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Housing Market Booms As Credit Soars

The Indian housing sector is experiencing a significant upswing, with credit outstanding reaching an all-time high of Rs 27.23 lakh crore in March 2024. This surge, according to the Reserve Bank of India's https://www.rbi.org.in/ (RBI) data on 'Sectoral Deployment of Bank Credit https://rbi.org.in/Scripts/Data_Sectoral_Deployment.aspx,' represents a nearly Rs 10 lakh crore increase over the past two fiscal years. 

Pent-up Demand Drives Growth

Experts from both the banking and real estate sectors attribute this growth to a robust revival in the residential property market post-COVID-19 pandemic. Suppressed demand from the past two years is finally being realised, leading to a surge in home-buying activity. 

Data Unveils Housing Loan Growth

The RBI data reveals a substantial rise in housing credit outstanding, encompassing both priority sector housing and regular housing loans. In March 2024, the credit outstanding stood at Rs 27.22 lakh crore, a significant increase from Rs 19.88 lakh crore in March 2023 and Rs 17.26 lakh crore in March 2022.

Commercial Real Estate Sees Uptick

The data also indicates a rise in credit extended towards commercial real estate. In March 2024, the credit outstanding for this sector reached Rs 4.48 lakh crore, compared to Rs 2.97 lakh crore in March 2022.

Increased Property Launches and Sales Fuel Loan Growth

Samir Jasuja, CEO and MD of a leading real estate data and analytics firm, offers another perspective. He emphasises the significant increase in property launches and sales over the past two fiscal years as a primary reason for the rise in housing loans. Major Tier-1 cities have witnessed substantial price appreciation, ranging from 50 per cent to 100 per cent since FY 2021, contributing to a larger average loan size per property. Jasuja expects the housing loan segment to maintain its upward trend as the demand for residential real estate remains strong.

Long-Term Optimism for Housing Market

The Indian real estate sector, which supports over 200 ancillary industries like cement and steel, has witnessed a resurgence in demand since 2022. This follows a period of over a decade characterised by subdued sales and stable prices. While disruptions caused by RERA (Real Estate Regulation and Development Act), GST https://www.gst.gov.in/ (Goods and Services Tax), and demonetisation impacted the sector, the renewed emphasis on homeownership post-pandemic has fueled a comeback. Industry experts even anticipate the sector to reach a landmark USD one trillion milestone by 2030.

Realtors Seek Increase in Tax Benefits

Real estate industry bodies like CREDAI and NAREDCO are lobbying the government to further boost housing demand by increasing tax sops on home loans. They propose raising the deduction allowed on home loan interest payments from the current Rs two lakh to Rs five lakh.

Long-Term Outlook Remains Positive

The long-term outlook for the housing market appears bright, with industry experts expecting the credit growth trend to continue alongside strong demand for residential real estate. Realtors believe the sector is likely in the second or third year of a long-term upcycle. 

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New Pamban Bridge construction in full swing 

Exciting developments are underway in Rameswaram as the construction of the new Pamban Bridge is in full swing. This monumental project, undertaken by the Southern Railway https://sr.indianrailways.gov.in/, promises to revolutionize transportation infrastructure in the region and beyond.Spanning an impressive 2,070 meters (6,790 ft), the new Pamban Bridge will stand as India’s first vertical lift sea bridge, representing a significant milestone in engineering and innovation. With an estimated cost of Rs 550 crores, this state-of-the-art structure is poised to redefine connectivity and accessibility along the southern coast of India. The bridge will feature 100 spans across the sea, with 99 spans measuring 18.3 meters and one span extending to 72.5 meters. This innovative feature ensures seamless passage for larger ships beneath the bridge, facilitating smoother navigation and enhancing maritime traffic efficiency.

Beyond its functional advantages, the new Pamban Bridge represents a triumph of modern engineering, integrating cutting-edge techniques and materials to enhance durability and longevity. The meticulous planning and execution of the project are evident in the procurement and assembly of all electromechanical equipment, paving the way for successful trial runs and eventual operational readiness.

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Builders in Germany to strike in latest blow to troubled construction sector

Among other things, the deal proposed a raise of 250 euros per month from May 1,2024, with a further increase on April1,2025, of 4.51% in eastern Germany. 

The German Construction sector faces its first nationwide strike since 2002 after employes rejected a deal on Friday that independent negotations had hoped would slove their dispute overthe wages of some 930,000 workers. 

Now we strike, massively," Robert Feiger, head of the IG BAU union, said in a statement. 

Shortly before, employers had said they could not accept the arbitrated deal, which had been accepted by the union in the late April. Among other things, the deal proposed a raise of 250 euros per month from May 1,2024, with a further increased  on April 1,2025. 

Germany's construction sector is already struggling with a rapid rise in interest rates and costs, putting an end to a years-long surge fuelled by low rates and strong demand. 

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Bengaluru’s Mantri group tells SC it has given possession in its delayed project, but flats don’t have an OC.

Supreme Court https://www.sci.gov.in/  hearing, Bengaluru-based developer Mantri Castles Private Ltd told the apex court that it had offered possession to buyers of flats in its delayed Mantri Serenity project. On April 30, the Supreme Court (SC) took cognisance of the issue based on submissions made by Senior Counsel Bishwajit Bhattacharyya, who is representing the homebuyers. 

About 48 homebuyers from the delayed project had approached the SC after the developer failed to offer possession between 2015 and 2019.

The company told the court on April 2, 2024, that letters of possession had been issued to all buyers, yet several had not taken possession of their flats.

Buyers had initially moved the National Consumer Disputes Redressal Commission (NCDRC) https://ncdrc.nic.in/ when the developer did not deliver their homes within the promised timeframe. Based on the NCDRC's advice, 48 buyers who had booked flats between 2013 and 2016 for Rs 75-95 lakh, approached the Supreme Court.

"Homebuyers have still not been given possession despite having paid about 100 percent of the amount. The court directs that the concerned flats/property/premises be handed over to the appellants within one week," the order dated November 7 said.

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Greater Chennai Corporation identifies 25 hospota where construction debris gets dumped regularly

Those responsible, including private parties and government contractors responsible for laying roads and constructing storm-water drains, have been heavily fined, says GCC Commissioner J. Radhakrishnan. Construction debris continues to be dumped in many public places across the city, with the Greater Chennai Corporation (GCC)  identifying 25 hotspots. 

GCC Commissioner J. Radhakrishnan said repeated dumping of debris was taking place mainly in parks and their vicinities and near Metro Rail stations. “Debris continues to be dumped in the pathways behind Arupadai Veedu Murugan temple in Besant Nagar Valmiki Nagar in Thiruvanmiyur.

Construction debris continues to be dumped in many public places across the city, with the Greater Chennai Corporation (GCC) https://chennaicorporation.gov.in/gcc/ identifying 25 hotspots.

GCC Commissioner J. Radhakrishnan said repeated dumping of debris was taking place mainly in parks and their vicinities and near Metro Rail stations. “Debris continues to be dumped in the pathways behind Arupadai Veedu Murugan temple in Besant Nagar. This has been going on since 2018. Initially, they were dumping small amounts, but now, they dump large amounts of debris,” said G. Surendran, a resident of the area.

The debris was temporarily cleared for laying a road, which itself is a violation, he says. “If the road is laid, heavy vehicle movement will begin and debris may be dumped in several places inside the area,” he said.

Valmiki Nagar in Thiruvanmiyur is another hotspot.

The rise in real estate development has also been cited as an issue by many. According to the Confederation of Real Estate Developers’ Associations of India (CREDAI), Chennai Chapter, the real estate market has seen a boom after seven years across the State, including Chennai.

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Housing Loan: How to Choose the right home loan lender. 

Selecting the appropriate home loan lender is a vital step in the home-buying process. It can  influence not just the interest rate you receive, but also the overall cost, simplicity, and transparency of the transaction. However, it’s important not to rush into making this decision. Instead, take the time to secure quotes from a few lenders to compare interest rates, fees, and terms.

The factors to consider when deciding on the right lender for your needs.

1.Verify the lenders credibility: 

lender’s credibility, reputation, and history is essential before relying on them to finance your home.

2. Examine interest rate: 

Interest rates and loan terms are key aspects to consider when selecting a home loan lender, as they play a significant role in determining the affordability of your home purchase.

3. Check the loan Terms: 

The loan conditions and repayment alternatives offered by various lenders. Seek out flexibility in terms of the duration of the loan, enabling you to select a repayment period that aligns with your financial abilities

4. Pay attenction to the paperwork: 

Being aware of the necessary documents in advance enables you to gather everything efficiently. Familiarizing yourself with the lender’s approval process helps set realistic expectations. You will gain insight into the qualifications they look for, credit score prerequisites, and the expected timeframe for approval.

5. Factors in the expanses: 

Each lender may have different fee structures, such as origination fees, appraisal fees, and closing costs, so it is important to compare these costs among potential lenders. By doing so, you can fully comprehend the financial impact of the loan.

6. Transparenc Matters: 

When selecting a lender for a home loan, it is important to be mindful of any unforeseen expenses that certain lenders may impose following approval. The lender should openly provide all loan terms, flexibility options, available loan products, and necessary documents. This allows you to compare offers accurately and select the loan that best aligns with your needs.

Selecting the appropriate lender for your home loan is critical and can have enduring effects on your financial well-being. By adhering to these guidelines, you can identify a trustworthy lender to assist you in achieving your homeownership aspirations.

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