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THE BENGALURU BUILDERS' SALES SURGE IN 2017 “GST AND RERA MAY ADD TO OVERHEADS AND INCREASE HOUSING PRICES

 
 
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THE BENGALURU BUILDERS' SALES SURGE IN 2017 “GST AND RERA MAY ADD TO OVERHEADS AND INCREASE HOUSING PRICES
by System Administrator - Friday, 2 June 2017, 11:08 PM
 

By: M.S.Yatnatti: Editor and Video Journalist Bengaluru: Brigade's revenue from operations rose 11%, Sobha's grew 6.2%, and Prestige, the biggest among the city developers, reported a 5.5% increase to Rs 1,444 crore, compared to the year-ago quarter .Puravankara's revenue from operations rose 17.4% to Rs 371.53 crore."The sales from all the segments and, especially from the higher segments, improved overall realization for builders . "The market has improved in Hyderabad and in the current environment in Bengaluru, having stable sales is a good sign of improvement .Are you planning to build or buy your dream home in near future ? You may want to hold on for some time, as developers led by the Confederation of Real Estate Developers' Association of India (Credai), Bengaluru, are trying to convince the Karnataka government to cut or abolish stamp duty and registration fees in the wake of the goods and services tax (GST) being implemented from July .If the move is successful, you will definitely save some money. "Else, it is expected to burden home buyers by 10%15%," say some industry leaders. Reportedly Suresh Hari, secretary, Credai, Bengaluru, confirmed they will soon submit a petition to chief minister Siddaramaiah, seeking either to abolish or reduce stamp duty as it is expected to hurt home buyers with the introduction of GST. Though GST was introduced to eliminate multiple taxation, he said the real estate sector will be an exception because home buyers are bound to pay GST along with stamp duty and registration fees, which account for 5.6% of the property value. "GST and RERA will certainly add to overheads of the industry and increase housing prices by 10%-15%. It's time the state government steps in to protect home buyers by either abolishing or reducing stamp duty levied on all immovable property after implementation of GST," .

Reportedly when there's unsold inventory in a subdued market, property developers occasionally offer a guaranteed rental scheme to boost sales. Mantri Developers, the Tata Group, Confident Group are among those who have done it in the past. Now, Puravankara has tied up with e-commerce company Snap deal and property consultancy JLL to launch a similar scheme. A customer can buy a ready-to occupy apartment from Puravankara across Bengaluru, Chennai, Coimbatore and Kochi and lease it back to the company for a period of seven years. The flat booking can happen through Snap deal. Puravankara will pay a pre-agreed rental to the customer for the leased period and pay the common area maintenance amount to the building association. It will increase the rentals by 8% annually . JLL will help Puravankara in sub-leasing the apartments to tenants. Some 200 apartments will be part of this scheme. For many buyers who do not intend to stay in the apartment they have bought, such schemes can be attrac tive. They receive a guaranteed income and lowers the pressure of loan EMIs, if any . They do not have to worry about finding and dealing with tenants. A CEO of a rival company , who declined to be identified, said it will turn out to be a great scheme in attracting buyers if Puravankara can provide the promised rental appreciation for the stipulated period. In 2011, Confident Group had offered assured rentals of Rs 10,000 and Rs 14,000 for ready-to-move in 2 & 3 BHK flats in a project in Hoskote. Those flats measured between 1,100 sqft and 1,450 sqft and cost between Rs 21 lakh and Rs 31 lakh. Bengalurubased Mantri Developers launched a similar scheme named last year for two of its projects. As per news paper reports Bangaluru real estate is booming .