Indian Real Estate Market will boom under Modi-led government
Expectations of the real estate sector from the newly-formed Narendra Modi-led NDA Government runs high on the hope that with him at the helm of affairs, the sector will see much greater flow of Foreign Direct Investment (FDI) in the coming days.

However, a majority of stakeholders in the sector believe the real impact of a Modi-led government would be visible only after six-12 months, and that what is being seen now is much of euphoria than anything else.

Talking to ICE Connect, Ravindar Jha of Aditya Builders and Developers said, “We have great expectations from the Modi Government. In fact we are confident that the NDA Government would be able to bring more FDI in the real estate.” for info read Indian Real Estate Market will boom under Modi-led government
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  • Bringing FDI is not a solution for our RE problems.
    RE problems begin at home.
    Corruption,undervaluation,overpricing is the path adopted by all agencies connected with Re.
    Beginning from land-the acquisition and documentation does not move without cash greasing the system.
    Sanctions at municipal level-again rate cards are fixed by babus and netas.
    Construction work- short cuts by builders from time to time to cut costs,deviation from plans,unauthorised construction etc
    Finished product: asking for cash,extra charges from buyers.
    These problems will not disappear if FDI comes.
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  • FDI is a small part of the problem.

    The real problem is the corruption.

    Without the clear and transparent policies and implementation
    House is going to remain the greatest of the worries of us Indian.

    Otherwise it is just a mirage!
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  • Sector will boom.

    Prices will fall if supply increases.

    Low prices are good for buyers. Lots of buyers is good for builders.

    Remember how mobile phone and connectivity charges fell as sector boomed?

    Same economics in real estate. Builders will make 10% profit. Corruption and inefficiencies will go because at 10% return the middlemans return cannot be maintained.

    Land cheap and available. Flats cheap and in plenty.

    Good for lower middle class.

    Bad for property investors like us
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  • Right - if it has to boom two - three things hv to happen:

    1. Regulatory framework has to get on SEBI/TRAI strictness
    2. Prices have to fall down both land and building materials
    3. Property in general has to be end use orientated
    4. Black money has to be weeded out/ disincentivised. Circle rates might be increased for resale etc

    I think investors/intermediaries will hv a problem

    Also since this is a Noida forum - we need to get our ruling SP government out first for any meaningful development in any case
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  • UP government is busy in birthday celebrations and taking out full page advertisements.
    The images of supporters thrashing a toll booth attendant makes sad viewing.
    With this type of leaders how can RE improve?
    They benefit by keeping things opaque and complex.
    Grease will be a permanent accompaniment in such situations.
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  • NAVEDA....has 5 lakh High density concrete Jungle Poor quality houses UC within a radius of 10 kms....Majority Similar category (MIG)

    OVER SUPPLY

    and

    POOR QUALITY


    Yahaan Modi kya...Obama ko bhi le aao....Kucch nahin hoga....


    The netas and Babus of U.P have ONE SOLE INTENTION for past 10 years....TO LOOT THIS REGION......

    Builders are the means

    With such Intentions.....Dont expect anything special.....
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  • Oh fir yaar. What pleasure u get saying the same thing over nd over
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  • Lets consider that RE will make improvement by Modi Govt. What about all the options which have already been rolled out. Poor Quality RCC has already been constructed. FAR has already been increased.

    New Policies might make difference in Upcoming Projects. Current Projects will see the boom only if End User gets satisfactory Quality.
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  • Imagine a scenario. 10 lakh flats launched in distal NOIDA expressway and YEIDA under affordable scheme priced at 10 to 20 lakhs for 2 to 3BHK under a central funded scheme.

    Nearby a massive industrial park also built providing employment.

    What will happen to prices of existing YEW plots and flats and the NOIDA extension?

    Remember that JOBS are crucial. And jobs will come for lower middle class.

    Not upper middle class
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  • Originally Posted by Venkytalks
    Imagine a scenario. 10 lakh flats launched in distal NOIDA expressway and YEIDA under affordable scheme priced at 10 to 20 lakhs for 2 to 3BHK under a central funded scheme.

    Nearby a massive industrial park also built providing employment.

    What will happen to prices of existing YEW plots and flats and the NOIDA extension?

    Remember that JOBS are crucial. And jobs will come for lower middle class.

    Not upper middle class


    Venky.. It can only be Imagination. I don't think even Govt. will sale good quality 2BHK at this Price (DDA is one exmaple where LIG in Narela costs this range); Private Builder will never. Construction cost is Increasing day by day.

    Might be Possible with Very High FAR and low quality.
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  • Venky - building materials cost alone may not get you a 3bhk in 20 L.
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  • Yes. The low cost housing as we understand it has now become a mirage -especially in the vicinity of big cities. The new land acquisition bill ,increased cost of building material and corruption have ensured that.

    With economy improving you will see a further hardening in prices of steel and cement.

    You cannot eliminate corruption by wishing or even by arresting the corrupts.

    The market economy, transparency through regulations like UP apartment Act, Real Estate Regulatory bill (if passed), exemplary court judgements as has happened in recent cases and the most potent of all increased supply will to a great extent ensure that.

    And as somebody pointed out a good regulator like SEBI /TRAI will be a manna from the heaven.

    These things will happen but wheels of justice grind slowly in India. I ma sure that If NH24 can get widened, these things will also happen one day.

    The prices for LIGs and MIGs will never fall below Rs 3000-4000 per sq foot level even in Noida Extension.

    Since upper limit is capped by people's ability to pay, the extent of corruption will reduce automatically otherwise like the famous Enron (power company) case builders will price themselves out of the market and eventually die.

    In luxury market, at best seven or eight buliders can & will survive.

    Fat money will no longer be there for builders to make. How Much FAR , Gove can keep on increasing. Already there has been a democratization of builder community in Noida Extension with unknown names mushrooming and same may have happened or will happen to the broker community.

    The broker community will face existential dilemmas as the builders margin will reduce and it may not be a surprise if Flipkart starts selling flats by- passing brokers. Only nimble footed and smart niche players amongst the brokers and wannabe big builders may survive.

    rakesh sharma
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  • Originally Posted by dineshsays
    Venky - building materials cost alone may not get you a 3bhk in 20 L.


    In 2009, cost of construction was 800 psf for flats with ordinary specs in 20 story towers, 4 flats per floor, 2 lifts from OTIS elevators and Cummins gensets for power backup. That is on carpet area. That figure came from a scumbag builder in neherpar Faridabad.

    Take for example a 1150 sq ft super area 3BHk in JP Kosmos. How much is the carpet area of that flat? Balconies cost a lot less than a room. Construct a society like CGHS societies in Mayur Vihar, Rohini etc. Skip the swimming pools and club and make no frill housing units.

    Account for inflation from 2009 to 2015. Construction cost may have doubled now. Economy of scale helps. Steel prices that are declining now a days also help.

    I think 2BHK in 20 lacs is certainly doable if not a 3BHK.

    I see thousands of decent middle class families happily living in floors built on 48 sq mt and 60 sq mt plots in Rohini. There are 4 floors (G+3) built on a plot.

    If people can live in 48 sq mt (i.e 516 sq ft) carpet area floors, then small flats may be made livable too.

    Edited to add:

    I see G+3 type of CGHS societies all over Rohini and Paschim Vihar. These societies have no lifts. Buildings are no more than 15 meters high, so no lack or sunlight for those living on lower floors.

    So why can't low cost housing have low rise apartments without lifts? No lifts means no installation cost, running cost and maintenance cost. Further low rise apartments don't need heavy duty water pumps. Cheap and low power pumps can easily lift water to tanks on the mumtee on third floor roof. Also low rise apartments mean less time taken from start of excavation to completion because there are less number of floors in buildings. So less expense on interest on working capital during construction.
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  • @Punjabi - "So why can't low cost housing have low rise apartments without lifts? No lifts means no installation cost, running cost and maintenance cost."

    High rise buildings provide the most environment friendly housing on the planet.
    1. More land is left over for green spaces/parks etc
    2. Elevators are super efficient means of transportation.
    3. Central AC/Heating is better than individual ones.
    4. Less need to lay electrical cables/water pipes under roads. Lesser space required for roads
    5. Plug in a few schools/markets nearby and you have further cut down energy consumption.
    I could go on further here ...

    Given the density in our cities, we should be matching HongKong in FSI.
    Mumbai has an FSI of about 1.75. HK has 12 . Vested interests and a lack of infrastructure are preventing it currently. But demographic pressures make it inevitable over the next decade or two.

    It is an utter travesty that land in a large country like ours is so expensive.
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  • Because low density housing implies lower use of FAR/FSI and not only are they more expensive on a psf basis they give lesser returns on investment.

    And you hv to add land cost, marketing costs, cost of money, consultancy cost and others.

    1000 Rs sq ft in far flung places bhai kuch nahi hoga. (I am into this space so I know)

    New land aquisition bill says
    Look simple thing if the government will make on a no profit basis yes 20L for 2 bhk is possible - but issue is all govt authorities are money spinners for the state and do the most shabby construction you can think of - the DDA flats have gone from mediocre to terrible from the 80s to now, greater noida Authority - which is the nexus of all evil and corruption in the state - makes hugely overpriced hugely horrible dwellings - increase price which u forcibly pay after possession - possession is forced on you where you HAVE to write everthing is in perfect order and haha - most things are not even there. The clauses are such that hon Supreme Court sides with it. In short they are bigger theives than builder who make ghost cities with no interest for anyone to come and live.

    And if they do miraculously price things really low - how will you stop 'investors' from gobbling things up first.

    In short hyper low prices simply cannot happen unless some kind of subsidy, change of taxation, change of land aquisition, forced change of building materials costing etc and with that authority officials getting no money (I would enjoy that SOOO MUCH....ba$$$$$)

    Not I am not saying low cost housing cant happen - but not hyper low cost like you suggest. It will be in no ones interest unless Modi comes and screws the authorities big big time
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