Tokyo’s apartment prices rise to near bubble-era high in 2020: Data – ET RealEstate

TOKYO: Prices of newly-built apartments in the Tokyo area rose 1.7% last year, approaching the record highs seen during Japan‘s asset-inflated bubble era that ended in the early 1990s, the country’s Real Estate Economic Institute said.

Higher construction costs due to preparations for the Olympics and popularity of high-rise condominiums in formerly industrial waterfront areas helped drive the average apartment price up to 60.84 million yen ($586,410), the highest since 1990 when it reached a record 61.23 million yen.

The most expensive unit was a 690 million yen ($6.65 million) condominium in Daikanyama, the real estate data and consultancy firm said.

The number of sales fell 12.8% from a year earlier to 27,228 units, however, down around 70% from 1990 levels.

Real estate website Suumo said in a report last week that low interest rates and tax breaks helped sustain property demand amid the coronavirus outbreak.

Unlike people in other big cities such as New York which saw an exodus to the suburbs during the coronavirus pandemic, Tokyo residents appeared more interested in moving to new developments in central locations to reduce their commuting times, it said.

The Tokyo stock market’s Nikkei 225 average rose around 16% last year.



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ICRA expects recovery in housing demand to continue due to improved affordability – ET RealEstate

NEW DELHI: Housing affordability in India has historically been low, with unit pricing remaining high due to rising land costs, zoning and floor indices-based restrictions, and high transaction costs and taxes.

In recent years though, the government has been taking steps towards moderating real estate transaction/finance costs and taxes, through measures such as higher income tax incentives for first time buyers in the form of housing loan interest deduction, credit-linked subsidy schemes under PMAY for purchases in the affordable and mid segments, etc.

Post the onset of covid-19, a steep reduction in home loan rates, together with other state and central government incentives, has further supported affordability and in turn, housing demand, thereby stimulating some recovery from post-covid lows, said ICRA Ratings, a rating agency.

Housing sales volumes, which had declined by 62% year-on-year in Q1 FY2021, bounced back considerably in subsequent quarters, with a quarter-on-quarter growth of 60% in Q2 FY2021 and further quarter-on-quarter growth of 53% in Q3 FY2021, limiting the year-on-year dip to 7% in Q3 FY2021, according to the rating agency.

Shubham Jain, senior vice president and group head, ICRA, said, “In recent quarters reduced home loan rates, attractive payment schemes/discounts and reduction of stamp duties in certain key states on the back of Covid-19, has significantly brought down housing costs and stimulated housing demand.”

Repo-linked lending rate (RLLR) for home loans have touched a historical low, with the rates dropping below 7%. Banks are also offering discounts on processing fees etc.

Given the prevailing economic uncertainties, repo rates are likely to remain low over the near-to-medium term, and thus home buyers may continue to benefit from the same into FY2022.

Certain states, i.e. – Maharashtra and Karnataka have extended 2-3% reductions in stamp duty for a limited time, which has spurred housing registrations to reach all-time highs in some areas.

The Maharashtra government has also reduced construction premiums for developers by 50% up till December 2021, and in turn, has required the developers availing of this scheme to pay stamp duty on behalf of the buyers, which is expected to further boost demand in the region.

“A focused attempt to address affordability through reduced housing costs for the home-buyer would allow for the recent demand uptick to continue, and thereby enable the recovery of housing demand to pre-Covid levels within FY2022,” added Jain.

The upcoming budget 2021 may also add a stimulus by increasing income tax deductions and relaxing some of the caps currently applied.



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Students leave hostels in Dakshina Kannada, move into rented flats – ET RealEstate

MANGALURU: Many outstation students in Dakshina Kannada district are avoiding hostels and other places of shared accommodation over Covid-19 concerns. They are renting flats instead, so they can have greater control over their living environment.

Medical, paramedical and postgraduate students are driving this shift from hostels, where crowding and poor hygiene have always been a serious concern, to rental housing.

A medical student said that many girls were leaving hostels. “Usually, medical students move to rented facilities after the final year. But this time, many second and third-year students are renting homes. The trend picked up after some hostelites, who had rejoined college, tested positive for coronavirus,” the student added.

Another student, who recently moved to a fully furnished apartment with two others, said that outstation candidates were sticking around only because of annual examinations.

But it seems affordable rental housing is in short supply. Carol Fernandes, a first-year postgraduate student, settled for a PG after she could not find an apartment within her budget in Mangaluru. “I checked out many places, but the rent was too high,” she said.

A few medical college hostels have reported several Covid-19 cases among their outstation students. The colleges had created quarantine facilities for those testing positive.

The head of a premier medical college said that students were avoiding hostels, but infection fears were not the only reason: “Hostels introduced several restrictions in the wake of the pandemic. Students find it difficult to comply with all rules, so they are moving out.”



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Housing launches across top seven markets witness sequential spike in Q4, up 112%: Report – ET RealEstate

MUMBAI: The improvement in housing sales momentum in the last few months has managed to renew business confidence among real estate developers as indicated by the rising project launches activity across the country.

The ongoing fourth quarter has witnessed launch of 26,785 new residential units, more than twice the launches seen in the previous quarter that ended in September. Hyderabad property market dominated the new launches accounting for nearly 40% of the overall launches during the quarter and Bengaluru followed with over 16%, showed a JLL India report.

However, the new launches are still restricted when compared to the pre-COVID levels as more developers across markets are focussing on completion of their under-construction projects and clearing existing inventory.

While the overall sequential jump in launches is 112%, property markets of Bengaluru and Delhi-NCR have seen a substantial increase in launches at 304% and 221% rise respectively during the quarter.

The business confidence is rising given the rising sales activity. Top seven key Indian cities saw sales recovery gains of more than 50% in 2020 with Hyderabad, Mumbai and Delhi NCR gaining maximum foothold as compared to 2019. In Hyderabad, the Western Suburbs accounted for more than 70% of the overall sales, while in Mumbai, sales were driven by Thane and Navi Mumbai, with a combined contribution of over 50%. In Delhi-NCR, Noida and Ghaziabad accounted for nearly 80% of the sales.

“GDP in the July-September quarter of 2020 showed higher than expected recovery. During the same quarter, the housing market showed some initial signs of recovery as well, with sales increasing by 34% on a sequential basis. In the backdrop of issues like job security and fall in income levels, this uptick in sales was a significant achievement. The fourth quarter has witnessed a 51% improvement in residential sales, and not just that, the improvement has been evenly spread among all seven cities,” said Ramesh Nair, CEO and Country Head, India, JLL.

He believes the housing market is set to chart a new chapter of growth in 2021, fuelled by affordability, reinforced desire to own a house and renewed interest from certain buyer segments such as non-resident Indians (NRIs).

On an annual basis, overall launches across the top seven cities dipped by 31% to about 95,000 units in 2020. Development focus on mid and affordable segments continued during the quarter with more than 80% of the new launches in the sub Rs 1 crore category.

Moving ahead, the focus on this price segment is expected to continue with developers trying to reap benefits of strong pent-up demand in this segment. Most of the new launches in the southern markets of Bengaluru, Chennai and Hyderabad were in the sub Rs 1 crore category.

According to Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, as the sector shows signs of recovery, prominent developers are expected to be at an advantage and capture a greater share of the market.

Given that the affordable and mid-segments below Rs 1 crore continue to witness maximum sales traction, select developers are also reviewing their projects to make them more aligned to buyers, both in terms of product and price, he said while adding that buyers are unwilling to take any risks and are showing higher preference for completed projects, or projects where significant construction is underway.



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