Regulator in Place – Sector gets into the act!

The real estate act, passed by the Rajya Sabha on Thursday, will help reshape the entire sector and play an important role in reviving the economy as a whole.

The Real Estate (Regulation and Development) Act will go a long way in reviving the real estate sector, as it will bring in transparency and financial discipline say consultants, developers, investors, and end users.

As the new law includes current projects under its ambit, developers are now obliged to set a timeline for their completion. But, first, each state government will have to appoint a Real Estate Regulator and frame the regulations.

This comes as a signal relief to home-buyers who have booked or bought houses in projects that have seen staggering delays in delivery, as the new law will increase their chances of getting possession of their houses at a predetermined, early date.

As for new buyers, once a project is registered, a prerequisite before any launch, the chances of timely delivery will improve vastly. This will bring back the confidence of buyers and help revive the sector. Anuj Puri, chairman and country head of JLL, India, says: “The enactment of RERA will almost single-handedly revamp the way this sector works across the board, from developers to end users and investors, to lending institutions and government agencies involved in buying and selling property. It is by far the most decisive step in taking the sector towards transparency and reaching towards the kind of standardized processes, procedures, and accountability guidelines that the industry requires to progress.”

Even developers and builders have welcomed the act, despite the fact that it is to regulate their business practices which brought notoriety, many confess in the hope that it will help revive the sector, facing an acute slowdown for some time now.

Currently, the sector is plagued with problems of delay sometimes extending up to even 10 years in the completion of projects. Of course, it is not that developers alone are to be blamed government agencies and court judgments are among the leading contributors to delay in projects.

But, the worst part is that developers hardly pay any penalty to customers. In the end, buyers take a double whammy in the form of EMIs on the home loan for houses under construction, even as they pay a matching amount on their rented houses. This turned away potential buyers from the market, which has led to the current slowdown in the sector.

The new act has a provision of stiff penalty for project delay and stipulates that builders have to pay the same interest to customer that the banks charge on their loan amount.
real estate
“If implemented in the right spirit, this law will help revive home-buyer confidence in the property market and could facilitate greater volumes of domestic as well as overseas investment flows into the sector,“ Anshuman Magazine, chairman and MD of CBRE, South Asia, said.

Also, the act has to be re-enacted in every state, as real estate is a state subject. Each state will have to frame rules to regulate the sector and appoint a regulator who will adjudicate the regulatory framework.

However, the developers’ community has stoutly opposed the provision in this law to bring current projects under its ambit.

Source: Epaperbeta.TimesofIndia.Com

Highway status to give push to projects in limbo

NH status to Gurgaon’s lifeline, Dwarka Expressway, will be much welcomed by buyers grappling with delayed possession.

Residential projects along the Dwarka Expressway in Gurgaon have had the ‘Work in Progress’ signboard for almost six years. Completion of the 18-km stretch has been primarily delayed due to land acquisition issues both in Gurgaon and Delhi. Projects along the Expressway are in various stages of construction – some almost complete, getting finishing touches; others still waiting for additional floors to be added.

Union transport minister Nitin Gadkari’s announcement this week to accord national highway status to Dwarka Expressway at the recently concluded Happening Haryana summit offers hope to thousands of home-buyers who have invested here and are awaiting possession of their homes. Haryana chief minister Manohar Lal Khattar has fixed June 2017 as the final deadline for the road.

So, how will a national highway status work for Dwarka Expressway? Experts say completion of the expressway will be speeded up as it will now be controlled by the National Highways Authority of India (NHAI). According to the Highways Act, after the transfer, Dwarka Expressway will come under a highway administrator appointed by the NHAI. Acquisition of land will also become quicker in Delhi and Gurgaon once Section 3 (d) of the National Highways Act is notified. Disputes pertaining to compensation will also get resolved more quickly when a road is built by NHAI.

Another question that remains to be answered is whether ‘noise’ being made around granting national highway status to the 150-metre wide stretch will have an impact on property prices? Prashant Kaura, founder and executive director, Gen-Real Property Advisers Private Limited, says that the market is currently depressed. Once the patches that have been held up due to land acquisition issues are developed and the highway is complete on the Haryana side, there may be some activity in the market. Right now, the few sales that are happening are being settled at sub ` 6000 per sq ft.

Projects to benefit most from the NH status will be the ones along Khirki Duala to Palam Vihar area that comprise sectors 88, 89, 90, 102, 104 etc. Many developers are likely to time their completion and delivery with the completion of the expressway. These may be the first ones to witness an upside in prices (about 7% to 8%). What this means is that if the expressway gets completed by next year, around 10,000 units will be up for delivery along the stretch. Having said that, projects along the Delhi side (1.5 km stretch) may take much longer, at least two to three years more, adds Kaura.

Source: Hindustan Times (Estates), Mar 12, 2016, Page 01

Gadkari puts e-way bypass on fast track

A day after finance minister Arun Jaitley pressed for expediting construction of alternative routes between Delhi and Gurgaon to decongest the expressway , his Cabinet colleague Nitin Gadkari on Tuesday said a proposal to build a new six-lane bypass road, originating from the Delhi – Gurgaon border on NH-8 and terminating near the NSG campus on the highway in Manesar, would be expedited.

The National Highways Authority of India has planned a link between Ring Road (close to R K Puram) and MG Road in Gurgaon via Nelson Mandela Road. A junction has been proposed on MG Road where both the bypass for NH-8 and the new link from Ring Road will join, an official said.“The stretch between Ring Road and Nelson Mandela Road will be elevated,“ the official added.

Admitting that fixing choke points on NH-8 was a tough task, Gadkari said the bypass between Delhi – Gurgaon border and Manesar will help decongest traffic. “The chief minister has assured me of sharing 50% cost of land acquisition for this project. We will start work soon. When I say soon, I mean by this year-end,“ he said while speaking at the Happening Haryana summit.

The bypass has significance since nearly 75-80% traffic coming from Delhi get off the expressway in Gurgaon itself. This 28-30 km bypass will pass through areas that are getting more real estate projects and industrial units, and will also join the Gurgaon – Alwar Road. “Once this road comes up, it will work as an alternative and the traffic load on existing stretch between in Gurgaon will reduce,“ said an NHAI official. Junior defence minister Rao Inderjit Singh termed NH-8 a “tired highway“ and sought the government’s quick intervention.

Gadkari also announced start of work in improving three junctions – Rajiv, Signature and IFFCO chowks by May 1. These crossings have become traffic nightmares.

Moreover, the highways minister announced the Dwarka Expressway would soon become a national highway following a request made by Haryana chief minister Manohar Lal Khattar.

Sources said Haryana wanted this since the project, which is at an advanced stage, is stuck due to non-availability of merely 1,400 meters on Delhi side. Once the Center takes it over, it will be easier to get the required land to complete the project.

Source: Epaperbeta.TimesofIndia.Com

National highway status for delayed Dwarka Expressway

FAST-TRACKED Gadkari accords N-H status to crucial road, move expected to speed up work on alternative link to Gurgaon.

Union transport minister Nitin Gadkari on Wednesday accorded ‘National Highway’ status to the much delayed 18-km Dwarka – Gurgaon Expressway project.

The expressway has been stuck in litigation for the last six years. After missing seven deadlines, Haryana chief minister fixed June 2017 as the final deadline for this road.

The decision to convert the crucial link as a national highway is expected to speed up its completion as it will now be controlled by the National Highways Authority of India (NHAI).

Gadkari made the announcement at the valedictory session of the Happening Haryana summit in Gurgaon on a request from CM Manohar Lal Khattar.

Additional chief secretary of Haryana P Raghavendra Rao had recently directed the Haryana Development Authority (HUDA) to open the 14-kilo meter stretch that is ready for use.

According to the Highway Act, after the transfer the Dwarka Expressway will be under a highway administrator appointed by the NHAI.

The road will also get dedicated funds for maintenance and re-carpeting unlike a state road. It will have to meet highway norms on parameters such as dimension, crust, central verge and lighting.

“Acquisition of land will become quicker in Delhi and Gurgaon once Section 3(d) of the National Highway Act is notified. This will ensure faster completion of this key road, which has remained stuck for the last six years”, said Ashok Sharma, project director, NHAI, Gurgaon.

Disputes related to compensation are also resolved more quickly when a road is being built by the NHAI.

It is likely that this road, which is 150 meters wide in Gurgaon and only 90 meters in Delhi, may get equal dimensions on both sides as the NHAI can invoke an emergency clause to acquire land.

The move will also come as a boost to the real estate projects along the expressway that are stuck because of lack of access.

Meanwhile, Delhi Gurgaon expressway concessionaire (MCEPL) apprehended a negative impact on its revenues after Gadkari announced national highway status to the Dwarka expressway. “We must be given compensation for expected loss of revenue,” said S Raghuman, CEO, MCEPL.

Source: Hindustan Times, Mar 9, 2016, Page 04

Kherki Daula-Palam Vihar Stretch of Dwarka e-way to open by Aug 22

Huda has said a 13.5-km section of Dwarka Expressway, from Kherki Daula to Palam Vihar, will become operational by August 22, after it settled land acquisition hurdles near Sector 100. It will fill a crucial connectivity gap on the 18-km-long road. The project is still caught up in land acquisition hurdles in Chauma village and on the Delhi side.

A senior Huda official said the expressway will be connected with Pataudi and Basai roads and all nearby sectors by August. Work in these areas was stuck due to construction of buildings for two private firms and shifting of high-tension cables. The two companies have been allotted alternate plots. Work on shifting the high-tension cables will start soon.

The opening of this stretch of the expressway will bring relief to thousands of home-buyers whose projects have been delayed because of the incomplete road. HUDA officials said it is likely to improve connectivity to at least 25 sectors on either side of the road.

According to sources, roads in sectors 83-84, 82-85, 81-86, 99-102, 102-102A, 120-103, 103-106, 109-112, 110A-111 are ready. After this stretch is opened, all these roads will be connected with the expressway. Most of the residential projects in these sectors are either complete or near completion.

“Recently, additional chief secretary of the department of town and country planning (DTCP) Raghvendra Rao had visited the expressway and directed HUDA to make a portion of the road, from Kherki Daula to Palam Vihar, operational by August,” said the official.

The development authority has also been instructed to complete work on service lanes for sectors along the stretch. Rao directed HUDA to provide basic infrastructure, like water supply, sewerage, storm water line and electricity to these sectors, so that people can move into their new homes.

The six-lane Dwarka Expressway, which was conceived over eight years ago, starts from Dwarka in Delhi and ends at Kherki Daula. It was expected to divert 40% of the traffic on NH-8 between Gurgaon and Delhi, but till date, work on only 14.33 km of the road has been completed. The state government has fixed a new deadline of June 2017 for its completion.

The delay has hit residential projects coming up along the expressway, as the area lacks basic amenities.

Source: Epaperbeta.Timesofindia.Com