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An­other year comes to an end and brings with it a new be­gin­ning. Here are the top 10 hap­pen­ings of the year that rocked the sec­tor.

Realty Plus - - Contents - Text: Sapna Sri­vas­tava

For the real es­tate sec­tor year 2018 was a mixed bag. While it threw a few chal­lenges along the way, the year also brought some mo­ments of re­joice. Realty+ re­counts the hits and misses of the year gone by.

01 No more en­try bar­ri­ers for for­eign single brands

The year started on a good note with the gov­ern­ment de­cid­ing to per­mit 100 per cent FDI un­der au­to­matic route for single brand re­tail trad­ing. Large global re­tail­ers would now ac­cel­er­ate their en­try plans in In­dia rais­ing de­mand for real es­tate and al­lied ser­vices. What’s more, the Union Cab­i­net also de­clared real-es­tate broking ser­vice as not amount­ing to real es­tate busi­ness and there­fore el­i­gi­ble for 100 per cent FDI un­der au­to­matic route

02 Pref­er­en­tial sta­tus eludes af­ford­able hous­ing

In­fra­struc­ture sta­tus to af­ford­able hous­ing to en­sure lower bor­row­ing rates, tax con­ces­sions & in­creased flow of For­eign & Pri­vate Cap­i­tal as an­nounced by the gov­ern­ment failed to make any im­pres­sion on ground. Even af­ter one year banks are yet to treat loans to bud­get hous­ing as loans to in­fra­struc­ture. Fur­ther­more, to avail re­duced GST for af­ford­able hous­ing projects, there is no clar­ity on the def­i­ni­tion of af­ford­able hous­ing or how to get such a sta­tus.

03 In­dia at world’s cen­tre stage of de­sign

The day of glory came for In­dia when In­dian ar­chi­tect, ur­ban plan­ner, and ed­u­ca­tor Balkr­ishna Vithal­das (BV) Doshi won the 2018 Pritzker Prize, the high­est ac­co­lade in in­ter­na­tional ar­chi­tec­ture. Hav­ing worked with two masters of the 20th cen­tury: Le Cor­bus­ier and Louis Kahn, Doshi at 90 year of age is the old­est ever re­cip­i­ent of the prize and is also the first win­ner from In­dia.

04 In­dia’s re­tail sweetspot at­tracts global gi­ants

Wal­mart made a back­door en­try by ac­quir­ing Flip­kart for $16 bil­lion in the world’s largest ecom­merce deal. As the world’s largest re­tail gi­ant pours funds, it will boost in­vest­ments, job cre­ation and lo­gis­tics & ware­hous­ing sec­tor. IKEA that had been sourc­ing from In­dia for its global stores for more than 30 years fi­nally opened its first re­tail store in In­dia tar­get­ing one of the world’s largest con­sumer mar­kets. Not to be left be­hind, Ama­zon opened its largest ‘ful­fil­ment cen­tre’ in Kar­nataka, spread over 3,50,000 square feet with nearly 2 mil­lion cu­bic feet of stor­age space. Ama­zon In­dia’s fu­ture plans to open more than 50 ful­fil­ment cen­tres in 13 States across the coun­try is good news for In­dian realty sec­tor.

05 Sigh of re­lief for home­buy­ers

The vul­ner­a­bil­ity of home­buy­ers in in­sol­vency cases like Jaypee In­frat­ech and Am­ra­pali has fi­nally been ad­dressed by em­pow­er­ing them as fi­nan­cial cred­i­tors that was largely the pre­rog­a­tive of the fi­nan­cial in­sti­tu­tions so far. Un­der the In­sol­vency and Bank­ruptcy Code (IBC) amend­ment passed this year, home­buy­ers will now have a place in the Com­mit­tee of Cred­i­tors (COC) and will be a part of the de­ci­sions on the fu­ture of the bank­rupt real es­tate de­vel­oper.

06 Tragedy strikes God’s own coun­try

The worst flood in nearly a cen­tury lashed the south In­dian state of Ker­ala in July-au­gust. Even as Ker­ala grap­pled with its worst-ever calamity, the Cen­tre’s Cen­tre Rs 260 crore and later ad­di­tional Rs 500 crore as re­lief was slammed by cit­i­zens across the coun­try as over­look­ing the scale of the dis­as­ter terming it as gov­ern­ment’s po­lit­i­cal bias against the state. Also, the dis­as­ter once again set of the de­vel­op­ment v/s en­vi­ron­ment de­bate and the crit­i­cal ne­ces­sity of ef­fec­tive plan­ning of our cities to pre-empt the con­se­quences of nat­u­ral dis­as­ters.

07 A cloud with a sil­ver lin­ing

In­dia’s ru­pee slide to a record low of Rs71 to the dol­lar caused much an up­heaval in the fi­nan­cial mar­kets but the de­pre­ci­at­ing In­dian ru­pee also at­tracted hordes of NRIS to in­vest in res­i­den­tial prop­er­ties in In­dia. The in­dus­try statis­tics point to nearly 15-20% surge in se­ri­ous Nri-spe­cific in­quiries for prop­er­ties in In­dia this year.

08 Real-es­tate re­cov­ery bub­ble burst

Come mid-year, the slight re­cov­ery of real es­tate suf­fered a ma­jor set­back fol­low­ing the NBFC and bank­ing sec­tor melt­down. The blow up at IL&FS, which led to the domino ef­fect of tight­ened scru­tiny and lend­ing at NBFCS, caused an acute liq­uid­ity cri­sis in the realty in­dus­try. In such a sce­nario, de­vel­op­ers which have trimmed debt or have rea­son­able pres­ence in com­mer­cial, re­tail, or mid-in­come hous­ing, where growth has been higher will weather the chal­lenges.

09 Statue takes prece­dence over IITS and IIMS

On Oc­to­ber 31st In­dia in­au­gu­rated the world’s tallest statue in the re­mote cor­ner of Gu­jarat with much fan­fare. But many ques­tioned the wisdom of spend­ing 29.9 bil­lion ru­pees - much of it pub­lic funds on the 182m-tall sculp­ture of Sar­dar Val­lab­hb­hai Pa­tel and dis­plac­ing local tribal groups with spe­cial pro­tected sta­tus. The statue is more than twice the size of New York’s Statue of Lib­erty and dwarfs the 128m-high Spring Tem­ple Bud­dha in China, the world’s next-big­gest statue. Gov­ern­ment’s claim of growth in local econ­omy due to in­creased tourism is yet to be ver­i­fied.

10 ‘One na­tion, one tax’ goes awry for real es­tate

The sour end­ing of the year was the an­nounce­ment of GST on ready-to-move-in projects that do not have com­ple­tion cer­tifi­cates. Al­ready strug­gling with the tax cal­cu­la­tions and ITC pass-over of the GST regime, the new de­vel­op­ment adds to the woes of buy­ers, as well as the de­vel­op­ers.

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