity of land has led to the price

of land shooting up across the country.

HUDCO aims to finance 5 lakh housing units construction in FY13


MUMBAI: Housing and Urban Development Corporation is aiming to finance construction of at least 5 lakh

affordable housing units in the current financial year and is targeting to increase this number by 10%

annually for the next five years, said a top official at the corporation.

"We have already financed 3.8 lakh housing units this year and we hope to cross 5 lakh units as against

financing 4.3 lakh units in 2011-12. More than 90% of these have been in affordable housing segment for

economically weaker section," said VP Baligar, chairman and managing director of HUDCO.

HUDCO will focus more on development of these housing units in rural areas with nearly 60% expected to

be in these regions.

In the current financial year, HUDCO is targeting to disburse loans worth Rs 2,000 crore for facilitating

construction of houses for economically weaker sections through state government grants. The techno-

financial institution engaged in financing and promotion of housing and urban infrastructure projects across

the country is aiming to increase its total disbursement by 10% every year.

HUDCO is considering proposals received from Karnataka, West Bengal and Rajasthan state governments

under affordable housing in partnership program that involves private developers tying up with state

governments for development of such affordable units.


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"We would like to encourage state governments to undertake of more of such projects than doing it

ourselves," Baligar said. He also added that even currently out of total loans around 15% are disbursed to

private sector.

Baligar was speaking on the sidelines of a conference for its proposed fund raising program. The

corporation has launched its offer to raise Rs 750 crore though tax-free bonds, with an option to retain

oversubscription up to Rs 5,000 crore. The issue will open on January 9 and close on January 22.


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Real Estate Weekly

Every week, Indian and international business papers and specialist magazines are scanned to bring essentials of reading for professionals in the Real Estate industry. This newsletter is compiled, summarized, edited and presented by students of Kohinoor Business School.

Any feedback or suggestion with regard to this Newsletter will be highly appreciated. The copy is circulated free of cost. If you wish to be on the mailing list, write to [email protected]

Kohinoor Business School, Khandala Center of Excellence Faculty Coordinator:- Prof. Madan B. Survase Email id- [email protected] Committee Members:- Saurabh Meshram, Neha Ramteke, Monica Singh and Amruta Dhumal

mailto:[email protected]

Date post:	11-Apr-2018
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