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RERA may revive real estate sector in second half, say experts

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New Delhi, April 10 : After May 1, when the Real Estate Regulatory Authority (RERA) is in place, the realty sector will likely see an uptrend with slight price correction, say industry players and stakeholders.

This is likely as genuine buyers may pitch in on the back of an improved consumer climate and lower home loan rates.

“Considering the present scenario, the next three-four months are like the gestation period for the realty sector and after six months the sector is likely to gain momentum. We are hoping to see positive impact in the second half of 2017 itself after RERA comes into full effect,” real estate advisory firm PropUrban Founder and CEO Mir Jaffer Ali told IANS.

According to the Real Estate (Regulation and Development) Act, 2016, which came into effect on May 1 last year, every state is supposed to have a RERA in a year’s time.

It will thereon become mandatory for all real estate projects, commercial and residential, to register with RERA for transparent execution.

“At a time when the setting up of a Real Estate Regulatory Authority in each state is set to bring in increased accountability in the markets, we can expect to witness some amount of correction in real estate prices in markets,” property consultant Cushman & Wakefield Managing Director (India) Anshul Jain told IANS.

Ali concurred and said that the cash component in property transactions will see a significant drop, resulting in a fall in land prices, which could be anywhere between 15 and 20 per cent at some places.

On a positive note, almost all banks have also lowered the home loan interest rates post demonetisation which would automatically generate more demand for housing with the sops given to affordable housing in this year’s Union Budget being an added advantage.

The start of 2017 has seen buyer sentiment improve and the anticipation is that with a positive electoral result and encouraging budgetary reforms, the sector should perform better over the course of the year.

Large developers such as the Lodha Group have seen sales of 850 units in February 2017, which indicates a gradual upward trend in consumer sentiment across the segment.

More so, with the dust of demonetisation finally settling, buyers’ sentiments are looking positive in anticipation of higher transparency and efficiency. Genuine requirement for homes coupled with reduced interest on home loans can be attributed to this.

According to a survey by PropUrban, once RERA is fully in place, about 45 per cent respondents would be investing within the next six months, while another 26 per cent are likely to take the plunge within a year.

“Interestingly, now the market will see the return of ‘real buyers’. As for the RERA and Benami Amendment Act, the sector is likely to see positive impact in the short-term — within one-two years,” Ali said.

Moreover, with the deadline of implementing RERA fast approaching, developers are trying to focus on completing their existing projects rather than launching new ones, which is good for the sector and buyers, he added.

With RERA, there would be mandatory disclosure of project details, including those of the promoter, project, land status and clearances. This would increase the credibility of developers and would protect consumer rights as well.

Dharmesh Jain, President, Confederation of Real Estate Developers’ Associations of India — Maharashtra Chamber of Housing Industry (CREDAI-MCHI), told IANS that RERA “will help in bringing in higher transparency and will help the customer to get possession in time. Also, one will know what they are paying for and would be sure they will get what they are promised. In fact, the developers will have to be accountable on the dates and timelines shared”.

Additionally, buyers and developers will now finally be on a level playing field with respect to penalties on delays. Both parties will now pay the same rate of interest in case the buyer delays payment or the developer delays giving possession.

“RERA is a long-term policy measure whose effect will be pretty permanent, in the sense that it will drive unscrupulous or unorganised developers off the market and leave a level playing field for credible players in its wake,” Ramesh Nair, CEO and Country Head of leading property consultant JLL India, told IANS.

“We are now seeing evidence of a gradual revival on the back of pro-consumer measures like RERA coming in, decisive court actions against errant developers, price corrections and renewed confidence in the economy,” he said.

Shubika Bilkha, Business Head, Real Estate Management Institute (REMI), told IANS, “These initiatives will contribute to organising this sector that has been traditionally fragmented and unorganised, while improving consumer confidence.”

By : Meghna Mittal

(Meghna Mittal can be reached at [email protected])

Business

Brent hits highest since March, spurred by coronavirus vaccine hopes

This follows positive trial results from Pfizer/BioNTech and Moderna.

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Brent Crude Oil

SINGAPORE: Brent crude prices hit their highest levels since March as news of a third promising coronavirus vaccine candidate spurred hopes of a quicker recovery in oil demand, while U.S. President-elect Joe Biden received the go-ahead to begin his leadership transition.

Brent crude futures rose 43 cents, or 0.9%, to $46.49 a barrel by 0522 GMT, while U.S. West Texas Intermediate crude added 45 cents, or 1.1%, to $43.51 a barrel.

Brent rose to a session high of $46.56 earlier on Tuesday, the highest level traded since early March before Saudi Arabia initiated a price war with Russia, which sent oil prices crashing. Both oil benchmarks settled up about 2% on Monday after gaining about 5% last week.

“Progress on developing and distributing a vaccine de-risks the path back to normal for oil markets,” said Stephen Innes, chief global markets strategist at financial services firm Axi.

“If mobility data is a measure of oil price sentiment, in the not too distant future, the vaccine will get people back on airplanes and cruise ships.”

AstraZeneca said on Monday its COVID-19 vaccine was 70% effective in pivotal trials and could be up to 90% effective, giving the world’s fight against the global pandemic a third new weapon that can be cheaper to make, easier to distribute and faster to scale-up than rivals.

This follows positive trial results from Pfizer/BioNTech and Moderna.

Also helping to ease uncertainty in financial markets, President Donald Trump on Monday allowed officials to proceed with a transition to Joe Biden’s incoming administration, giving his rival access to briefings and funding even as he vowed to persist with efforts to fight the election results.

U.S. crude oil inventories likely edged lower last week, while distillate stockpiles were seen decreasing for a 10th straight week, a preliminary Reuters poll showed on Monday, ahead of reports from the American Petroleum Institute and the Energy Information Administration (EIA).

Traders also focused on a week of technical meetings by OPEC and its allies to prepare the ground for next week’s ministerial gathering, which is set to discuss extending oil output curbs into next year due to weak demand amid a second wave of COVID-19.

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All-new i20 receives 20,000 bookings in 20 days: HMIL

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Hyundai auto expo

New Delhi: Automobile major Hyundai Motor India on Friday said its newly launched fourth generation premium compact car ‘the all-new i20’ has garnered 20,000 bookings in 20 days.

The company has made over 4,000 deliveries of the all-new i20 during Diwali season.

“Our customers continue to demonstrate a strong affinity for connected technologies offered by us. Nearly 45 per cent customers have preferred variants enabled with our already established ‘BlueLink’ technology,” said Tarun Garg, Director (Sales, Marketing & Service), Hyundai Motor India.

“Sunroof continues to be a customer favorite with close to 30 per cent bookings made for models with this particular feature. Similarly, in line with the needs of the current environment, 35 per cent customers have opted for models with ‘Industry Unique Oxyboost Air purifier’.”

Besides, Garg pointed out that the vehicles’ new and advanced transmission offerings such as ‘IVT, iMT, DCT’ have received a strong traction from 25 per cent of the customers.

Furthermore, he cited that almost 20 per cent of the customers have opted for ‘Powerful and Efficient 1.5 l U2 CRDi Diesel BS6 Powertrain’.

At present, Hyundai Motor India has 11 car models across segments including ‘SANTRO, GRAND i10, GRAND i10 NIOS, ELITE i20, AURA, VENUE, Spirited New VERNA, All New CRETA, ELANTRA, New 2020 TUCSON and KONA Electric’.

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Moody’s revises India’s FY21 GDP contraction to (-)10.6%

Under the scheme, manufacturers in key sectors will receive incentives in the form of direct payments over five years.

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New Delhi: Moody’s Investor Service on Thursday revised the contraction rate of India’s FY21 GDP to (-) 10.6 per cent from an earlier estimate of (-) 11.5 per cent.

The revision comes days after the Centre announced new stimulus measures.

Besides, Moody’s revised the forecast for the next financial year ending March 2022.

It now estimates a growth of 10.8 per cent from a rise of 10.6 per cent, which was predicted earlier.

“The latest measures (stimulus) aim to increase the competitiveness of India’s manufacturing sector and create jobs, while supporting infrastructure investment, credit availability and stressed sectors,” Moody’s said.

“As such, they present potential upside to our current growth forecasts, a credit positive.”

According to the ratings agency, consumer confidence in India remains relatively low amid a continued elevated number of daily new coronavirus cases, “although this has come down from a peak in September”.

“Stronger nominal GDP growth over the medium term would make it easier for India’s government to address its weak fiscal position, which the coronavirus has exacerbated; we forecast government debt to increase to 89.3 per cent of GDP in fiscal 2020 and decline to 87.5 per cent in fiscal 2021, from an already elevated 72.2 per cent in fiscal 2019,” Moody’s said.

“By contrast, we forecast the median for Baa-rated peers to rise to 60.8 per cent in 2020. The country’s mixed track record on revenue-raising measures lowers prospects for fiscal policy-driven budget consolidation. A sustained increase in GDP growth would therefore likely be a major driver of any durable future fiscal consolidation.”

Accordingly, the global ratings agency expects the general government fiscal deficit to remain wide, reaching around 12 per cent of GDP, with some upside risk, in fiscal 2020 and narrowing to about 7 per cent of GDP over the medium term, still above the deficit of 6.5 per cent of GDP in 2019.

Furthermore, the agency cited that new measures target manufacturing competitiveness.

The latest package follows the Rs 467 billion (0.2 per cent of GDP) of stimulus announced in October and close to Rs 2 trillion (1 per cent of GDP) of direct spending allocated in the government’s first stimulus package in May.

The government expects that no new borrowing will be required to fund the additional spending.

Among the new measures, the government has allocated Rs 1.5 trillion to extend the Production Linked Incentive (PLI) scheme across a further 10 sectors, including automotive and advance cell chemistry manufacturers.

Under the scheme, manufacturers in key sectors will receive incentives in the form of direct payments over five years.

The scheme aims to increase the competitiveness of India’s manufacturing sector, potentially reviving private investment, where year-on-year growth has been trending downward since the second quarter of 2018.

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