Friday, 22 July 2016


Urbanization goes hand in hand with the economic development of any region. The growth of a smart city can give way to massive opportunities, particularly from the real estate perspective. In the approach to the Smart Cities Mission, the objective is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of 'Smart' Solutions.

The real estate market in the eastern regions of India has shown a sluggish growth that too limited in one or two cities in each state. With the inclusion in 100 Smart Cities, there will be renewed focus on Industrial investments. We can also expect an increased investment in the areas of - BPO, Automobile, Education and Healthcare. Cities like Bhubanehswar (Odisha) and Guwahati (Assam) are the cities from Eastern part of the country to be shortlisted in first 20 smart city project. Other cities in the list of 100 from eastern belt include Pasighat(Arunachal Pradesh), Muzaffarpur, Bhagalpur,  Biharsharif from Bihar, Raipur and Bilaspur from Chattisgarh, Ranchi(Jharkhand), Imphal (Manipur), Shiling (Meghalaya), Aizwal (Mizoram), Kohima( Nagaland), Bhubaneshwar and Raurkela from Orissa, Namchi (Sikkim), Agartala (Tripura), New town Kolkata, Bidhannagar , Durgapur and Haldi from West Bengal.

This is a good move by the government to strengthen the underdeveloped cities and build the regional economies. With the development of these cities various avenues of growth will open up for the locals within their state. Currently the focus of real estate is in metros and a few adjoining cities. Tier 2 and tier 3 cities haven’t seen any growth spurt. This ultimately will lead to a revival of demand in the real estate market. Moreover, with multiple work options that will originate in these smart cities, and increasing income levels, the demand for housing will increase and also the demand for commercial space as various work options would need the set up.

So it definitely is a good move towards developing these cities and making them self sufficient.

Challenges in Building affordable housing

Urbanization is generating a massive housing shortage and this growing concentration of people in urban areas has led to problems of land shortage, housing shortfall and congested transit and has also severely stressed the existing basic amenities such as water, power and open spaces of the towns and cities. This is primarily due to the skyrocketing prices of land and real estate in urban areas. Development of large-scale affordable housing is the greatest necessity of urban India today. The objective of creating affordable housing is to provide adequate Affordable Housing shelter to all. Creation of affordable housing should encompass both – enabling people to buy and to rent, for which there is a need to put an institutional structure in place. While the concept of affordable housing seems to be a simple solution to current housing woes, its execution remains complicated due to the unclear policy framework. To make affordable housing work in India, it would require “will” from all the stakeholders by slightly adjusting their interests towards a wider social cause.

Ever since the first National Housing Policy in 1988, the government has tried to reform the housing and real estate sector yet many affordable housing schemes have underachieved. With infrastructure and investment being two of the pillars to transform India, the RERA Bill has built a road for real estate development. 

Affordable housing is a sector that has stood of late the test of time when large scale housing projects have failed to attract buyers and investors. Today, realty majors who previously focused only on mid-income and high-end housing projects are seriously looking at building up their presence in affordable housing as well. According to estimates, around 600 million people are expected to make urban India their home by 2031, a whopping 59% growth over 2011.

As announced by Ministry of Finance in his recent budget speech, India faces an urban housing shortage of approximately 20 million units, of which housing for so-called Economically Weaker Sections (EWS) and Lower Income Groups (LIG) – families with a monthly income of up to Rs 16,000 – accounts for over 90% of the gap. A number of schemes were introduced by previous governments to address the issue of affordable housing, including the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Rajiv Gandhi Awas Yojana and Affordable Housing in Partnership (AHIP) scheme

With the growing demand for affordable housing come the various challenges in building them. The biggest challenge is the lack of a clear definition and separate class for affordable housing as it is a relative concept and could have several implied meanings in different contexts. For some developers in tier 1 Cities, a unit worth Rs. 50 Lac is also considered to be affordable. And on other hand, few developers who actually build the so called affordable houses are selling the units in the price band of Rs. 10 Lac – Rs. 20 Lac. Developing affordable housing in Indian cities faces significant challenges due to several economic, regulatory and urban issues. Whilst the lack of availability of urban land, rising threshold costs of construction and regulatory issues are supply side constraints, lack of access to home finance is a serious demand side constraint, which impacts the ability of low income groups to buy housing. ‘Affordable Housing’ is an idea whose time has come, and sooner rather than later, planned sustainable urbanization will have to be by default and not by choice.

The Current Modi government has big plans to provide housing for all Indians by 2022. It recently announced that 2,508 cities in 26 states have been selected under ‘Pradhan Mantri Awas Yojana’ for providing affordable houses to low income families.

Meanwhile the need will continue to expand with increased migration to urban areas and development of smart cities. The central government and state housing boards will continue to be major providers of affordable housing. But they cannot do so on their own given the enormous scale of the problem. They thus need to recognize the imminent need to bring in the private sector in the form of Public Private Partnership (PPP), which can only happen when regulations are streamlined and made more effective.  It is heartening to see that the issue of housing finally finding national resonance and being a major priority of the Prime Minister. The time has come for the affordable housing policy framework to become rationalized and for the government and private sector to work together to unlock the potential of this enormous market and achieve the promise of a decent house for every Indian.

Another challenge that works as a hindrance for the affordable housing by private players is the high cost of land. As a developer they prefer to build high priced apartments to cover their cost as the low cost properties does not provide easy returns for their land investments. Also due to this high priced land options and lack of financing for developers, the burden is shared onto the customer by increasing the prices. Also due to the lack of Single Window clearance for various approvals required by the builder, the delay in approvals lead to higher interests paid by developers that ultimately leads to price increase and the properties no more remains within the affordable housing price band.
As India’s population continues to grow and more people move to its cities, affordable housing is going to become ever more important. Only by getting the foundations right now can the country cope with future pressures of rapid urbanization

Studio apartments

Studio apartment...why they are becoming popular among homebuyers, especially among the young generation

A studio Apartment is a relatively new concept and is gaining popularity in the urban cities of the country. As the urban population continues to grow, with the increasing number of nuclear families and single working professionals, the demand for these studio apartments has risen tremendously. There are its own pros & cons of living studio style.

 Especially at a time when the prices of the regular apartments are sky rocketing, these studio apartments are small, self contained and affordable. These units are way cheaper than the regular apartments. They also have a very negligible maintenance cost. Mostly these apartments are fully furnished; hence they reduce the cost and the burden of setting up your house needs is almost eradicated.  Today, the corporate office job takes the maximum day time of the person and he/she spends majority time in the office, they hardly have time for the household chores and maintenance.  Keeping this in mind, these apartments have come as a boon to the society and their demand is growing exponentially. With the growing demand, still the units available in the market are far less. This has also led to people buying studio apartment as second home and further renting it to bachelors or nuclear families. There was a time when one would aspire to own a well spacious house overlooking a lush green park or a pool. But today a person looks for a compact space all because of the nuclear family trend.  Over a period of time, studio style living has gained popularity amongst bachelors and working professionals. Developers have tapped onto this opportunity and have options in cities like Pune, Gurgaon, Mumbai, Bangalore, Hyderabad etc.  Studio apartments are already prevalent in international cities like Toronto, Singapore New York etc.

In short, Studio apartments simply out together are a much smarter way of living especially for single working professionals or newlywed couples. 

Mobile app of RE/MAX - RE/MAX iList

Why be tied to your desk when you can manage your real estate business while on the go!

With the growing dependency of real estate business on technology, a move by RE/MAX India to launch the iList mobile app has come in very supportive for our agents. The app will help the agents to plan and organize their day to day business activities in a more professional and organized manner with its agenda tool. Over and above an agent can also sync their Google and mobile calendars for their easy going day to day task. Hence making them more productive and efficient and making their approach more professional towards the real estate business. Also, the app provides the agents the convenience of syncing their mobile contacts into the app by just one click. This helps them to maintain their database more efficiently.  Currently, the app is beneficial to an agent when he has a buyer as he can use the buyer match feature that does not limit the agent if he does not have any inventory.

The next upgrade to the app will have following features: Listing: With Listing feature agents will be able to list properties from phone itself by clicking pictures and filling a pre defined form. This in turn will save time and effort of the agents. Within fraction of seconds he will be able to promote listing on social media, connected portals, emails etc. This app will help agents understand the importance of basic features like planning your agendas, to building your contact database, push notifications etc. This eventually will lead to better management of your real estate business and hence lead to better satisfied customers that will lead to more business for you.

How the things may change once the Real Estate Regulatory Bill is implemented

The Bill makes mandatory the disclosure of all information for registered projects like details of promoters, layout plan, land status, schedule of execution and status of various approvals. It seeks to enforce the contract between the developer and buyer and act as a fast track mechanism to settle disputes. The bill prohibits a developer from changing the plan in a project unless two-thirds of the buyers have agreed for such a change. In concise, the bill of 2016 is a big leap ahead which keeps the buyer's point in view and keeps a healthy check on the builder/seller. The bill casts a heavy responsibility on builders, in the form of project registration and mandatory disclosures on a regular basis through a portal to be maintained by the Real Estate Regulatory Authority (RERA). This will ultimately lead to more transparency in the way business is transacted and how information is flown from a developer to a buyer. Moreover, with 70% of their funds parked in escrow accounts, this will encourage developers not to get over leveraged and they cannot use their money on other projects and hence will be limited to projects. All this will eventually lead to a better demand and supply proportion in the market that will help in the price correction in the long run as well.
 The land cost is the highest one has to bear today, and currently, most developers are facing liquidity crises, which will be heightened due to the bill. Also, with cost of raw material and land going up added to which they have to sell on carpet area basis now will definitely lead to price rise.

In cities like Noida and Gurgaon markets, there are a lot of primary market developments.  Especially a market like Noida has over supply in terms of inventory lying unsold. With the passing of the bill and burden of projects coming upon the developers, the number of projects will reduce drastically that will help in the price fluctuations of the property. According to legal advisor, UC Pant of Pant associates, the future of real estate in Noida  is looking bleak as several inventories  are still lying unsold  and lying dormant. The recent announcement by the Noida Authority to hike the stamp duty by upto 2% has also proved a deterrent by many home buyers.  Gurgaon has for long been a witness of the rapid growth in the country over the years, thanks to the presence of MNCs and the ITeS sector. This has also attracted countless NRIs and expats, and brought in a thrilling explosion in Gurgaon's realty sector over the past decade and a half. However, like many other regions, Gurgaon too did not remain unaffected by the slump that hit the country's realty sector, and the past couple of years have been tough for its real estate market. All in all, to sum up Noida city will be affected as there are many small size broker turned builders and they will suffer the cash crunch. Gurgaon on the other hand as big scale developers who will not have liquidity issues and will continue to work with lesser affect on their business.

Technology in Real Estate

The Internet has reshaped how real estate is delivered to the consumer and how we as consumers manage our daily lives. Construction technology is swiftly sprouting in the Indian real estate market. The real estate and construction industry uses a number of off-the-shelf and custom-made IT solutions. Computer-aided-design tools, animation and visualization tools, project management software, geographical information systems, financial modeling software, back-end tools for accounting and payroll, and other business software tools are regularly being used by organisations in this sector.

The exponential growth in the real estate development comprising of the high-rise buildings have been observing a long growth period largely due to the current conventional construction system being extremely time consuming and costly. These continuous delays resulted in increase in cost which was borne by developers who eventually passed on the burden to the customer. Aluminium wall formwork, commonly known as MIVAN technology is tremendous substitution to the conventional technology with striking advantages of quality, time & requirement of skilled resources. This technology is being adopted by most developers as it saves time for both, the buyer and the seller. It allows the developer to have more control and therefore the ability to forecast the speed of construction, allowing him to confidently deliver the project within the promised timeline. An extension of the structural load-bearing walls and flat slab system is the pre-cast technology wherein various modules of the structure are cast off-site in factories and then assembled on the site. This technology is mainly suited for low rise value homes as it provides a structural framing of load bearing walls & solid slabs ideally suited for residential apartments.

Change is inevitable in the real estate industry. The new age developers are providing the required momentum to these new technologies in turn providing the much needed character to the construction industry. With professionalism on the rise there is more and more emphasis given to quality consciousness and timely delivery of projects giving drive to the switch from conventional to innovative methods. In order to ensure that there is a conscious movement from the conventional to the unconventional methods, unskilled to skilled labour, time saving and superior quality output, there needs to be a greater application and acceptance of these technologies by various developers across India

Journey from Broker to Realtor- How to make the difference

Over the past two decades, a lot of persona definitions have changed in the real estate market in India. The layman buyer has become more knowledgeable and more market aware. He has started to question the methods and opinions of his onetime friendly neighborhood broker. He’s now more curious about the developers, the neighborhood, the time to deliver and competitive options available. The buyer has started to weigh all these factors against the blind faith on the opinion of the real estate broker who has been advising his family for past couple of generations. However, even though he has these questions in his mind, he still lurks for the answers beneath. He requires the expertise from someone he can trust, someone whose advice aligns strongly to his undersupplied intellectual ability in this area. This is where the modern era broker a.k.a. a real estate consultant has found a market to breed.

Earlier the real estate broker was a mere mediator whose job was to act as the salesmen and make both the parties meet. The entire work was done by the buyer/ seller themselves. This was the time when the customer was not interested in the value additions of the services provided by the brokers. Over the last few years, the change in the customer profile has led to the change in the way business is dealt in real estate. The new world real estate consultant does not talk about properties. He instead focuses on trends and the markets as a whole. He is very well aware of where the world is moving. He is fully equipped with a lot of analytical tools and data to support his decision making. He also understands a buyer’s needs and then closely aligns them to the trends of the market and comes out with a perfect recommendation for the buyer. With such an approach, the real estate segment seems more science than just hunches which facilitate buyer trust building to a great extent.

Today, the real estate broker has undergone a transformation. This transformation in the real estate brokerage scene in India has been driven by many factors. First, the opening up of the economy and influx of international companies into India has brought about a major demand turnaround in real estate services. That has in turn translated into demand for real estate brokerage services that have best practices benchmarked with the best in global standards. Moreover, the volumes of transactions and consumer preference and choice demanded that systems be developed so that the customer can search, view and select from the comfort of his home. Inputs for decision making had to be made more comprehensive and at the same time, simple. All this has led to a complete makeover of the Broker’s image.

What seems to be the primary driver in shaping these drastic changes in this market are the role being played by big real estate associations, majorly the process driven approach that they devise, the expertise of the market that they share, awareness of the available tools and technology that they bring to the table. All these factors have led to blossoming of these associations in the market and have raised the bar for the primitive players and have challenged them to think beyond their A game as that is no more the best in the industry. The associations provide an incredible platform for realtors to talk, to learn and to be aware. They enrich the market with a lot of knowledge and analysis that helps the brokers to look at the big picture instead of simply thinking about getting a deal closed on a property.
With the world getting closer day by day due to the technological advancements, the impact is also visible on the real estate industry in India. Many forces have been playing their significant bit in revolutionizing this industry, be it Training, technology, real estate trends etc. Talking about Training, various real estate specialized courses are now available to Indian brokers to up skill themselves and professionally use these designations. A lot of professional colleges have started teaching real estate courses. Also associations like NAR India have collaborated with like minded people to impart education in this industry that was the need of the hour for this industry to grow and mature into a profession that stands on the firm pillars of Trust, Honesty and Integrity. This gives a Realtor a more qualified value and hence makes them different from the crowd. These are the Realtors who get noticed by a professional buyer who wants to deal with someone who works professionally with full honesty and candor. The client is automatically able to trust the Realtor and seek his advice for one of the toughest investment decision of his life. The world has become a common platform and the realtors have started working globally with the help of various business models and options available to trade internationally. In simple terms I believe that the local real estate business combined with global exposure which I call being Glocal (GLObal + loCAL) is the key to Success. 

With bigger players entering the market every day, it has become extremely critical for all the players to come up with the best they can. Attractive offers, competitive pricing and innovative launch ideas have become the trend of the day. The definition of “best” for the buyer however, remains very clear – Can I trust this consultant? A miniscule percentage of buyers may get swayed by the lucrative offers, but the majority is still looking for that trusted advisor, who can help them put their money to good ends.

With all these dynamics building in the market, the Government could not have chosen a better time to pass the Real Estate bill. The bill goes completely in line with these changes i.e. pushing the real estate towards an ethical and organized marketplace. Also the role of brokers at the conceptualization stage while planning new projects along with developers and even deciding pricing and marketing strategies has evolved and played its importance in this image makeover as a consultant and not just a mediator. The developers are refraining from direct sales team as it's an added cost and are now relying on these professional brokers for their sales.

All these factors have led to domestic brokers waking up to the need to get their act together, if they wanted to remain in business.  They started out on a series of measures. Some were simple, such as sprucing up their offices. Websites started mushrooming. Listing properties on the internet became a common practice. They increasingly started resorting to e-marketing. Earlier, the brokerage was a family run business where a son would join his father and learn the trade from him. So he learned the age old practices that were followed by earlier generations. But today, The broker has become a professional business where we see many professionals may well be an engineer, MBA, advocate, retired personnel, chartered accountants among others who are joining the pool of these organized lot of Realtors. Well-educated women too, are choosing this as a career option. These factors are slowly, but surely transforming the real estate brokerage industry. The makeover is for real. The new-age broker has arrived.

Hence, The new age broker is there for the astute customer; he is there to hand-hold, guide, advise and take the customer through the entire process of making a property purchase decision in a transparent, thorough and clean manner.