Housing.com & CREDAI sign MoU – Property For Sale Magazine

imageHousing.com and The Confederation of Real Estate Developers’ Associations of India (CREDAI), today signed a Memorandum of Understanding (MOU) for an exclusive partnership for three years. The objective of the MOU will be to improve the overall ecosystem and create a new age platform that will enable the developers to engage with the consumers in a focused manner.

“The partnership is a testimony of changing times in the manner developers have been traditionally operating in the real estate space,” said Jason Kothari, Chief Business Officer, Housing.com on the occasion. “CREDAI’s members are the most respected developers in India, while Housing.com has an innovative, technologically advanced and trusted online real estate platform. This association is first of its kind in the industry, and I am excited that it will redefine the way developers have been approaching the buyers across India. We are confident that the alliance will prove to be a mutually beneficial relationship and will make the community more transparent and consumer centric.”

Mr. Getamber Anand, President, CREDAI
Mr. Getamber Anand, President, CREDAI

Mr. Getamber Anand, President, CREDAI National said, “We are enthusiastic to synergize with an organization like Housing.com. CREDAI has, to its advantage credibility for its members and if housing.com also brings in additional credibility to the real estate space by way of professional brokering and large footprint, it will mutually benefit both organizations. We are certain that this relationship will go on in a long fruitful way.”

Housing.com is the leading online real estate company in India playing across the ecosystem driving innovative technological solutions and transparency. As part of the alliance, Housing.com will actively participate and be represented at all events and forums of CREDAI nationally, as well as engage with CREDAI’s network of developers including alignment with regional chapters. CREDAI, through this partnership, will be able to leverage Housing.com’s technology superiority and innovation to create online proliferation for its communities.

About CREDAI:
Established in 1999, The Confederation of Real Estate Developers’ Association of India better known as CREDAI is the apex body for private real estate developers in India, representing over 11,500 developers through 24 states and 154 city chapters across the country. CREDAI has organized the industry and is accepted as trusted partner with Government representatives, policy makers, investors, finance companies and consumers.

About Housing.com:

Founded in 2012, Housing.com is India’s leading online real estate platform with 8 million monthly hits, 1 million verified homes listed to date, and an unparalleled online user experience. The Company is a technologically innovative real estate platform with a larger vision to bring more transparency, efficiency and trust across the real estate ecosystem in India.

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©Property For Sale Magazine / 2015 / Volume 6 Issue 4 / Monthly /News*

*Published / To Be Published Material

Reducing EMIs | RBI Cuts Repo Rate by 50 Basis Points – Property For Sale Magazine

Reserve Bank Governor Raghuram Rajan
Reserve Bank Governor Raghuram Rajan

RBI today cut the benchmark repo rate by 50 basis points to a 4-1/2-year low of 6.75 per cent in a surprise move

“As opposed to the market’s expectation of a 25 basis points cut, the RBI has delivered an astounding 50 basis points reduction. With this, it has clearly abandoned its cautious baby-steps approach and assumed a bolder stance, obviously because the current economic fundamentals provide it with the room to do so. Given the magnitude of this step, I do not think any further rate cuts are likely in this financial year, especially since the RBI foresees a moderate growth in inflation rate in the interim months. For the affordable housing sector, the outlook is nevertheless bright, since the RBI governor has made provisions for lending to this sector to become less stringent and broader in scope.” Says
Anuj Puri, Chairman & Country Head, JLL India

The repo rate cut decision came in for praise by policymakers, including Finance Minister Arun Jaitley, who said that that transmission of RBI rate cuts by banks will boost investments.

This rate cut is rooted in RBI’S confidence on inflation side, particularly imported inflation that’s falling due to collapse in global commodity prices. Even food inflation remains contained. RBI has lowered its January 2016 inflation projection to 5.8% from 6% and March 2017 target to 5%. Although revision is marginal, this underscores RBI’S confidence in inflation stability.

Growth forecast has been revised down to 7.4% from 7.6% for FY16. Reasons for growth slowdown are poor monsoons and slow pick up in investment cycle.

Falling inflation and slowing growth have made RBI front end it’s rate cuts to kick start domestic consumption and investment demand. RBI has reiterated it’s earlier stance of working with governemnt and banks to transmit these cuts to real economy through the bank transmission channels. We think RBI will unlikely cut rates soon. As these lower rates are tansmited by banks, th is may be a great time to refinance loans.

RBI has proposed to lower risk weights on individual housing loans in the affordable segment (currently minimum risk weights in housing loans is 50%) to boost low cost housing. This will help in meeting govt’s target ‘Housing for all’ by 2022. Along with rate cuts, this means housing loan market should see a pick up in volumes. Home loan and Car loan rates should fall by .50 basis points & Should to come at 9%.

Reserve Bank Governor Raghuram Rajan
Reserve Bank Governor Raghuram Rajan

Dr Rajan said the 50-basis-point repo rate cut should not be viewed as an aggressive move. Many conditions laid down by the RBI in the previous policy announcement in August have been met, paving way for a sharper rate cut, he added.

At the outset, this rate cut will lead to a long and sustained improvement of the market sentiments through higher consumer spending and easy availability of loans to both consumer as well corporate. This is great news for the real estate sector as the rate cut would also lead to a significant reduction in home loan rates thereby reducing EMIs of home buyers. Corporate would benefit as interest outgo on existing loans would reduce and also enable them to raise equity. The prospects of Government divestment would also gather pace. The green signal to raising of Rupee Debt overseas is a game-changer and can create an alternate source of funding for Indian companies.” says Puraskar Thadani, Editor; Property For Sale Magazine.

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©Property For Sale Magazine / 2015 / Vol. 6 Issue. 6 / Monthly

Commercial Real Estate Up, Residential Down – Property For Sale Magazine

BOULEVARD WALK by H&S

Average transacted office lease sizes across Mumbai, Bangalore, Chennai and Pune have increased from the uncertain times seen in 1Q14 – prior to the general elections. Market morale was low in 1Q14, which could explain the lower sizes. Following elections in May 2014, however, market sentiment improved gradually, while Mumbai, for example, witnessed 65% appreciation in average deal sizes between 2Q14 and August 2Q15.

The number of transactions has also increased considerably across all these cities. Pune leads with an impressive 89% y-o-y growth in transacted space per lease deal, followed by Bangalore at 78% and Chennai at 67%. Good days are returning for office real estate and tenants will remain in an expansionary mode. Occupiers are not only leasing larger office space, but they also expect all the space to be on the same floor. Developers are constructing bigger floor plates to meet the evolving demand.

BOULEVARD WALK by H&S

While average floor deal sizes are increasing in the office sector, the residential sector tells a different story. In the same set of cities, residential developers are under pressure owing to sluggish sales and cash flow issues. They hit upon a unique way to keep residential prices in a favourable price range over the past few years: building smaller apartments without lowering the per square foot prices across major cities.

In the past year, apart from marketing tactics such as flexible payment schemes and on-the-spot discounts, average apartment sizes have been falling across all major cities of India. Mumbai and the Mumbai Metropolitan Region witnessed the largest fall in average apartment sizes on an annualised basis at 5%, followed by Bangalore (4%), Chennai (4%) and Pune (1%).

Source : JLL REIS

The difference is more striking if the past few years are considered. For example, Mumbai’s fall in apartment sizes from 2010 to date has been 26.4%. There has been a corresponding reduction in the carpet area. For the same period, Bangalore registered a 23.7% reduction in average apartment sizes, followed by Chennai at 22.2% and Pune at 7%.

Average unit sizes in Mumbai and Pune have been among the lowest across all four cities in 2010 and today. The configuration – e.g. two-bedroom-hall-kitchen – remains the same, but developers have reduced the area to make it much more compact.

A possible reason behind this move by developers to reduce apartment sizes could be to better suit buyers’ spending power. Also, many urban buyers are willing to live in newer and smaller-sized homes near their offices. They prefer to compromise on their residential lifestyle by having a compact home equipped with all the basic amenities instead of spending time on long commutes.

BOULEVARD WALK by H&S

Developers can generally change apartment sizes prior to completing the foundation on the ground without hassles from the plan-sanctioning city agencies. A price correction, on the other hand, is very market-driven. This is a good move by developers, as they have been able to reduce prices and keep the configuration unchanged, despite rising construction costs, approval and finance costs eating into their profits, by reducing unit sizes.

Written By – Ashutosh Limaye, National Director – Research, JLL India

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©Property For Sale Magazine / 2015 / Vol. 6 Issue 3