Realty News

New west Bengaluru – A new beginning to holistic living

2016 was a dynamic year for the real estate market where policies like the Real Estate Regulatory Act (RERA), Goods and Services Tax (GST) and Real Estate Investment Trusts (REITs) paved the way for transparency and better investor sentiment in the market. 2017, is expected to be a year of fructification of these policies. Core cities are expected to witness an uptick in terms of real estate projects, lease and rent figures but the limelight this year, is on peripheral regions of these cities that are expected to emerge as new hubs for commercial and residential development.

A case in point is Bengaluru which, for decades, has lived by the name of the Garden City of India. Bestowed with a multicultural landscape, flourishing industry, a conducive weather cycle and extensive green cover, the city has been one of India’s most favourable living and working destinations. However, with the city’s increasing population density, it is an urgent need to diversify its development to nearby areas. Latest trends seem to substantiate this observation – that focused expansion into peripheral Bengaluru will help decongest Bengaluru of the pollution, infrastructure roadblocks and steer holistic growth in the state.

One of the fastest developing peripheries has been the Tumkur (Road) also known as New West Bengaluru on Bangalore’s Western Corridor. Acting as a gateway to North Karnataka and situated 70 km (43 mi) northwest of Bengaluru, Tumkur (Road) is on its way to being developed as a satellite city that will play a significant role in decongesting the Garden City. It is witnessing substantial growth in terms of new residential and industrious projects. Additionally, collaboration between city councils, governing bodies, real estate developers and industry has been ongoing to develop the region into a planned city, offering world class facilities, great connectivity and greener surroundings.

New West Bengaluru is set to witness major infrastructural developments like the proposed Mumbai-Bangalore Industrial Corridor that will allow connectivity to Bengaluru while maintaining exclusivity in living standards and comfort. Other initiatives like the Metro Rail – Phase 1 and Phase 2, and Peripheral Ring Road, which will form a half circle around the city from Tumkur Road to Hosur Road, are expected to significantly boost real estate development in the region. World-class facilities like Alur Cricket Stadium, Bengaluru International Exhibition Centre and Namma Metro, will further propel the development of New West Bengaluru as an international engagement hub with strong residential and commercial opportunities. Our latest report on the market outlook for real-estate, cites Tumkur (Road) as one of growth drivers for real estate in the state. With growing rents and better infrastructure, Tumkur is expected to set an example for the rest of Karnataka to follow. Investors, too, can capitalize on the location that forms a gateway between the old city and its upcoming smart regions.

Our report has projected an increase in end-user demand in Bengaluru. It also expects 2017 to witness more quality supply for retail real estate with an addition of almost 7 million sq. ft. of Grade A supply – a trend expected to be led by the southern cities of Hyderabad and Bangalore, with global and national brands entering and executing their expansions strategies to uniformly develop retail spaces across these cities. While these projections will drive the demand for quality and affordable living in Bengaluru, the effects are likely to also rub off on the peripheral areas.
The development of the New West Bengaluru is an indication of its growing importance as the next big location for the state of Karnataka. Upcoming residential projects in the region complemented with large scale infrastructural growth, will offer residents a peaceful existence while remaining connected to the bustling city of Bengaluru. Regions like Tumkur (Road) in the periphery of Bengaluru, with better planning, better technology, better governance and better design, can offer a picture-perfect option to meet the increased demand for housing amongst the city’s rapidly growing, working population. For residents and investors, this is a perfect time to be part of an international residential hub that is gearing towards sustainable and smart living.

Maharashtra RERA Rules in Place to Protect Homebuyers from May 1

Among small group of states & Union Territories to notify RERA; others could miss April 30 deadline

ramesh-nair

Ramesh Nair – CEO & Country Head, JLL India

 

 

With Maharashtra setting up a regulator in accordance with the Real Estate (Regulation and Development) Act – more commonly known as RERA -  it joins a small community of States that have notified their respective realty regulators to be set up for the first time ever. With the April 30 deadline for all states to pass RERA for their respective regions looming, only 13Sstates and Union Territories have reportedly notified their rules so far.

While the Centre had first shown the way to states by implementing RERA in the union territories last year, only Uttar Pradesh, Gujarat, Madhya Pradesh, Odisha and Delhi followed in its footsteps by notifying RERA rules in the ensuing months for their respective regions. Though Maharashtra’s draft RERA rules had covered all under-construction projects, irrespective of whether some of the individual towers/ phases received occupation certificate or not, it had diluted some other sections.

After activists raised objections, the Maharashtra Government decided to include these sections too. Similarly, buyers’ associations in both UP and Gujarat have been demanding that the States append missing sections in the State versions. Sixteen other States – including Haryana, Punjab, Kerala, Rajasthan, Karnataka, West Bengal, Bihar, and Tamil Nadu – have reportedly prepared draft rules and are expected to notify them soon.

Protection Against Project Delays & Defects

The Act passed by Indian Parliament last year, which was expected to be implemented in its full entirety by all States, is very clear on the subject of under-construction residential projects. Developers of ongoing projects as on the date of commencement of the Act in the respective State which have not received a completion certificates prior to the commencement of the Act will need to apply to the regulatory authority for registration of their project within three months of the commencement of the Act.

Whether all such ongoing projects get covered under the Act will, however, depend entirely on the respective State Governments. The consumer-centric law prescribes compulsory registration of all ongoing and upcoming real estate projects, as well as penalties and punitive measures on developers who delay their projects. All developers are required to disclose their project details on the regulator’s website, and provide quarterly updates on construction progress.

In case of project delays, the onus of paying the monthly interest on bank loans taken for under-construction flats will lie on developers – unlike earlier, when the burden fell on homebuyers. A separate account will be used to deposit 70% of the money collected for the project’s construction, and developers can draw from it only for construction purposes. The appellate tribunal will hear and act on all related grievances.

RERA also states that any structural or workmanship defects brought to the notice of a promoter within a period of five years from the date of handing over possession must be rectified by the promoter, without any further charge, within 30 days. If s/he fails to do so, the aggrieved allottee is entitled to receive appropriate compensation under RERA.

Brokers to under RERA’s ambit
  • In the addition to the promoter and allottees, RERA will also bring real estate brokers, who facilitate the sale and purchase of units in a project, within its ambit.
  • India’s real estate broking business was one of the easiest ones to enter and operate.
  • It’s called for no specific qualification, experience or code of practice and the government agencies only prescribed guidelines- rather expectations- from the broking community without defining roles and responsibility.
  • This will change as RERA demands all property brokers be registered with the regulator to be qualified for doing property brokerage business.
  • While the regulator is not expected to introduce qualifying criteria immediately, this registration will be conditional to broker’s acceptance of accountability and code of business practice. This will bring in transparency and responsibility the two virtues this sector need badly.

With the Central Government repeatedly nudging States to notify RERA latest by April 30 and establish their regulatory authorities and appellate tribunals, the question of how many will comply looms large. As a disruptive and groundbreaking legislation to clear opacity in the Indian real estate sector and make it more buyer-friendly, RERA definitely needs to be implemented in letter and spirit by all the States.