Realty sector eyes New Year to end multi-year slowdown

NEW DELHI/MUMBAI: With a multi-year slowdown continuing in 2015 despite abundant supply and fall in prices, the real estate market is desperately looking for a recovery in the New Year when a new law is also expected to herald the much-needed transparency and accountability in the sector.

 

Experts said the housing sales have remained flat this year despite 15-20 per cent fall in prices and multiple interest rate cuts, while a glut continued in the market because of investors still Property developers and consultants hope that the new real estate law will see the light of day in 2016 and bring in the much-needed efficiency, transparency and accountability into this sector.

 

The proposed law, which was recently cleared by the Cabinet and would now go to Parliament for approval, can boost customers confidence, which has dented a lot because of delays of up to 5 years in delivery of projects forcing buyers to protest on streets and even go to courts.

Housing sales, which stood at 1.75 lakh units during last year in the primary markets of seven major cities, are likely to be around same level in 2015, property consultant JLL said, adding that sales were marginally down to 1.16 lakh units in the first nine months of this year.

Launches of new homes reduced drastically this year, still over 6 lakh housing units remain unsold in eight big cities, according to Knight Frank India.

Developers tried their best to boost sales by offering apartments, on both offline and online platforms, at discount laced with freebies and easier payment plans, but potential buyers chose to wait for further correction in housing prices

However, realtors are confident of turnaround in 2016, banking on the RBI's move to reduce key interest rate by 125 basis points and the government's steps like easing of FDI rules and launch of Housing for All and Smart Cities schemes that could provide new growth opportunity for the sector.

 

"We started this year on a very bad note. But the end was much better than the beginning in terms of housing sales. Overall, sales remained almost same as 2014," realtors' body CREDAI President Getamber Anand said.

He said the housing prices have gone down by an average 15-20 per cent in last 18 months. On outlook, Anand said: "There will be a constant steady increase in sales volume and velocity. We can hope for very robust 2016".

DLF's CEO Rajeev Talwar said: "With banks passing on the interest rate cuts in the form of reduction in home loan rates, we are already seeing signs of buyers coming back to the sector. As the impact of these measures unfolds, we expect buyers to make a comeback to the property market in 2016".

The year 2015 did not bring the hoped-for growth in housing segment but the silver lining is that the bad days seem to have bottomed out, JLL India Chairman and Country Head Anuj Puri said.

Stating that sales have picked up in some cities, he said: "2016 may well bring an end to the long and painful journey this sector has had, and signal an upward growth trajectory".

Unlike housing, the office and retail segments performed better and reported higher leasing numbers against 2014.

With developers facing severe liquidity crunch due to slow sales, there has been sharp jump in private equity investment in the realty sector to over Rs 18,000 crore.

According to property consultant Cushman & Wakefield, the PE investments in real estate was up by 84 per cent to Rs 18,300 crore in January-September of calendar year 2015, the highest since 2008.

Among the big-ticket deals, DLF sold 50 per cent stake each in two upcoming projects in Delhi for nearly to Rs 2,000 crore to Singapore's sovereign wealth fund GIC. It announced sale of its cinema business to PVR for about Rs 500 crore.

Godrej Properties sold 4.35 lakh sq ft of commercial space at BKC in Mumbai to healthcare products major Abbott for Rs 1,480 crore, while Piramal Realty raised Rs 2,700 crore from Warburg Pincus and Goldman Sachs.

On legal front, the year 2015 saw realty major DLF getting a major relief after the Securities Appellate Tribunal passed a 'majority order' quashing the three-year market ban imposed on the realty giant by regulator Sebi, even as the Presiding Officer dissented.

However, market regulator Sebi slapped fines totalling Rs 86 crore on DLF, its top executives, their family members and various other related entities for entering into "sham transactions" to mislead IPO investors about eight years ago.

Meanwhile, the government rationalised capital gain tax regime for the sponsors of newly-created business structures REITs and INViTs to give a fillip to the investments in realty and infrastructure sectors.

 

It also exempted the levy of minimum alternate tax (MAT) on gains and losses arising from exchange of shares with the units of a business trust REIT/InvIT. The liability under MAT would arise only on actual transfer of such units.

Yet, developers did not come forward to launch the REITs to raise funds by listing their rent-yielding commercial assets on stock exchanges.

Through the year, the real estate regulatory bill could not be passed much to the disappointment of consumers.

Realtors kept opposing the bill with demand that the government authorities, which give sanctions for development of the projects, should be brought under the ambit of law.

Last month, the government relaxed the foreign direct investment (FDI) norms in construction sector by removing two major conditions related to minimum built up area as well as capital requirement. It also eased rules for foreign investors to exit and repatriate their investments.

Looking back at 2015, CBRE South Asia Chairman and MD Anshuman Magazine said the investors are yet to return to the market despite reduced home loan rates, relaxation in loan-to- value (LTV) ratio in the housing sector, and significant discounts and attractive offers from developers.

However, he said the property market in 2016 is expected to see a qualitative change with realty firm likely to focus on quality construction and timely delivery.

In contrast to the housing segment, office space leasing rose by 17 per cent to 35 million sq ft in 2015 in seven top cities - Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad and Pune, mainly on the back of IT/ITeS sector and growing e-commerce business in the country.

Leasing of retail space is estimated to rise at about 2 million sq ft from 1.6 million sq ft in 2014, according to JLL India.

Paranjape Schemes chairman Shrikant Paranjape said, "The year was fairly an exciting one year for the sector where we have seen the government taking a keen interest on reviving the sector that has been stagnant for the last two years. The government has begun the process of initiating policies that will help sustain growth in the years to come."

Prajapati Constructions Managing Director Rajesh Prajapati said, "I see 2016 focusing on affordable, low- to mid-segment of the housing market. Also, with RBI reducing interest rate levels we expect more and more home buyers to take advantage and book their homes in 2016."

"The focus for 2016 will definitely be on affordable housing which has potential to give the much needed thrust to the entire sector. With rising prices there is a huge demand for the affordable to lower-mid segment housing," Paranjape said.

Shapoorji Pallonji Real Estate expects 2016 to witness net absorption of office space of around 30-32 msf, higher than 2015 levels. According to its Senior VP for Sales and Marketing Cyrus Engineer the realty industry outlook is looking increasingly positive, based on improving macro-economic fundamentals. There is a stable inflationary policy and over the long term this will continue to benefit asset prices leading to an increase in demand.

"Commercial realty is seeing increasing buoyancy and there is a particularly bullish feeling around the office market."

Affordability is Hyderabad Realty's Hallmark

HYDERABAD: The tag of being ‘the most affordable city’ among all the metros in India, is helping the Hyderabad real estate sector to draw buyers and investors from all parts of India to the city.

‘Being affordable’ is the only one feature which is helping it survive in spite of a prolonged slump in sales and stagnant growth. The prices have been so affordable in Hyderabad that there has been no increase in the prices of homes in the past three or four years so.

“Hyderabad is the most affordable metro city. Barring in a few areas in West Hyderabad  like Hitec City, Gachibowli and Nanakramguda, prices have remained more or less the same. As a result, not just local people but also people from other cities find it easy to buy a home here,” said Veer Sanjeev of a property portal, 99acres.com.

In a recently-released report on ‘affordability’ by financial advisers ArthaYantra, Hyderabad has emerged as the most affordable city. While the survey was done on the eight top cities in India, leave about top destinations like Mumbai and Bangalore, Hyderabad has been found to be more affordable than Pune and Ahmedabad.

“While cities like Delhi and Mumbai are out of reach for the middle-class Indians, even in cities like Chennai and Bangalore one’s annual income has to be at least Rs 15 lakh to be able to buy a home. But situation in Hyderabad is quite different with property prices staying stagnant for past three to four years. It is not only affordable to buy home here but also rentals are lower,” said Nitin B Vyakaranam, CEO of ArthaYantra.

While a good home in Hyderabad costs between Rs 3,000 and 5,000 per square foot (sft), in cities like Bangalore the starting price itself hovers around Rs 5,000 per sq ft for a middle-class buyer. Property prices are lower in Hyderabad than those in Kolkata and Pune, according to the observation of pan-Indian realtors.

New legislation to rein in realtors

The Kerala Real Estate (Regulation and Development) Act has finally come into force with the just concluded Assembly session passing the Bill last week. Hitherto, it remained only as an ordinance.

Government sources said the absence of stern laws in the real estate sector had compelled the State government to bring in legislation in this regard. Now, all complaints pending before the Consumer Disputes Redressal Forum and the Consumer Redressal Commission will be transferred to the Real Estate Regulatory Authority (RERA). Civil courts will not have jurisdiction over the RERA or the Real Estate Appellate Tribunal (REAT), which will be soon established to settle disputes.

The new law requires all real estate projects and real estate agents to be registered with the RERA. However, no registration is needed where the area of land proposed to be developed in a real estate project does not exceed 1,000 sq. m.

The same rule will apply when the number of building units proposed to be developed in a real estate project does not exceed 12. But then, the total carpet area of the building units should not exceed 1,000 sq.m.

Specific rules have been framed for real estate agents and buyers. The RERA has the powers to reject the application of the real estate agent. The allottees will be entitled to obtain information relating to the site and layouts, specification of the apartments and stage-wise time schedule of completion of project.

But the allottee will be liable to pay interest for any delay in payment towards any amount or charges, the new law says.

However, the Confederation of Real Estate Developers Association of India (Credai) says several bodies such as the Kerala Water Authority, the Kerala State Electricity Board, the Local Self-Government Institutions and Fire and Rescue Service Department, should be governed by the new Act.

Williston REALTORS® Complete Busy Year

 

Members of the Williston Board of REALTORS® recently raised $4,450 through an auction at their Christmas party to benefit their community. The money was split between two local organizations, Christmas for Veterans (CFV)/all veterans’ reunion, and Christmas for Kids.

Two local REALTORS® were honored for excellence and years of service. Norman Streifel, Streifel and Associates, was awarded the Omega Tau RHO (OTR) Medallion of Service as a token of high esteem and in recognition of his leadership skills. C

reated in 1950, the OTR honorary fraternity honors and inducts REALTORS® with exemplary dedication to their organization and their community.

Roger Cymbaluk, Basin Brokers, achieved Emeritus status from the National Association of REALTORS® (NAR). Emeritus status recognizes members who have held membership in NAR for a cumulative period of 40 years and have made significant contributions to their profession and their community.

Cymbaluk was North Dakota REALTOR® of the Year in 2002, has served on the ND Real Estate Commission for many years and has been active in local professional and civic organizations.

The Williston Board also inducted officers for 2016. These are: President: Jill Kjorstad, Fredricksen Real Estate Vice President: Mitzi Bestall, RE/MAX Bakken Realty Secretary/Treasurer: Heather Kitzman, Fredricksen Real Estate Past President: Kassie Gorder, Basin Brokers Director: Sarah Schroeder, RE/MAX Bakken Realty.

Realtors Support OCO, Homeless

 

 



Oswego County Opportunities (OCO) PATH program was once again the benefactor of the Oswego County Board of Realtors  annual fundraiser.  A transitional living program for homeless young people ages 16 – 21, PATH provides the opportunity for these young people to learn independent living skills, complete educational goals and become responsible members of the community.
“Each year our members open their hearts and their pocketbooks to support the PATH Program,” said Gene Friske, Executive Officer of the Oswego County Board of Realtors. “We are happy to be able to assist such a worthwhile endeavor as OCO’s PATH program and I am pleased to say that our support has increased steadily over the years.”
Friske added that in addition to their support of OCO’s PATH program, the Oswego County Board of Realtors also provides scholarship awards for 3 students from Oswego County High Schools.
Established in 1991 PATH is entering its 25th year of providing services to young people in the community.
For PATH Coordinator Karen Merrill it’s the support of caring individuals and organizations such as the Oswego County Board of Realtors that allow PATH to continue to offer services to homeless young people.
“The continued support we receive from the Oswego County Board of Realtors is vital. Many of the funding sources have limitations as to what is allowed to be spent and holidays are not included. Thanks to the generosity of the Oswego County Board of Realtors we are able to provide those in the PATH program with a little something special at Christmas. For many, the presents we provide them with will be the only ones they receive. When their Christmas lists include items such as food, shoes and clothing it brings things into perspective. When many of these youth are asked to make a Christmas list, some of them have never been asked what they wanted for the holidays before and cannot recall many joyful memories concerning the holiday season. The homeless youth population continues to be a very misunderstood and many times, unjustly criticized population. The PATH program helps youth realize that they are members of the community and that their community supports them and acknowledges the positive things they are doing to better themselves many of our participants graduate from high school, attend college and obtain jobs,” said Merrill.
“We could not exist without donations from the community, added Merrill. “These local funds count as a match for state and federal dollars, in essence, a dollar can potentially help the agency bring in two additional dollars from state and federal funding. We are very thankful for the generous donation we received from the Oswego County Board of Realtors and all the effort that goes into organizing their fundraiser.”
The OCO PATH program is funded by the United Way of Greater Oswego County, Oswego City/County Youth Bureau, NYS Office of Temporary Disability Assistance and the Department of Health and Human Services.
This article was supported by Grant Number 90CX6963 from the Department of Health and Human Services, Administration for Children and Families.
Its contents are solely the responsibility of OCO and do not necessarily represent the official views of the Department of Health and Human Services, Administration for Children and Families.
A non-profit agency, OCO will be celebrating 50 years of service in 2016.
OCO offers more than 50 human service programs that serve more than 24,000 people each year.
Operating in more than 80 locations throughout Oswego County, OCO’s workforce has more than 550 employees and 1,200 volunteers.


Meet Linda Cappella, CDAR's Realtor of the Year

 

I was living in Encino, and I was an office manager at a real estate company that did real estate auctions. I was cutting these huge checks for all men — all the people who worked in the industry were men at the time. This was in the mid-1980s. I was cutting these huge checks for these men and I thought, 'I need to get my license.' I went and got my real estate license in the 1990s and I started making the big bucks like the boys, so to speak.

I started doing a lot of propate and conservatorship work for real estate auctions. It was a very different concept, and it really gave me a nice background to go into residential when I moved out here to the desert in 1997.

When I came out here, we were building a home in Indian Ridge Country Club, and I was asked to join (the on-site sales office) and start up the resale side... to fine-tune it and kind of run it. I did not want to go into new home sales, I wanted to stay in resales. I joined Dyson and Dyson, then went onto Windermere, and I broadened my experience to Palm Desert, Indian Wells and La Quinta.

What was the real estate industry like when you joined it in 1990?

Especially in this business, I found it very challenging to keep up with the pace. (Real estate) was pretty predominantly men, and all the auctioneers were men, attorneys were primarily men. I think that’s what kind of pushed me, writing these huge checks for all these men, that’s what really pushed me to getting my license.

It was probably one of the best things I ever did, because I love the business. It's still like every deal is the first deal. It’s a thrill. Every listing is a challenge to get it sold, and it really is exciting. People say, Linda, you see yourself retiring in 10 years? No. I can’t imagine not doing this business.

How has the industry changed since you joined it? 

There’s a lot more women in the industry, which I think is great. Of course, I’ve seen the market at its peak, I’ve seen it at its lowest, right now it’s starting to come back. I’ve seen the industry when interest rates were very, very high, and people were paying a lot to get a loan.

Some years ago, even 15 years ago, it was a much older clientele, and now it’s more Millennials. A lot of the homes in the country clubs are owned by people who, when then they pass on, it’s their kids who are inheriting the houses, and they may not want to sell the house, they may want to rent it and keep it for themselves. You’re dealing with a broader age range now than I did when I first started out here in the late 1990s.

What do you hope to accomplish going forward? 

Real estate is really the heart and soul of what I do, and of course I’m very entrenched at the board level (at the California Desert Association of Realtors). I’m going to start my second year on the board of directors, and I absolutely love that... It's decision-making, very hands-on, and I really, really love that.

I've had a great time doing community service. We are constantly planning events to raise money for different local charities here in the desert. (Cappella pointed to Kelsey's Heroes and ThriveOn, local charities for which she believes CDAR's fundraising can make a big difference). I like to be involved with charity or volunteer work, and I'm finding I can do a lot of that, and I can involve all the Realtors in it. It's a nice way to spend any extra time that you would have — and with that and my grandkids and great-grandkids, that's all the time I've got!

Local Realtors collect toys, cash during holiday party

During its 2015 holiday party at Seacrets, the Coastal Association of Realtors collected over 100 toys for the Toys For Tots Foundation and raised $1,000 for Wounded Warrior Project.

This is the second year the association has collected donations for both organizations during its holiday party.

Sgt. Joshua Carson of the U.S. Marine Corps Recruiting Station in Salisbury helped collect the toys for the Toys For Tots Foundation.

Retired Army Cpl. John Rego attended the party on behalf of Wounded Warrior Proejct. He was a Special Operations Army Ranger in the 75th Ranger Regiment and was seriously injured in Iraq in April 2003. With the help of Wounded Warrior Project, Rego has fully recovered and now works for Coastal Association of Realtors affiliate member T&G Builders in Berlin and competes in triathlons.

“It’s always important to give back to our community, and CAR works throughout the year to fundraise and volunteer for various local organizations,” said CAR President Linda Moran. “But it’s particularly important to give back during the holidays. I’m very proud of our members for stepping up to collect more toys and donate more money than last year.”

Austin Realtors reveal annual award winners

 

Austin Board of Realtor's annual awards and leadership installation luncheon is still about three weeks away, but the honorees have been named — along with some official comments from the 2016 president, Aaron Farmer, the founder of Texas Discount Realty.

Farmer said the competition was more intense than ever among some 11,000 members.

Realtor of the Year: Bill Evans, owner or Austin Real Pros and former president of ABOR. Evans was selected based on his leadership with the organization and for his advocacy on behalf of the Texas Real Estate Political Action Committee.

Salesperson of the Year: Susan Horton, broker associate of John Horton Realty. With 25 years experience, Horton closed more than $14 million between September 2014 and August 2015. She has a history of participation and volunteerism is the real estate community.

Realtor Community Service Award: Socar Chatmon-Thomas, president and CEO of Elegant Estates by Auction. Chatmon Thomas serves on numerous community boards, including the Ballet Austin Guild, Austin Area Heritage Council, Foundation Communities and The Trinity Center for the Homeless. She volunteers at her church and for the Girl Scouts in addition to her volunteer leadership as the state director for the National Association of Realtors.

 

Rookie of the Year: Tracey Lazorik, Realtor with Diane Dopson Properties. A former employee of Dell Financial Services LP, Lazorik has been a Realtor for a little more than a year. In that short time, she has closed nearly $4 million in real estate deals. Lazorik also is a prolific volunteer with Saint Vincent de Paul ministries, Center for Child Protection and Austin Pets Alive.

Affiliate of the Year: Christina Isaac, business consultant with North American Title Co. Isaac is being honored for her business experience and community service, including Operation Turkey, which serves Thanksgiving meals to the homeless and others needing a hand, as well as Team Red White and Blue, which connects veterans with pertinent community activities.

This year's winners will be honored at the ABOR annual luncheon on Jan. 16 at the organization's headquarters on Spicewood Springs Road.

Greenwich Association of Realtors Comes through for Kids in Crisis in a Big Way

 

 

The Board of Directors of the Greenwich Association of Realtors and the Greenwich Multiple Listing Service, Inc. have approved a $10,000 donation to Kids in Crisis to support its mission in providing free, round-the-clock crisis counseling and temporary shelter for infants, children and teens.

The Greenwich Association of Realtors upped their commitment to Kids in Crisis after learning about the State of Connecticut’s cuts in funding.

“Realtors are committed to supporting their community and we encourage others in the community to help,” said Joann Erb, President of the Greenwich Association of Realtors.

“We’re grateful for the Greenwich Association of Realtors for their ongoing support of Kids in Crisis and their commitment to helping our children in light of the recent loss of state funding,” said Shari Shapiro, Executive Director of Kids in Crisis.

Kids in Crisis, based in Cos Cob, is Connecticut’s only free, round-the-clock agency providing emergency shelter, crisis counseling and community educational programs for children of all ages and families dealing with a wide range of crises – domestic violence, mental health and family problems, substance abuse, economic difficulties and more.

Since its founding in 1978, Kids in Crisis has helped more than 132,000 Connecticut children and families. Last year the organization provided assistance to 6,184 children and families.

The Greenwich Association of Realtors is the professional trade association for the real estate industry in Greenwich. Established in 1924, the association provides professional development and services for Realtors and represents the concerns and interests of private property and home ownership rights. The association has over 800 members and is headquartered in Greenwich.

Realtors Gain Status, Clients by Offering Swift Info

 

 

Prospective home buyers and sellers benefit when working with a Realtor who delivers meaningful information in a succinct, clear, yet conversational way.

Not surprisingly, real estate professionals who concentrate on fulfilling client needs see their practice grow as their reputation as a credible real estate expert expands.

Those conclusions came during a forum discussion as Realtors from throughout the nation met recently in San Diego.

Celeste Starchild, vice president of Move and general manager at ListHub, shared business intelligence about how consumers are increasingly using online and digital technology during the home search process.

She also discussed ways Realtors can utilize search engine optimization and targeted advertising to reach consumers at the time they are most ready to buy or sell a home.

According to Starchild, a majority of consumers today are what she called “digital natives.” Mostly from either the Millennial or Gen X generations, these are potential buyers who have been around technology their entire life and never experienced a time when the Internet was not readily available.

As time goes on and technology evolves, there are increasingly more people who don’t know how to do business without going online first.

“Consumers want immediate responses from their friends and family via email and texting,” she said. “Realtors risk missing an opportunity with this important buyer demographic if they aren’t responding in a timely, informative and personable manner.”

Explaining ways Realtors can be more visible to consumers online, Starchild said it’s important to focus advertising efforts on performing websites like Realtor.com, and utilizing search engine optimization can ensure that a Realtor’s name and brokerage show up at the top of the list on search engine sites.

“Search engine marketing drives high quality and high volume leads,” she said. “If you have the budget, you can pay for the right to have your name and business visible to practically all consumers looking for an agent online in a specific location.”

Predictive advertising efforts on social media – especially Facebook – can also be an extremely successful and cost-effective marketing tactic for Realtors.

Starchild described scenarios such as marriage, job relocation and child birth as home purchase drivers that Realtors can focus on by having a targeted ad with their information appear on the right side of a potential buyer’s Facebook page.

“Reaching the right consumers at the time they’re most ready to buy is powerful and effective,” she said.

Practically every interested buyer or seller will search online for information about a Realtor and likely read reviews before contacting them.

What comes up in those search results is what consumers will use to determine whether or not to reach out.

“It doesn’t matter where on a search list a Realtor shows up if they don’t have an updated profile with a professional headshot, listed contact information and a few client recommendations,” she said. “Failing to do so will ultimately lead to missed business.”

Once a potential client has requested information about a listing, Starchild said data shows a Realtor can increase their contact rate by as much as 900 percent by responding to leads in the first five minutes. Whether it’s personally in a few sentences or in an automated message with a promise to follow up quickly, that initial communication is crucial.

“Consumers are looking for facts, and they want them now,” she said. “How you respond and interact with them influences their decision on whether or not they’re your client forever, or they’re on to the next one.”

Bob Khalsa is President of the Santa Clarita Valley Division of the 9,100-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.