Affordable Housing: What is making people invest their hard-earned money; find out here

The most trending and talked-about affordable housing segment of real estate is now being well received by buyers, developers and various financial institutions. The concept of affordable housing is not new as it has always prevailed in the form of lower income group flats in major cities that have been bringing out extensive employment opportunities. However, the initiatives by private developers for the same came into view in the past 4 years due to various encouraging schemes by the Government of India and slowdown in the sales of mid-segment and upper-segment homes. Various factors like rapid urbanization and increased trend of nuclear families led to the high demand for these low-cost projects.

During 2014 itself, finance minister Arun Jaitley finally showcased major initiatives for the affordable housing segment and assigned Rs 4,000 crore. up from Rs 2,000 crore in 2013. to the National Housing Bank (NHB) in order to give credit to housing finance companies to provide requirements for the urban poor. The government simplified norms for the Foreign Direct Investment, including the revised definition of the affordable housing project. This was done to spur the foreign investment in the housing sector. Also, an announcement from the RBIallowed banks to raise long-term soft funds from the market to finance soft lending for home buyers for up to Rs 50 lakh for property values of up to Rs 65 lakh in the six metropolitan centers: Delhi, Mumbai, Kolkata, Chennai, Bangalore, and Hyderabad. The RBI made it clear that it would also keep a check on the definition of affordable housing.

The year 2015 was another year that focused on boosting the affordable housing implementation. The government realized that an estimated investment of $1.7 trillion was required to meet the housing shortage. The Union Cabinet approved construction of 2 crore houses for the urban poor in all the 4,041 statutory towns and cities of the country. Around 305 cities and towns were identified for building houses for urban poor under the Housing for All schemes. 989 cities and towns in 20 states were identified for affordable housing projects. These initiatives by the government were followed by the signing the MOA by 15 states with the Center agreeing to implement reforms ensuring support to the scheme. Meanwhile, Smart City, AMRUT and other housing missions were all welcomed by the government. Due to the government schemes for housing, various states turned up with the layout plan for affordable housing projects.

The Ministry of HUPA cleared housing schemes for 145 cities in West Bengal, MP, Jharkhand, Odisha, Mizoram, Gujarat, Tamil Nadu, and Telangana. Also, the Cabinet approved the Real Estate (Regulation and Development) Bill, 2016. However, the delay in various affordable housing projects around the nation gave the government a hard time as they became skeptical about the execution of low-cost housing scheme before the deadline.

The Pradhan Mantri Awas Yojana (PMAY) introduced in June 2016 came up with an assurance of quick execution. It introduced projects fitted with solar energy panels at a cost of Rs 253 crore under the scheme in Tamil Nadu. The government sanctioned 81,757 houses for urban poor in 7 states with an investment of Rs.4,076 cr. The Lok Sabha also cleared the Real Estate Bill that was dedicated to bringing the transparency into the real estate sector. The budget also announced several other benefits for the affordable housing segment during the same year.

The year 2017 gave a head start to the newly enacted laws and amendments like the RERA and GST. The Real Estate (Regulation & Development) Act came into action on 1 May 2017. This amendment came into force to ensure transparency in the real estate sector. The ministry of housing and urban poverty alleviation had initially prepared the framework paper on lawfully handling the real estate sector. Model law was then prepared for legislation by states and Union Territories in May 2008. This Act will ask developers to update information about their ongoing and under construction projects on the RERA website. Projects that have not received the completion certificate or are not registered with the regulatory bodies till the end of July would be under the radar.

GST, on the other hand, made the taxation process easier and transparent. According to the industry experts, this amendment in the taxation procedures would give a boost to the affordable housing projects as well. Though there wouldn’t be a direct impact on the affordable housing segment, but transparency about the unscrupulous transactions and the concept of rationalized taxes would attract more home buyers. Financial institutions have taken various initiatives in the form of interest reduction on home loans, that are paving way for the aspirants striving to buy their first home. The enactment of GST has not only made the taxation process easier but has also introduced transparency. These enactments are altogether fostering the market and also encouraging people to invest.

The Author is Mr. Gaurav Gupta Director, SG Estates Ltd.

Source - Financial Express

SG Estates Wishing You All a Marry Christmas and Happy New Year..

Should we do one big Real Estate Investment or break it into parts: Gaurav Gupta, Director, SG Estates Ltd.

India is a country with increasing population and it is currently seeing unprecedented growth in urbanization which is resulting in increased demand for Houses and sustained demand is leading to sustained growth in Real Estate Values. Real Estate has been a preferred choice of investment and as per one survey youth is preferring real estate over gold and stocks as an investment option. There is hardly any household which is not affected by the bug of Real Estate Investment. Talks on real estate can be heard everywhere from parks to parties. One major question that crosses many people mind who are putting money for pure investment is whether to put all money in buying one property or put that money in parts by buying multiple properties.
Experience shows return on investment in Real Estate is maximum if investment is made at just launch projects and diminishes as the project progresses and reaches completion. Choosing one Developer as against multiple developers is suggested because to crack the best deal .  Of course, it has to be ensured that Company / Developer is chosen, who are known for their commitment and timely delivery. Every care to be taken that person is not trapped with Company/Developer whose track record of Delivery of project is not sound.  

Supposedly a person has Rs.1.5 crore to invest and he is looking to invest in Ghaziabad. He may buy a flat of 2430 sq.ft. In SG Homes in Vasundhara or buy 3 units in SG Grand in Raj Nagar Extn. with average size of 930 sq.ft. And one unit in SG Homes in Vasundhara of 1000 sq.ft.

I personally believe that investing in parts in small properties  has major advantages over putting the entire money in single property. Small properties have more demand because they fit easily in the budget of the first time home buyers (segment which is driving the sales in Ghaziabad region) and are generally sold faster due to the small ticket size/actual users. Also if a portion of money is required to be sold to  meet some expenses, then one of the various properties can be sold rather than liquidating the entire investment.  Investing in 3-4 properties also safeguards against the market forces viz. in case  some property doesn't appreciate as per anticipated return, then other have a chance to compensate for the same. A person can also choose to invest in both residential and commercial real estate if he choose to invest in parts. Buying a single property is like putting all the eggs in a single basket which may turn to be risky.

Gaurav Gupta
SG Estates Ltd.
(Note: Example of projects of SG Estates Ltd. have been taken for reference purpose only and figures quoted are example and not the actual prices)

SG Estates Ltd. wishing you all a Happy Dusshera.

SG Estates Ltd - Festival Bonanza Great Offerings For Limited Time Period.

We at SG Estates Ltd. are committed to bring attractive and lucrative festival offers to buyer who look forward to get not only the dream home but with something extra in the festive season.
This time we are offering "Free Registration" for ready to move in properties for our projects in Raj Nagar Extn. namely SG Impressions Plus and SG Indigo, and SG Alpha Tower in Vasundhara  from 1st October 2013 to 31st October 2013. . Company will bear the 7% cost of stamp duty that has to be paid for property registration, resulting buyer will not have to arrange for the hefty amount that has to be paid for getting the property transfer. The benefit is worth Rs.4.75 Lacs for a 4 BHK flat. This is a very attractive proposition for the customers and we hope to generate good sales in the dull market scenario.
For under construction properties we are offering LCD (32 inches ) and 1.5 ton AC with every booking.

SG Estates Ltd. - Rajnagar Extn. still customers prefered choice due to budgeted homes(India Today Coverage)

Rajnagar Extn. still customers prefered choice due to budgeted homes says Gaurav Gupta Director SG Estates Ltd.(India Today Coverage)

To Read More See Our Realty Bytes Section - http://sgestates.in/print_coverages.aspx

Is the RBI decision of curbing 80:20 schemes right in this tight money market scenario?- Brief View Point by Gaurav Gupta, SG Estates Ltd.

Real Estate Industry is a highly capital intensive industry and no matter how much capital you invest in, funds are always scarce to acquire new projects due to sky rocketing land prices and all sorts of curb put in place by RBI on land funding by banks. Current market scenario is not very encouraging due to negative economic sentiment, global factors and falling domestic economy. In this situation of low sales and resultant liquidity woes, developers innovated the idea of old subvention schemes in the name of 80:20 or 75:25 schemes where buyer just have to put in initial margin money, banks used to fund the balance to developer on behalf of customer and builder used to service the EMIs on behalf of customer. So it was a win win situation for all 3 parties- Customer, Banks and Builder. Customer doesn't have to bear the burden of EMIs, banks disburses all and poor builder gets the money.
So where is the problem and why did RBI acted as a party spoiler.
RBI is of the opinion that if builder defaults in paying EMIs to the bank, it will be considered as default on part of buyer and also credit score of buyer will be affected. Also RBI wants to curb fund diversion which might happen due to surplus funding with the builder. But I believe that surplus funds with developer is a myth and not reality in the current situation.
It would have been better if the scheme would have continued for some more time. Though SG Estates Ltd. does not have any such scheme on any of the project at present but industry at large needed this support at this time.
RBI though has done a wonderful job in protecting the interest of the customers and has ensured safe landing but it is also expected that Real Estate Industry be given the due hand holding that is required. Real estate industry supports more than 100 ancillary industries and if real estate grows, so does economy.
Gaurav Gupta, Director, SG Estates Ltd.