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14 Biggest Real Estate Milestones In 70 Years Of Independent India

India has seen many policies in recent years but certain milestones are spread over decades. As the country will soon complete seven decades of independence, it’s worthwhile to remember the milestones that have had a long lasting impact on India’s real estate industry:

Formation of Chandigarh & Gandhinagar
The new capital cities of Chandigarh and Gandhinagar were formed in 1952 and 1960 respectively. These were the first, and rare, occasions of planning entirely new cities in the country.

1st city development plan
The Maharashtra Regional and Town Planning Act, 1966, first incorporated the practice of development plans and town planning. The Planning Commission also issued its first guidelines for district planning in 1969, which led to many states to formulate district plans. However, except a few excellent examples, these initiatives didn’t yield positive results.

Urban Land Ceiling Act
The Urban Land (Ceiling and Regulation) Act was enacted in 1976 to curb speculative hikes in land prices in urban areas and to provide low-income housing. However, because of poor implementation, it ended up worsening the situation of availability of land for social housing and social infrastructure in urban areas and eventually got repealed in all states but West Bengal and Kerala.

Formation of Institutions
The government started setting up institutions such as the Housing and Urban Development Company in 1970, City and Industrial Development Corporation in 1971, the Mumbai Metropolitan Region Development Authority in 1975, National Housing Bank in 1988, and the Housing Development Finance Corporation in 1994, to strengthen the residential real estate industry.

Economic Liberalisation
In the backdrop of a looming fiscal deficit crisis, the economy was liberalised in 1991 through reforms, which set in motion its modernisation process. This created newer job opportunities, and gave a big market of consumers, access to many products and services for the first time. This led to entry of multi-national corporations into India in a big way, and brought a new type of demand- contemporary world class office space.

1st Property Cycle
The phase of 1994-99 marked the completion of India’s first property cycle as the market, which was opened up in post liberalisation reforms saw property prices go up for the first time, thanks to NRIs and foreign capital. However, the realty market tapered off post-1995 due to inherent inefficiencies. With the advent of the Asian Financial Crisis in 1997-98, foreign capital got wiped out and growth in capital values came to a halt altogether.

Commercialisation of Airspace
The idea of commercialisation of airspace above transit routes was first introduced at Vashi station in 1992. Other stations such as Sanpada, Juinagar, Nerul and CBD Belapur – on the same railway line – followed in Vashi’s footsteps but met with lesser degrees of success. However, the latest transformation of Seawoods-Darave in 2017 railway station has met with phenomenal success.

Rise of India in Software World
India’s self-discovery as a global force in the software world got global recognition thanks to the Y2K bug that was another turning point for real estate industry as well. More foreign companies started setting up offices in cities like Hyderabad and Bengaluru in the post-Y2K era, which led to growth in these cities’ commercial and residential real estate.

FDI in Real Estate
Foreign direct investment (FDI) in real estate was first allowed in the year 2005, which opened up newer ways of funding and led to maturing of the industry in terms of business practices and product offerings. The FDI regime has been further liberalised in recent years leading to record private equity inflows and entry of foreign developers.

Rise of Shopping Malls
Just before the turn of the millennium, Indians got introduced to the concept of organised retail through the first mall: Spencer Plaza in Chennai; followed by Crossword in Mumbai and Ansal Plaza in Delhi. From the early 2000s, there has been a spurt of mall developments across the country.

Modernisation of Airports
The government approved the restructuring and modernisation of brownfield airports such as Mumbai and Delhi as well as greenfield airports at Bangalore and Hyderabad through the public-private partnership model in 2006. This led to the introduction concept of airport cities and airport precinct real estate.

Collapse of Lehman Brothers
The collapse of Lehman Brothers in 2008 triggered a panic, along with the sub-prime crisis leading investors to scout for rationality in investments across asset classes. The ensuing economic slowdown and risk of job losses made it difficult for investors to exit from their stakes in Indian real estate. The global financial crisis, however, had a big impact on commercial realty in India and a limited impact on residential realty in the country. Limited in the sense that the price fall led to quick sales and India’s residential market bounced back sooner than most expected.

The Real Estate Regulation (and Development) Act, commonly called RERA, has come into effect from May 1, 2017, to ensure that home buyers are not taken for a ride by unscrupulous developers. This landmark Act will make home buyers confident, empowered with information and well-protected and make the non-serious players disappear from the highly-fragmented residential real estate industry.

The Real Estate Investment Trusts (REITs) were first opened up in 2014 and the first REIT is due for launch soon and would allow small-ticket investments in commercial real estate of the country. Given the expanding universe of Grade-A office properties in Indian cities as well as rising rentals across their micro-markets, REITs offer an attractive way to investors to trade in prime commercial real estate.

Hilton Keen To Set Up Hotel In Bengaluru’s Whitefield

Hotel operator Hilton Worldwide said it is looking to set up more hotels in Bengaluru, encouraged by the demand from corporates during the weekdays. Whitefield is one of its preferred choices for the next property, given the cluster of technology companies operating there.

The company, which has two of its brands in operation in the city, opened a third one on Monday. This is the luxury brand Conrad, which it has launched in Ulsoor in association with property developer Prestige. This is the second Conrad hotel in the country; the first opened in Pune last year. The two other Hilton brands in the city include the namesake hotel in partnership with Embassy, and DoubleTree on the Outer Ring Road at Iblur Gate.

“We would definitely be excited to have something in Whitefield as we have no presence there. It is a very exciting market with the IT parks and corporates,” Daniel Welk, vice-president, operations, luxury – Asia Pacific of Hilton, said.

Welk, who was based out of New Delhi as VP of operations of Hilton Worldwide till early last year, added that one of the reasons for the choice is the big success of the Hilton hotel in Embassy Golf Links, which is inside a business park in the city and has an adjoining golf course that attracts corporate travellers.

“In Bengaluru, in the luxury market that we operate in, our occupancies between Tuesday and Thursday are close to the mid 80%, while in the weekends it drops to 60%, giving us an average of close to 70%,” Welk said. Hilton is also setting up a Hilton Garden Inn at Manyata Tech Park, expected to be operational by 2020.

The Indian hotel industry, which has faced some tough years since 2008 due to an abundance of supply, is also improving, said Welk. “Last year, for the first time, occupancy and room rates grew at 4.5% and 2.5%, respectively. This shows that demand and supply are more balanced,” he said.

The Hilton group is also in discussions with potential partners to bring its luxury brand, Waldorf Astoria, to India with preferred locations being New Delhi and Mumbai. Another Hilton brand heading to India will be the Hilton Curio – A Collection, which allows property owners to retain their name and essence with the Hilton management at the back-end. This could work for many of the palaces being converted into hotels.

Own land In Punjab? See Your Properties Details Online Soon

Those who own land in Punjab would soon be able see its details online, especially in case of partition of inherited land. Alongside making all 11 master plans available online, the state government plans to link these with the revenue records using geographic information system (GIS). The move can put a check on selling of land without recorded ownership and thus minimize litigation.

The Punjab urban development department hopes to achieve this with help from the Punjab remote sensing centre. It will, however, be the proposed revenue commission that will work out the issue of land titling, focusing on legal title instead of presumptive ownership.

The system has been working well in places like Columbus County (North Caroline), where property owners can check the zoning information, due taxes online and even download the relevant data.

However, experts point out that it will be an uphill task due to the involvement of various departments – rural development, local bodies, besides urban development, more so in land falling outside the municipal limits.

“GIS mapping can be used for online details for those seeking change of land use. But in case the government plans to have actual titles of lands, they will have to go through the tedious exercise of revenue department inviting objections in each area,” said a retired revenue official.

Once the online system is put in place, the ‘National Generic Document Registration System’ will be used to link land records so that transactions are recorded automatically in the land records. Similarly, scientific demarcation of land can be achieved in the state with ‘Electronic Total Station’ machines.

Meanwhile, additional chief secretary for urban development Vini Mahajan said in many caces family partitions of land are not reflected in the revenue records. “That is why partition cases take maximum time of revenue courts. The government is looking at ways to minimize the litigation with better systems. With use of cloud computing, state-wide database can be created. The e-CLU pilot project has already been launched,” she added.

Another official said that revenue department was the custodian of crucial land record and apart from use of information technology, record rooms needed to be organized scientifically.

Since most of the old land records are in Persian, the urban development department has put up a proposal for effectively using its staff with the knowledge of the language at the right positions. Some of the land records are so old that if damaged, these would be lost forever. A pilot project for digitizing such documents has been launched in Ludhiana.

ANAROCK Seeks Industry Status For Realty Sector In Budget

The government should reduce GST rate on under-construction properties, implement single-window clearance for real estate projects and give industry status to the entire sector, property consultant ANAROCK said in its budget wishlist to boost demand.

It also demanded higher tax incentives for first-time home buyers for the growth of real estate sector, which is facing multi-year slowdown.

“The current government has done a lot for the Indian real estate industry, even when it was in the form of hard decisions like demonetisation and the disruptive but very necessary RERA,” ANAROCK Chairman Anuj Puri said in a report.

He said although government has taken proactive stance towards cleaning up and regulating the sector, there are still several policy-related pain points where the upcoming Union Budget can make a decisive difference.

“As of now, under-construction properties are levied a GST of 12 per cent, which is significantly higher than the previous taxes. The government should strive to make GST a tax-neutral proposition so as to help in reviving demand in the real estate sector,” Puri said.

He further sought clarity and transparency on input tax credit that would help in rationalising the taxes.

On single-window clearance, Puri wondered why this policy initiative has not been taken so far.

“If implemented, single-window clearance can significantly reduce the overall projects cycle time and developers will be able to focus on their core business of project execution,” he said.

Post implementation of the real estate regulatory law (RERA), Puri said it has become all the more important to facilitate smooth clearances and approvals.

On industry status, he said it has been a long-standing demand which has so far gone unmet.

“Real estate is one of the key GDP contributors and the fourth-largest employment generator in India. Extending industry status to the entire real estate sector will help developers to raise funds at lower rates and, in turn, reduce their project costs – which will help in pushing demand”.

In last year’s budget, the government gave industry status to affordable housing segment.

ANAROCK demanded higher income tax benefits for the first time home buyers.

“Currently, a first-time homebuyer can claim an additional tax deduction of up to Rs 50,000 per financial year under section 80EE of the Income Tax Act, provided certain conditions are fulfilled. Tax exemption should be increased so as to incentivize first-time home buyers,” Puri said.

ANAROCK sought further tax rationalisation on REITs (Real Estate Investment Trust) as the first REIT is yet to be listed in India.

“Simplifying the taxation norms for REITs is a critical requirement for listings to start flowing in, which will benefit the entire real estate sector by the enhanced participation of a much broader bandwidth of investors,” Puri said.

Hyderabad Real Estate Sector Picks Up After 2-Year Lull

After a two-year lull due to demonetisation and resultant slowdown, the real estate sector in and around Hyderabad has picked up. Displaying strong signals of revival, the stamps and registration department reported a revenue of 429.99 crore for December, the highest for any month in 2017. For the first time in 2017, the total number of registrations at various sub-registrar offices crossed the one lakh mark in December.

The total revenue from land registrations and stamp duty from April to December 2017 touched the magic mark of 3,000 crore. The revenue during the same period in 2016 was 2,837 crore. Because of demonetisation, the revenue officials were not hopeful of meeting their target, but they heaved a sigh of relief when they managed to surpass the 2016 figure by 163 crore.

The revival of real estate sector has been evident in Ranga Reddy, Hyderabad and Medchal-Malkajgiri district, which are part of Greater Hyderabad Municipal Corporation and Hyderabad Metropolitan Development Authority limits. With the realty rates already peaking, dealers are now waiting for the completion of construction of integrated collectorates and police complexes in the proposed district headquarters, which they anticipate would trigger a second round of real estate boom in the districts.

According to sources, the TRS government’s focus on strengthening the real estate sector in areas where major IT companies are coming up, such as Nanakramguda, Gachibowli and surroundings of Balaji Chilkur temple within the HMDA limits, paid off. “Also contributing to the growth is the encouragement of the state government to investors to construct residential colonies near the proposed Pharma City and IT SEZs. The carving out of new districts in the vicinity of Hyderabad, like Shamshabad, Yadadari Bhuvanagiri and Vikarabad, is also paying dividends,” said sources.

The Knight Frank consultancy, which monitors real estate activity across the world, said in its latest report (released on Jan 7, 2018) that Hyderabad witnessed office space transaction of 3.34 million square feet from July to December 2017, a five per cent rise compared to the same period last year. However, on a full year basis, there was a fall of four per cent in 2017, said the report.

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