Land Prices soar in Amaravati 

Lnad prices came down anywhere between 60% and 75% after outgoing chief minister  Y S Jagan Mohan Reddy announced his plans of three capitals in 2019. Real estate prices zoomed in Amaravati witnessing anywhere between 50% and 100% increase in just three days after the election results are out. The massive victory of the TDP, Jana Sena and BJP alliance has cleared the uncertainties over the capital, renewing the buyers' interest.
on June 12 near the All India Institute of Medical Sciences (AIIMS) in the capital region. Farmers are expecting a further increase of land prices in case of a positive statement by Modi. Land prices came down anywhere between 60% and 75% after outgoing chief minister Y S Jagan Mohan Reddy announced his plans of three capitals in 2019. All euphoria created around the proposed futuristic capital city vanished. After five years, with govt change, the realty sector in Amaravati is witnessing a 'V' shaped recovery in terms of prices. Several central government institutions like Reserve Bank of India, Comptroller and Auditor General (CAG), CPWD, Public Sector Undertakings like NTPC, ONGC, Indian Bank, State Bank of India.  and others have purchased lands to set up their regional offices in Amaravati Sources said that Naidu is looking to bring all these institutions to Amaravati as soon as possible so that the economic activity will start rolling. 

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Robust Housing demand helps in faster inventory liquidation

Real estate developers in India are leveraging the strong housing demand to clear their existing stocks, reducing the overhang of unsold properties that had been a concern in previous years. A healthier balance between demand and supply has also stabilised the market. Residential property markets in the top seven cities - Mumbai, Delhi-NCR, Pune, Bengaluru, Chennai, Hyderabad and Kolkata - have witnessed a significant 31% decrease in the time taken to sell active unsold housing inventory, showed a JLL analysis. In the March quarter, the time taken to liquidate inventory dropped to 22 months from 32 months at the end of 2019, driven primarily by an exponential surge in housing demand. This assessment is based on the average sales rate observed over the last eight quarters.  While the fall in the affordable housing segment was due to its reducing share in launches over the last four years, the premium segment saw this decline despite a substantial jump in the segment's share in annual launches to 22% in 2023 from 2% in 2019. According to him, time needed to sell the unsold inventory in the premium segment has dropped from 51 months in 2019 to 29 months in the first quarter of 2024, showcasing the strong sales momentum in this segment. Apartments belonging to sell its unsold inventory, with an average of 29 months as of March end. However, despite this longer selling period, the premium segment has experienced a significant reduction in inventory liquidation time due to its relatively faster sales velocity. This segment has emerged as the top performer, driven by strong buyer interest in larger homes with improved support amenities.

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Unsold Housing stock up 24% in top seven cities

Unsold housing stocks across seven major cities have risen by 24 per cent since 2019 due to higher supply, but realty firms will take 31 per cent less time to sell these units because of high sales velocity, according to JLL India. In a report released on Thursday, real estate consultant JLL India said the actively selling unsold housing inventory has reached about 4,68,000 units by March 2024, a 24 per cent increase since December 2019, across seven major cities -- Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata. Despite this surge in unsold inventory, the consultant noted that there has been a remarkable reduction in the estimated time required to sell these properties. This assessment is based on the average sales rate observed over the last 8 quarters. There has been a "significant 31 per cent decrease in the time it will take to sell the active unsold housing inventory. In Q1 (January-March) 2024, the time to liquidate inventory has dropped to just 22 months, compared to 32 months by the end of 2019, driven primarily by an exponential surge in housing demand. Mumbai includes Mumbai city, Mumbai suburbs, Thane city, and Navi Mumbai; Delhi-NCR includes Delhi, Gurugram, Noida, Greater Noida, Ghaziabad, Faridabad and Sohna.

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Luxury real estate demand may see moderation in near future 

The luxury real estate segment is likely to plateau in the near-future and affordable housing may take off as the new government takes charge, said Pankaj Kapoor, founder and managing director of real estate research firm Laisas Foras. Niranjan Hiranandani, the managing director and co-founder of Hiranandani Group, said the new government should take steps to ensure affordable housing is possible in cities such as Mumbai. “Today, almost 50 percent of the cost of the house is in government taxes, charges for development, floor space index and goods and services tax. As far as affordable housing is concerned in Mumbai and the suburbs, these taxes need to come down otherwise it is just not possible. Affordable housing doesn’t exist because the government charges are just too high,” Hiranandani told CNBC-TV18. On the real estate outlook of the financial capital of the country, Hiranandani said he is upbeat and believes change in political composition in both Maharashtra and the country, following the outcome of the Lok Sabha elections 2024, will not have any impact.  Apart from the state, the Central government also has prioritised infrastructure of Mumbai. He said, “… the central government’s commitment for the city includes bullet train, Delhi-Mumbai industrial corridor… if you look at Mumbai separately, in the next two years 330 km of metro will be coming up, we have a coastal road going to be delivered in the next three months and we have a cross harbour link, which is opening a new scope of development in the city.” The support will be there as far as affordable housing is concerned despite INDIA bloc getting a higher number in the state, he said.Moreover, Hiranandani believes that the new government, which will take charge after the upcoming Maharashtra elections, will prioritise slum redevelopment. With the kind of mandate the Prime Minister Narendra Modi-led government at the Centre received, Kapoor believes affordable segment is likely to get a boost. However, he also noted that investment in infrastructure is unlikely to slowdown despite the less-than-expected mandate for the saffron party.

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New Government must bring policy reforms in realty sector NAREDCO

The real estate sector is at a crucial point, with great growth potential but significant challenges. To reach a market size of USD 1 trillion by 2030 and become a net-zero carbon industry by 2047. Realtors body NAREDCO https://www.naredco.in/ on Tuesday demanded that the new government should bring policy reforms for growth in real estate sector and provide tax incentives to home buyers as well as developers to boost housing demand. The association also sought streamlining of getting approvals to develop projects. Lok Sabha elections 2024, NAREDCO National President G Hari Babu said, "The real estate sector is at a crucial point, with great growth potential but significant challenges. To reach a market size of USD 1 trillion by 2030 and become a net-zero carbon industry by 2047, we need government support." This can be achieved by setting the first Rs 20 lakh or Rs 25 lakh of a home loan at a 5 per cent interest rate for the first five years, the NAREDCO President said. Pradeep Aggarwal, Founder & Chairman, Signature Global (India), the infrastructure sector along with the real estate sector is key for achieving the goal of 'Vikshit Bharat'. We also expect the new government to address some of the challenges faced by these sectors and take the lead in convincing the GST Council https://gstcouncil.gov.in/ to ease the burden of Goods and Services Tax (GST) on both developers and consumers said. 
 

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Home Loan borrowers may have repaid higher amounts 

Mortgage disbursals are far exceeding the amount of outstanding home loans indicating faster industry-level growth and a pronounced revival in incomes that has prompted end-users to prepay liabilities or reduce debt through lump-sum part payments ahead of schedule. An analysis of data showed that higher repayments and prepayments optically limit the pace of mortgage expansions. In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan market in the country was, Rs 3.62 lakh crore. But disbursements were much higher - at Rs 8.08 lakh crore. In FY24, State Bank of India, which has 25 percent of market share, said its outstanding portfolio rose 13 percent disbursements rose 17 percent and sanctions rose 21 percent. For Bank of India, the outstanding home loans rose Rs 8,000 crore in FY24, while disbursal rose Rs 23,000 crore. With the revival of the economy and improvement in the income levels, sizable borrowers of home loans are using their surplus funds to repay and prepay their loans so that the interest burden is also less, said a senior analyst with a rating agency.  In FY23, for instance, the combined outstanding home loan portfolio of public sector and private banks and housing finance companies, which account for a big majority of the home loan amrket in the country was, Rs 3.62 lakh crore .
 

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JM Financial to fund realty projects through AIF 

JM Financial Group has decide to fund real estate projects through the alternative investment fund (AIF) route and syndications, moving away from its on-balance business model. JM Financial non-executive vice chairman Vishal Kampani said in an investors call that the group wil set up a strategic AIF for land and approval financing, using its clients realtionship to provide funding through it. The group will transition towards an investment banking-led distribution and syndication business, he said, adding that real estate developers are also finding it easier to obtain early-stage financing from AIFs rather than non-banking financial companies (NBFCs).
The group is looking to realign its wholesale credit businesses, which include real estate, bespoke, distressed credit and financial institutions financing. The wholesale lending book fell to Rs 4,917 crore at the end of March 31, down 42% from ?8,445 crore a year ago. The company said several factors led to this decision. Competitive pressures from banks have pushed down yields in key client segments, and regulatory ambiguities around land financing have created additional challenges. The recent draft regulations could see provisioning requirements for real estate and infrastructure finance go up to 5% from 0.4%, affecting the return on assets for new and existing loans. 
 

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Lenskarts Dhanuka family buy luxury apartments in DLF in Gurugram 

Conveyance deeds of four separate properties that are cumulatively worth Rs 106.4 crore have been registered separately in DLF’s super-luxury project ‘The Camellias’ in Gurugram. The buyers of these luxury apartments are Lenskart’s founder Peyush Bansal. The documents showed that these apartments ranging between 7,361 sqft and 9,419 sqft that were booked and purchased between 2015 and 2022, but the conveyance deeds for these properties were executed in April 2024. Properties were purchased by Bansal and the Dhanuka family seperately. According to documents, Bansal purchased a 7,461-sq. ft luxury apartment in The Camellias in August 2022. The flat with four car parking slots was bought for Rs 27.02 crore. The conveyance deed of the property was executed on April 29, 2024. Bansal paid a stamp duty of Rs 1.89 crore for the transaction. Group Chairman of Dhanuka Agritech Limited Ram Gopal Agarwal and his wife Urmila Dhanuka entered into an agreement with DLF on June 24, 2019, to purchase a 7361 sq. ft apartment at The Camellias. He bought the property for Rs 22.55 crore and the final payment was made in March 2021. The conveyance deed for the property was executed on April 26, 2024, where stamp duty of Rs 1.35 crore was paid. 

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India Home prices to rise steadily, affordable housing supply to lag demand

Average home prices in India are expected to rise steadily over the next few years as the country's rich drive up demand for luxury housing, according to property experts polled by Reuters who also said there would be a shortage of affordable homes.  Home purchases are increasingly driven by a select few in a country of more than 1.4 billion people, mostly those unaffected by higher interest rates. Economic growth in Asia's third-largest economy is expected to continue outpacing its major peers, driving demand for housing, even though economists argue the benefits of that growth are being skewed more towards the upper classes. Average home prices are forecast to rise around 6% this year and next, slightly below the 7% expected in a March poll, according to the median forecast from a May 10-29 survey of 15 property market experts. House prices rose 4.3% in 2023, according to Reuters calculations based on the Reserve Bank of India's House Price Index. The RBI https://www.india.gov.in/official-website-reserve-bank-india, which raised interest rates by 250 basis points between May 2022 and February 2023 to cool inflation, is broadly expected to cut them next quarter, although a stable rupee and a strong economy leaves the central bank with little incentive to act.  Despite government initiatives to build affordable homes, a strong majority of respondents, 12 of 15, said demand would not be met over the next two to three years. The other three forecast excess supply.

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BSNL and MTNL prioritise governmnent Organsiations fpr Land worth rs 1 lakh crore 

State-run telcos Bharat Sanchar Nigam Ltd (BSNL) https://www.bsnl.co.in/ and Mahanagar Telephone Nigam Ltd (MTNL) https://mtnlmumbai.in/index.php/enterprise/data-solutions/msits-data-center-chennai have decided to give preferences to government organisations, both in states and at the Centre, in selling their land assests worth over Rs 1 lakh crore. The sale to government organisations is clean and smooth and does not have unncessary litigation. BSNL has raised Rs 1600 crore through sale of properties to government department as well as private entiies. The company plans to raise Rs 20,000 crore in 4-5 years through land monetisation. Property consultants view the monetization of BSNL and MTNL land and properties in key cities of India as a strategic opportunity in the current realty market. Post-pandemic, all major commercial and residential property markets including Mumabi, Bengaluru,Delhi and Hyderabad have witnessing. BSNL and MTNL properties are located in prime areas with significant commercial and residential potential. The strategic location of these properties add considerable value, making them highly sought after. Land monetisation is one key area for reviving the ailing telecom firms. The government is making all efforts to improve the loss-making telcos’ operations. In 2019, a revival package worth around Rs 69,021 crore was provided to BSNL and MTNL that brought down their operating costs. In addition, the union cabinet in June 2023 approved the allotment of 4G/5G spectrum to BSNL with the total outlay of around Rs 89,047 crore through equity infusion.
 

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"All Eyes on Rafah" 

Israel shelling and airstrikes, over the weekend, killed at least 45 people  most of them sheltering in tents, in the southern Gaza City of Rafah. The strike, which Gaza medics said also left hundreds of civilians with shrapnel and burn wounds, was launched late on Sunday and drew condemnation from world leaders. Israeli forces pressed their assault on the border town despite an order last week from the top UN court to halt its operation there. "All Eyes on Rafah” is a phrase that refers to the ongoing genocide in Rafah, Gaza, with over 1.4 million Palestinians seeking shelter, Iran's Embassy. The phrase is meant as a request for bystanders to not look away from what’s happening in the city of Rafah—where as many as 1.4 million people are sheltering after fleeing from violent fighting elsewhere in Gaza—as Israel continues its offensive. 

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Leasing by Global Capability Centres in India 

Global Capability Centres (GCC) https://www.ey.com/en_in/consulting/global-capability-centers are making huge strides in india with office space leasing by such offshore units of multinational firms increasing by 17 percent year-on-year to 22.5 million square feet in 2023-2024. The growth during April 2023-March 2024 was primarily driven by key sectors such as Engineering and Manufacturing, BFSI (Banking, Financial Services, and Insurance) and Technology sectors https://www.rsm.global/india/service/banking-financial-services-and-insurance-bfsi . In January-March 2024, GCCs had a 29 percent share of the total office space leased in India.  

Around 60 percent of the total GCC leasing in January-March 2024 was in Bengaluru followed by Hyderabad (26 percent) and Delhi NCR (9 percent). Mumbai and Pune contributed 4 percent and 1 percent each during the quarter.

GCC sector saw a 30-35 percent share of total office leasing in India in the 2017-2019 period with over 1,250 operational GCCs. Between 2020 and 2022, GCCs accounted for 38–43 percent of the total office space leasing, housing over 1,580 operating GCCs with a talent pool of 1.66 million as of 2022. India is expected to host over 1,900 GCCs by 2025 with a professional talent pool that exceeds 2 million.

The report stated that major global players in sectors like BFSI, technology, and engineering and manufacturing (E&M) are anticipated to grow their GCC presence in India. 

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