RBI Rate Cut Positive, But A Ways To Go

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The RBI’s big repo rate cut is encouraging, but definitely not a game-changer as yet. The cut in repo rate is magnanimous and bigger than expected, and surely make a difference in sentiment.

However, there is invariably a lag between the directives given by the RBI with regards to lowering lending rates, and banks complying with these directives. Reduced lending rates are critical at this point, and the rate of loan purchases via home loans must pick up significantly to bring about a revival in the real estate market.

This is especially true for cost-sensitive markets like Pune. The leading nationalized banks must proactively take up the initiative of aligning their lending rates to affordability, so that other banks will respond to the need to stay competitive and follow suit.

What Genuine Green Homes Are All About

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

Pune’s ‘green living’ housing projects have been the most effective response to the need for sustainable homes for our future. Green residential projects are not just limited to being a trend anymore – they are rapidly becoming the new standard for healthy and responsible living.

Facilitating a better and cleaner lifestyle, these green projects bring with them aspects like sustainable design, scientific construction and energy-efficient operations. Green homes also achieve optimum energy efficiency, and therefore savings.

A genuine green living residential project is characterized by site sensitivity, energy efficiency, water efficiency and environmental friendliness.

What Is Site Responsiveness?

In simple terms, site responsiveness in a green residential project means that the fertility of the soil in the construction area has been properly preserved, and in fact put to work in the landscaping/beautification process.

This responsiveness is also measured by the number of native trees that have been planted to ensure that the landscape is perfectly balanced with its surroundings.

Also, green homes projects will often integrate reflective finishes on all exposed surfaces in order to minimize the amount of heat entering the indoor premises. Aimed at reducing the harmful ‘heat island effect’, this reduces the cost of insulation required in individual homes to a great extent.

Site responsiveness will further include project designs that reduce the need for vehicle usage. When all basic amenities are within walking distance, personal vehicles will only be used for longer transportation.

Many green residences are also equipped with charging facilities in the parking area. This encourages the use of electric cars – an effective alternative to vehicle emissions.

Energy Efficiency In Green Homes Projects

In India, plumbing, electric systems and air conditioning in green homes will strictly abide by the National Energy Consumption Codes.

A genuine green project will never use chemicals such as HCFC and CFC in air conditioning and cooling. Insulating the walls, ceilings and all exposed surfaces with reflective finished keeps the homes cooler, thus saving energy usage.

Energy efficiency can also be achieved by using photovoltaic cells and solar energy, as non-polluting alternatives to backup generators.

rainwater harvesting
Rainwater Harvesting – Promoting Water Efficiency In Pune’s Hour Of Need

In a city like Pune, deficient monsoons play havoc with the city’s ability to cater to its citizens’ annual water requirements. Rainwater harvesting systems are an acknowledged answer to this problem – a solution which citizens can actively promote by choosing green homes equipped with adequate water harvesting.

Water harvesting systems fitted to the roof of buildings provide the water used in gardening, project maintenance and sanitation, and result in reduced water usage and water bills. Further, every residential unit in a genuine green homes project needs to be fitted with water-efficient flow fittings and flushes.

Environmentally Friendly Construction

The protocols involved in rendering a green homes project environmentally friendly begin at the construction stage itself. They include using up all of the construction material on site and not depending on landfills to dump construction waste.

Construction of genuinely green buildings will also involve using recycled materials wherever possible. Throughout the process, all forms of inorganic waste are collected and treated separately.

One of the most outstanding examples of eco-friendly construction is seen in Aluform – a versatile construction technology that involves recyclable and reusable materials, and results in durable and highly sustainable buildings.

The wood panels customarily used in construction can be used only about 25 times before they must be scrapped. However, the aluminum panels used in Aluform construction have a usage cycle of as much as 200 times.

The Aluform construction process is a major leap forward in sustainable construction, and is being increasingly used by reputed developers in cities like Pune.

Sustainable and green living is about coexisting in harmony with elements that created us. The investment that both developers and home buyers make into this cause is completely worth it, as it promotes healthier and more responsible living and also incrementally increases the planet’s ability to accommodate human habitation.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Single-Window Clearance Is The Need Of The Hour

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The Indian real estate market is in dire need of single-window clearances for residential projects. The process of project approval must be revised so that developers can launch more projects and increase supply, which will help in keeping prices down. The current system is completely counter-productive in its present form – if it can be called a form at all.

The lack of a streamlined projects approval mechanism is a symptom of India’s retrograde bureaucratic machinery which causes untold losses to all stakeholders. The ill-effects are most visibly seen in Maharashtra, where the various constraints on real estate development have in fact played a big role reducing the pace of State-level growth.

It is certainly a well-known fact that real estate is one of the major contributors to GDP, and this sector cannot perform optimally in a scenario where a bewildering multitude of agencies are involved in processing approvals for real estate projects.

If we study the massive numbers of clearances and approvals that are required for residential projects in India, the challenges that developers have to face become very apparent. The old English proverb ‘there’s many a slip between the cup and the lip’ is very fitting here. The extensive efforts that a developer in India has to put in before a project is even approved for construction are not well understood.

Moreover, the procedural complications only increase once a project is cleared for development. A project can get road-blocked at any stage between construction commencement and completion because one or the other clearance or approval is being delayed by some government department or the other.

approvals

Developers face multiple repercussions because of these delays. In the first place, it affects the time it takes for returns to come in from a project. Secondly, delivery timelines play a big role in how attractive a developer’s projects are to investors, and how much confidence end users will have in a developer. In other words, developers not only suffer financial loss because of approval delays, but also lose credibility because of this.

With single-window approval to housing projects, residential prices can come by 30-35% as a result. The introduction of a single-window housing project approval system would make it possible for residential developers to increase the supply of housing, which would not only help in addressing the country’s massive requirement for housing but also increase the government’s revenue collections from increased stamp duty and registrations.

Also, increased housing supply will mean healthier competition among developers, which will result in more rational and uniform pricing as well as boost innovation in project designs. These considerations combine to make a very compelling case for the BJP-led government to finally make single-window approvals for housing a reality.

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.

Why Real Estate Investment Beats The Stock Market

Kishor Pate 2Kishor Pate, CMD – Amit Enterprises Housing Ltd.

The stock market has always played the role of a barometer to the economic mood of a nation. Real estate is one of the prime elements in the latter context.

In fact, an interesting and important relationship exists between real estate investments and the stock index. While both offer a profitable investment opportunity, both also carry risks that complement each other.

A common belief has been that the profit margins associated with stock investment has been higher when compared to alternative asset investments. Stocks are liquid and flexible, whereas real estate is not. Also, stocks offer growth rates that real estate investment can rarely match.

Lastly, stocks are also easier to acquire and operate than buying a property as investment. Investment property also includes several added elements like insurance, maintenance, taxes, legal fees, broker commissions, etc.

It has also been observed that dramatic movements in the global stock market will throw up salient differences between real estate and equity investment. The strength and weakness of the global economy appears to influence both real estate and stock prices.

According to the CXO Financial Advisory Group based in U.S., real estate and stocks are negatively correlated. After the great recession, the stock market lost about 60% of its value. With loans getting cheaper, people now invested more in real estate, since it promises guaranteed returns in the future.

property investmentA crucial point to note here is that while stock prices can rise and fall, real estate investment almost always brings in more profits. In fact, the allocation towards real estate in most investors’ portfolios has steadily risen since the Global Financial Crisis. This is because investors seek to take advantage of the low correlation between the asset class and equity market.

We already know that volatility is always caused by the monetary and fiscal policies of governments, and this has effectively increased the focus on real estate investments. Rising inflation has the same kind of effect on both investments. Increased inflation lowers the currency value, and in turn drives up the price of assets – real estate very prominent among the asset classes.

The outcome of stock market volatility is more evident if one follows the changes in real estate markets. Real estate investment provides more stability and can also deliver a continuous income stream, and this is why it attracts more investors. The slow but steady correlation between the stock markets and real estate markets provides the important advantage of diversification in an investor’s portfolio.

Also, investors can be more confident of constant returns, since the real estate market is relatively immune from both short and long-term price swings. Stocks, on the other hand, are subject to constantly changing prices, and investors can be placed in really tough situations when choosing whether to hold or sell their stocks.

To conclude, both assets offer long-term appreciation of value. However, if one is looking to create a strong portfolio and has the right kind of funds to invest, real estate will always be a safer and less stressful platform.

After all, the demand for homes will never cease as long as we continue populating the planet – what can be a better source of assurance for an investor?

About The Author

Kishor Pate, Chairman & Managing Director of Amit Enterprises Housing Ltd. is the driving force behind one of the most successful real estate development firms in Pune and beyond. Apart from its signature luxury homes towers and premium gated townships, AEHL has also launched highly successful affordable housing projects like Astonia Classic and Colori in Undri and the Mediterranean-style township Astonia Royale in Ambegaon.