Gujarat: Realty registrations spike, as hope lights up residential projects – ET RealEstate

Real estate project registrations across the state have picked up pace, thanks to the strong resurgence in demand and fast depleting unsold inventory. Registrations had taken a beating last fiscal due to the Covid-19 induced disruption.

As many as 743 real estate projects — residential, commercial, mixed development and plotted schemes — have been registered with the Gujarat Real Estate Regulatory Authority (GujRERA) in 2021-22 as of September 9. This translates to 55% of last fiscal’s total 1,345 project registrations, and that too in just the first five months of the current fiscal.

The total investment in these projects is estimated to be Rs 19,639 crore, which is about 60% of the total investment proposed through the registered projects last fiscal, shows data available with the state real estate regulatory authority.

“Increased number of real estate projects have been registered with the state regulatory authority, especially in the past three months. This is because the demand for residential real estate has picked up pace, with people upgrading to bigger dwellings. The unsold inventory has also come down to its lowest levels in the wake of fewer launches over the past two years due to several factors, including the pandemic,” said Tejas Joshi, president, CREDAI Ahmedabad-GIHED, city chapter of the Confederation of Real Estate Developers’ Associations of India (CREDAI).

While the commercial segment remains muted, the residential segment has seen a strong demand across affordable, premium, luxury and plotting categories. This could be seen from the fact that 310 (42%) of the total projects registered are purely residential, while 275 (37%) are mixed-use projects.

It may be mentioned that realty project registrations had declined by 23% to 1,345 in 2020-21 from 1,745 projects in 2019-20 due to the pandemic-induced slowdown.

Pressure rises on margins as production costs escalate

Real estate developers have seen their production cost escalating 10-12% with the rise in prices of cement, steel, sanitaryware, bricks and other construction materials.

The increase in diesel prices has further raised the material transportation costs. Although real estate prices have gone up, developers have not been able to fully pass on the higher production cost to the consumers.

“When many projects are hitting the market, developers cannot raise their prices,” said a city-based realtor. As a result, realtors’ margins are getting squeezed.
Gujarat: Realty registrations spike, as hope lights up residential projectsHowever, developers feel there can be a price hike. Steps such as a reduction in stamp duty and floor space index (FSI) fees can provide relief to both developers and consumers, said industry players.

New launches to gain momentum

With buoyant demand, along with the unsold inventory dwindling to its lowest level, realtors see more housing schemes coming to the market during the upcoming festive season.

“Ongoing projects which are slated to be completed in the next one or two years have seen bookings up to 60-70%. With demand going up, several new projects are going to be launched during the festive season of Navratri, Dussehra and Diwali this year,” added Joshi, who himself plans to launch two projects in the premium and luxury segment in the coming months.

According to real estate consultant Knight Frank India, the unsold inventory (housing) in Ahmedabad stood at 12,151 units in January-June 2021 as against 40,035 units in January-June 2016. The projects which were registered last year, but could not be launched are also being rolled out now, say market players.

“Given the improved sentiment and positivity in the market, developers also think that it is a time to roll out projects according to the customers’ current needs,” Joshi said.

Sales up 30-35%

Traditionally, residential property bookings remain negligible from April to August. “This year, however, developers are witnessing an increase in site visits and bookings even in this lull period,” said Dipak Patel, a city-based real estate developer.

“Riding on the resurgent demand, sales and bookings have gone up by at least 30-35% compared to last September. Sales have bounced back to the levels seen before the outbreak of the pandemic,” added Ashish Patel, president, CREDAI-Gujarat.

The uptick in sales could be seen from the fact that the state’s revenue from stamp duty and property registrations jumped 148% at Rs 3,061 crore during April-July 2021. The revenue had stood at Rs 1,234 crore in the same period last year. In July alone, this revenue surged by 65% to Rs 968 crore.

Realty consultant Knight Frank India’s latest report shows that 1,163 residential units were sold in Ahmedabad during April-June 2021, a growth of 362% over the same period last year. However, the sales were down when compared with the preceding quarter of January-March due to the second wave of the pandemic affecting sales on a quarter-on-quarter basis.

NRI investments flowing in: NRGs from the US, the UK and Canada are buying housing properties in their hometowns in the state. Till now, commercial and plotting schemes used to grab a larger share of the NRI investments. Now, they are also purchasing housing apartments.



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Ahmedabad: Home buyer drags NCPL Infracon over project delay – ET RealEstate

AHMEDABAD: A Satellite resident, who fought a protracted legal battle with a builder at RERA after he was denied possession of the premises for well over a year, has written to the regulatory body to collect Rs 33 lakh as penalty from him. According to the buyer’s calculation, the penalty to be collected from the builder for allegedly flouting orders, overcharging and leaving other financial issues unresolved comes to that amount.

The buyer, chartered accountant Tushar Shah, has claimed that he was charged money over the agreed sale price, not passed on some tax benefits that accrued and was given possession long after the promised handover.

Shah had booked a 1,273 sq foot office on the eight floor of Ratnakar Nine Square building opposite Keshavbaug Society for Rs 51 lakh in December 2016. He has claimed that builder Upendra Shah of NCPL Infracon LLP refused to give him possession of the office despite him having paid the full amount of the purchase price.

AC ki taisi! Demand for extra Rs 3L the final straw

The final straw in the bitter dispute came when the builder allegedly asked for an additional Rs 3 lakh for installing air-conditioners in the premises. Shah refused to pay the additional money, claiming it was not part of the agreement. Shah eventually got possession of the office after he approached the police and met the city police commissioner for assistance, and filed a complaint at the Satellite police station. Subsequently, he also reached out to Delhi-based Director General of Anti-Profiteering forum to seek recovery of an additional amount that the builder allegedly gained from transition from Service Tax regime to the current GST norms while the construction was on.

Took 90% payment at the time of booking

According to Shah, he was asked to pay Rs 46.56 lakh at the time of booking the Rs 51 lakh property. He paid up, but claimed the amount was way higher than the 20% permitted to be collected as initial payment.

“Builders cannot ask for more than 20% of the total sum till the agreement of sale is entered into. The sale agreement was to be entered into only in April 2017.”The buyer later paid the rest of the Rs 10 lakh, which included the remaining amount of the purchase, maintenance deposit and two years’ annual maintenance. He said he was promised possession in December 2018. But when he sought possession of the office in May 2019, builder Upendra Shah allegedly demanded an additional amount for the ACs he had fitted. “I told the builder that ACs were not part of the agreement with him.” When contacted, builder Upendra Shah said, “The case is presently on. If you wish, I can give you my advocate’s number. Let me send you his number.” He, however, did not send across his lawyer’s number. A subsequent call made to him and messages sent did not receive any response.

RERA penalty of Rs 10,000 per day

Tushar Shah approached RERA for dispute resolution. It passed an order on August 29, 2019 asking the builder to hand over possession of the office within 30 days. In a subsequent order after the builder did not give possession, RERA on January 17, 2020, asked the builder to pay Rs 10,000 per day to the authority for not implementing its order. Subsequently, Shah approached the police and also met then Commissioner of Police Ashish Bhatia in July, who passed instructions to the police station concerned to ensure that the sale deed was executed and the CA got the possession of his office.

“Two months later, on August 27, 2020, I was finally handed over possession.” Shah told Mirror. He now wants the builder to pay 24% interest on the amount he paid for a 20-month delay in possession, exactly the way the builder would have charged him for delayed payment.

When approached, head of RERA’s legal department, Asit Upadhyay, said, “A hearing will be held on March 4 for which we have called all individuals with similar problems.”



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