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Are you aware of the difference between “super built-up area” and “carpet area”? Or between “fixed-rate loans” and “floating-rate loans”?… It’s possible that you don’t have complete clarity on these terms. However, if you are planning to buy a property, whether for habitation or investment, it’s necessary to learn about some commonly-used jargon for your own benefit and security. This is more so because in the fast-evolving domain of real estate, there has been immense transition and consolidation, with the industry becoming more and more professional every day. So a lot of informal or colloquial phrases have been replaced by formal, globally-benchmarked terminologies. Here are a few critical terms you should know about before doing a real estate transaction:

#Carpet area: This is the net area inside the external walls that you can use or lay a carpet on. This will exclude usable space on the terrace or balcony, but will exclude all common area spaces like elevators, stairways, lobby, etc, while including the external walls.

# Built-up area: This is the entire built-up space extending to the property’s periphery and includes the total thickness of the walls — inner and outer – carpet area and covered areas including balconies and terrace. Built-up area will again not include common areas like lobby, stairways, lifts, etc.

# Super built-up area: The super built-up area will include the entire built-up area of the property that will include corridors, lifts, staircases and other usable areas. For apartment buildings, the common areas are proportionately divided among the apartment owners.

# Rate per square-foot: For any property transaction, the price-determining unit is square foot or cottahs/bighas/acres. In the case of an apartment complex, the price of a flat is fixed on the basis of carpet, built-up or super built-up area.

# Home loan: If you want to buy a property and have a financing need, you can obtain a loan from any bank, housing finance corporations or non-banking financial institutions. Home loans are repaid in equated monthly installments (EMIs) over a period agreed upon. This could range between 5 and 30 years.

# Loan term: This is the tenure of your loan-repayment plan by way of EMIs. The EMIs are higher if the duration is short, but you benefit from considerably lower interest payout. On the flip side, a longer-term loan tenure will ensure lower EMIs, but you end up shelling out a lot of more money because of the increased interest payout.

# Interest rate: This is the rate of interest that banks charge on home loans. The rates offered are slightly lower for women borrowers, compared to those offered to male borrowers. The rates at present are hovering in the range of 6.9 to 8% per annum.

# Fixed-rate interest: If you opt to keep your interest rate fixed for the whole tenure, you are insulated against fluctuations in monetary policy. You should know though that fixed rate of interest is not actually fixed for the entire tenure. So learn more about this from your bank/FI.

# Floating-rate interest: If you choose floating rate, your interest on loan is liable to alteration with every change effected by the RBI in terms of guidance rate, called ‘repo rate’. So you could gain or lose, depending on the banking regulator’s guidance parameters.

# Loan default: If a borrower defaults on his/her EMI payment for 2 consecutive months, the bank will slap a penalty. In case of a willful default, legal action can also be initiated against the borrower and the property can be attached as well.

# Credit history: If you have a good history of repaying your credit card bills, loans and any other debts on schedule, you will have a high credit score of more than 650. This will ensure quick approval of home loans as well as lower rates. A bad history of repayment on the flip side can also result in rejection of home loan.

# Floor area ratio (FAR): FAR is the ratio of the entire built-up area and the actual plot area as sanctioned by the government. The built-up area will increase with the rise in FSI. The seller/developer has to produce the FSI before the sales deed can be finalized.

# Property appraisal: Before sanctioning a home loan, the bank usually sends out an expert team to evaluate the property so that its market value can be ascertained. Once that is established, the bank would offer a maximum of 90% of that market value as loan, notwithstanding the borrower’s personal loan eligibility.

# Freehold property: When the owner has full and unconditional rights over the land and the building that stands on it, the property is termed a “freehold property”.

# Circle rate: The government fixes a circle rate for each locality as a benchmark for transaction in that particular locality.

# Stamp duty: You must pay a portion of your property value to the government to register your property, which is called stamp duty and can vary in the range of 3 to 10%, depending on the state where you are buying your property.

# Registration charge: This is a central government levy and is usually 1% of the property value which you have to pay to complete the process of registration.

# GST: Developers have to pay goods and services tax or GST on the sale of units in under-construction projects to the government, which is then passed on to the buyer.

# Sale deed: A sale or conveyance deed is a document that is created at the time of sale of the property. Once this deed is signed and registered, it means the sale process has been completed and the buyer becomes the rightful owner of the property.

# Mutation: Property mutation is entering the ownership title in the official record books of the local municipal body. Once mutation is done, the name of the earlier owner is replaced by that of the new owner and the property tax bill is generated in the name of the new owner.

# RERA: The Real Estate (Regulation and Development) Act, 2016 or RERA was introduced to protect the interests of home-buyers and ensure greater transparency among real estate developers, in turn boosting investments in the sector.

For those aspiring home-buyers still sitting on the fence, spooked by the RBI raising repo rate by 0.40 per cent to 4.40 per cent recently, making home loans slightly costlier, the message is — the longer you wait to take the plunge, the higher will be your property cost.

Home loan interest rates are now hovering in the range of 6.9 to 7.2%, which is still affordable and most industry experts feel this is the right time to buy because even if the interest rates go up in the coming months, it will still be much lower than the historic pre-Covid highs of around 8.5%.

The past three years of the pandemic have seen a continued reduction of home loan rates, touching a mouth-watering low of 6.4% in the last quarter of FY 2021, exciting home buyers and resulting in brisk property sales over the last two years, a trend which started after the first lockdown when people had ample time to search for properties and online enquiries and sales increased exponentially.

This surge was further boosted by difficulties in finding rented accommodation, the spread of the pandemic and care issues. The developers also contributed to the buoyancy by offering lucrative discounts and innovative ownership schemes. All these factors combined to catalyze a boom in real estate transactions.

While interest rates have now started moving up due to high inflation and excess liquidity in the market, the government has also stepped in to curb inflation by raising rates. However, the raging war in Ukraine and the increasing geopolitical conflict will play a crucial role in determining market dynamics since the Indian economy is largely dependent on oil import bills and we are facing an oil-related inflation. Under the circumstances, the government can play its bit by extending home ownership schemes to sustain the demand, particularly among the LIG/MIG segment.

The RBI’s move to increase repo rates translates into higher home loan cost for buyers, for sure. For instance, if your borrowing is INR 50 lakh, your EMI will increase by around INR 1200 at the existing rate of say 6.7% for a tenure of 20 years. The corresponding hike in EMI would be in the region of INR 1800 for a 75 lakh loan.

So how do I manage my EMIs now?
For existing borrowers, there are two options. One can either increase the tenure of home loan repayment and keep the EMI amount same, or you can part-prepay your loan to whittle down the monthly installment amount. Most borrowers tend to stretch the tenure of loan repayment to keep the EMI constant, which means you will need longer to repay your entire loan. However, the most viable alternative is to prepay the loan to the extent possible and reduce the tenure. This can lead to substantial savings in the final analysis.

Given the innate energy and dynamism in today’s real estate market, Pioneer Property doesn’t believe there will be any significant hike in home loan interest rates by commercial banks this year, perhaps in the region of 0.6 to one per cent. So the property market is still a very safe bet to park your savings, since this uptick in the real estate scene is only expected to gather further momentum, with prices set to jump in all the segments. So the value of your property will keep appreciating.

With rebates in stamp duty and registration fees still on, and a whole basket of options to choose from in every segment, it is unlikely that the marginal rise in the cost of home loans till now will have a massive bearing on the market in the short to medium term.

NRIs or non-resident Indians have always played a critical part in the real estate market in India, whether they buy properties as investment or driven by the emotional connect with near and dear ones back home. Either way, the NRI property-buying trend has seen significant propulsion of late, buoyed by the dwindling rupee, there has been a significant increase in the total transactions carried out across the country over the past 16 months, according to surveys by Pioneer Property.

Given the complexities of regulations in this segment, it’s important to keep in mind certain points if you are an NRI on the cusp of taking the plunge in the Indian realty market.

Here, we list a few such points which could serve as a ready reckoner:

# Nature of the property: As an NRI, you are permitted to buy any immovable property in India, with the exception of agricultural land, plantation property or farmhouse. For the latter kind of properties, you will require permission from the RBI and the Union government.

# Tax benefits: As an NRI, you enjoy certain tax benefits while transacting in property in India. Suppose you sell off a property within 3 years of its purchase, the deal will come under the dragnet of short-term capital gains tax, which is to the tune of 30.9%. However, if you wait and sell the same property after 3 years, it will be considered long-term capital gain (around 20.6%) and you can invest the sale proceeds in another property.

# Mode of transaction: As an NRI, you cannot pay for a property in India in foreign currency. You must pay in Indian currency only and for that, you first need to open an NRE (non-resident rupee) or NRO (non-resident ordinary rupee) account in any Indian bank or an FCNR (foreign currency non-resident) deposit account that will safeguard you against fluctuations in forex rates. NRIs can also apply for home loans if required. However, the repayment has to be made in Indian currency only, from any of the above-mentioned account types.

# Home loan: All Indian banks and housing finance companies registered with the National Housing Bank are empowered by RBI to disburse loans to NRIs for purchase of residential real estate in India. As mentioned in the earlier sub-head, the loan amount will be sanctioned and has to be repaid in the same currency. The only catch is that the loan amount, instead of being directly credited into the NRI’s bank account, will be disbursed to the developer’s or the seller’s account. The loan can be repaid by the NRI using his/her NRO/NRE account or FCNR deposits.

# Power of attorney: Any NRI has the privilege to give PoA to friends or relatives residing in India to complete the transaction process regarding purchase of a property in India on his/her behalf. The PoA can apply to umbrella access or specific rights that can be exercised by the NRI’s representative.

# Verifications: Before settling on a property for purchase, as an NRI, you should do a meticulous due diligence exercise on the developer’s track record, talk to residents already staying there (in case of a gated community) and look at all your available options in your preferred location, before you zero in on your choice.

# EMIs and Forex: While it is easy to repay loans through EMIs, you could be hit hard by fluctuations in foreign exchange rates. If you can use the rental income for payment, it offers a critical and convenient safety valve against forex market uncertainties.

# Repatriation of funds: For repatriation of funds to the foreign country, you will have to adhere to certain guidelines set for NRIs. A person of Indian origin (POI) or an NRI is entitled to repatriate the entire proceedings from the start of the process of sale of a property. However, the property purchase in India has to be done following FEMA (Foreign Exchange Management Act) directives applicable at the time of purchase and the repatriated amount cannot exceed the original amount as submitted.

As an NRI, if you factor in all these points and with the added insurance of RERA and also GST, there are ample in-built checks and balances in the Indian real estate market now to give you comfort and peace of mind while investing. With the general outlook in the realty domain looking very bright in the post-pandemic scenario, the NRI segment’s share of this burgeoning pie is sure to grow consistently, market watchers concur.

The Real Estate Regulations Act or RERA was introduced by the Centre in 2016 to safeguard the interests of home-buyers by protecting them against the malpractices of certain dishonest developers which had once eroded consumer confidence and given a bad name to the entire industry.

Some of the primary objectives of the Act are:

# Safeguarding interests of allottees and ensuring their responsibility

# Ensuring all-round transparency and thus, minimizing chances of fraud

# Rolling out a countrywide uniformity of standards and foster better professionalism

# Ensuring transparency of communication between developer and buyer

# Making the developers and investors assume greater responsibility

# Boosting confidence among buyers in the real estate sector as a whole through built-in checks and balances

What about West Bengal?

While all the other states had adopted RERA from the word go, West Bengal was the only state which enacted its own version of the regulation, terming it the West Bengal Housing Industry Regulation Act or WBHIRA. However, later, it has agreed to implement the central registration in the state with a couple of riders – one, to protect the builder against “any unforeseen circumstances” preventing him from fulfilling the contract like “war, drought, flood, fire, cyclone, earthquake, etc and two, a garage is defined by any parking space sanctioned by the government without the compulsion to provide a roof and three walls as mandated by RERA.

What are the main benefits of RERA for the consumer?

# Standardized definition of carpet area: Earlier, there was no uniform guidelines for measuring carpet area, and home-buyers often felt shortchanged. Now, for the consumer’s peace of mind, the standardized definition of carpet area is “the usable floor area of an apartment, excluding the area covered by the external walls, areas under services shafts, exclusive balcony or verandah area and exclusive open terrace area, but includes the area covered by the internal partition walls of the apartment”. This has made it impossible for developers to mislead buyers, thus inspiring confidence.

# Interest rate on default: RERA has ensured parity of interest rates for both seller and buyer in case there is delay in delivery of a property by the former or a payment default by the latter. Earlier the scenario was lopsided and loaded in favour of the developers since they paid less rate of interest in case of delay in giving possession, while the buyer was subjected to a higher penalty in case of any payment default. Now, the rate of interest payable by both parties must be the same and is determined by prime lending rates of SBI plus 2%.

# Protection against builder bankruptcy: Earlier, developers often used to divert funds raised from customers of a certain project to finance other developments. RERA mandates that the builder has to deposit 70% of the amount realized for a particular project in a separate escrow account and can withdraw money from this account in phases of construction which are completed and certified by a civil engineer, an architect and a practising chartered accountant. This is also designed to ensure timely completion of the project.

# Protection against false promises: The interest of the buyer is now protected by this legislation since she/he reserves the right to withdraw from the project and is entitled to a full refund of any advance payment in case of any inconsistency regarding commitments made by the builder and the actual project delivered.

# Cap on advance payment: According to the provisions of RERA, the developer cannot seek an advance payment or application fees of over 10% of the cost of the property before execution of the agreement for sale.

# Protection against defects: The buyer now has the peace of mind while buying a RERA-certified property, stemming from the assurance that any structural defect or defect in terms of quality, workmanship, provision or service, detected and reported within 5 years of getting possession of the property, will have to be fixed by the developer free of cost within a month.

# Insured against delay: In case the developer fails to complete and deliver the project on time, the buyer can either pull out of the project with full refund along with interest payable from the completion due date till the refund of the amount, or stay with the project till completion and seek compensation along with interest accrued from the due date till actual date of completion.

# Protection against defect in title: In case you stumble upon any defect in the title of the property you purchased, you are entitled to compensation from the developer, and there’s no time limit for seeking this compensation.

# Grievance redressal: The buyer has the leeway to take up any grievance with the state authority formed under the auspices of RERA, which is vested with the power to redress any such grievance. In case the buyer wants to escalate the issue, it is possible to take the grievance to the appellate tribunal which is mandated to redress the grievance within 2 months. If it can’t resolve the issues, it is supposed to record the reasons for the failure.

# RERA registration a must: Every single project which has a carpet area of over 500 sq m or a minimum of eight units, will need to have RERA registration before it can be marketed. To obtain such registration, the developer must comply with all the mandatory guidelines set in the legislation.

The decision to buy a house or an apartment is one of the most significant ones that we make during our life’s journey, and it evokes a maelstrom of emotions from elation to excitement to trepidation and anxiety and of course anticipation. For most people, this is the single largest investment they would make in their lifetime. So there’s an inevitable adrenaline rush, and it’s quite possible that in this blur of excitement and anticipation, you could forget to factor in the extra expenditure that comes as a corollary to buying a property. So here is a handy checklist of extra cost heads for your ready reference:

# Stamp duty: This is a mandatory levy payable to the state government on any property transaction. Stamp duty validates the sale agreement and is the official document of transaction that makes the property legally yours. The rate of stamp duty on property transactions varies from state to state in a band of 4 to 7% of the property value. So if your property value is around 50 lakhs, you will need to fork out another 2 to 3.5 lakhs as stamp duty.

# Registration fee: In addition to stamp duty, the government levies a 1% registration fee for registering the property in the buyer’s name. So you pay Rs 50,000 if your property cost is 50 lakhs.

# GST: In case you are purchasing an under-construction property, you will have to pay a goods and services tax, which varies according to the property price bracket. If your property falls within the affordable housing segment, priced below Rs. 45 lakhs and less than 60 square meters in metros and 90 square meters in non-metro locations, you will have to pay only 1% as GST. If not, the levy shoots up to 5% for residential properties. For commercial spaces, the GST is 12% on outright sale.

# Electricity charges: The developer charges the buyer for creating the infrastructure for external electrification for the entire complex as well as to bring power to your apartment. As a buyer, you will also have to pay for the meter installed and to the power distribution utility an amount towards application charges.

# Legal charges: A developer will charge the buyer legal fees for executing the sale agreement and the final conveyance deemed between the two parties. It’s a fixed one-time cost payable at the time of purchasing the property.

# Power back-up charges: The developer will charge fees to arrange for diesel generator backup in case of any power outage. The amount is charged either by KVA or is a fixed lumpsum amount.

# Preferential location charges: Sometimes developers slap an extra charge on any apartment or unit within the same gated complex for its better situation, which could be a lake-view or lawn view, or south-facing, or a showpiece villa with a porch and garden, a top-floor penthouse or any such “plus” that differentiates or enhances the value of that unit. This charge is not fixed by any parameters but guided more by the brand’s currency in the market.

# Floor escalation charges: For any high-rise property, there is an escalation of per sq ft charges as you go up higher. This is usually determined by the strength of the location or the brand equity of the developer, and is charged on per-sq ft, per-floor basis.

# Parking fees: Your parking space doesn’t come free in any housing complex. The developer will charge a one-time amount for your slot or collect periodic parking fees. If you have a second vehicle, you will need to buy or lease a second parking slot and so forth.

# Deposits:
a) Maintenance deposit: Developers usually collect an advance maintenance deposit of 1 to 2 years to take care of the upkeep of common areas like parks, elevators and stairways, electricity, security and housekeeping, etc. This is an insurance deposit to safeguard against possible damages. The charges go up according to the number of amenities provided. For instance, if the housing society has a club and its usage is included in common area maintenance (CAM) charges, the deposit amount is likely to increase.

b) Sinking fund: The developer charges a one-time amount as fixed deposit from every consumer in a project as a sinking fund which is kept aside for major unforeseen expenses in building repairs, fire, or other accidents/structural damage from natural calamities.

c) Municipal deposits: This is an advance charge levied by the developer to take care of property taxes, which are usually charged on per sq ft basis, till the mutation of the respective units is completed.

Identifying your dream home and making the dream come true is fraught with potential pitfalls and demands an intensive due-diligence exercise at your end. It’s a whole detailed process to ensure a seamless transaction and the raft of tasks would comprise fixing a budget, identifying a location, seeking out a reliable real estate developer or agent, negotiating the price, organizing and scrutinizing all the necessary documentation, picking an apt home insurance, and other things. Here is an overarching checklist that might be of help:

# Location: This is the only thing you can’t change once you have purchased a property. So choose your location carefully and after a detailed assessment of the area. Accessibility should be your primary concern before finalizing a home. You must take into consideration commute time to work, whether there are enough market and other retail options at arm’s length, schools and other educational institutions, medical facilities, etc. Most importantly, talk to local residents to get a clearer picture of the safety and ease of living in the locality.

# Check the title documents: You should be looking out for documents like government grant order, sale deed, succession certificate, nature of the title (leasehold, freehold or development right), development agreement and power of attorney, information on pending litigation, if any, and having access to original title documents, stamped and registered.

# Verify seller’s identity: Specifically look for documents to establish the seller’s identity and credibility, like PAN, Aadhaar, passport, IT returns, salary certificates, etc if an individual seller. In case of a jointly held property, the identification of all the sellers is required. If the seller is a company or partnership entity or trust, the constitution documents will be required to make sure it has the right to own and transfer the property.

# Land-use and conversion: As a buyer, you need to scrutinize the master plan to confirm that the property has been developed as per the zoning plan like residential, commercial, industrial, etc. If there is any change of land use, the required permission from the appropriate town planning authorities is a must.

# Approvals for construction: As someone buying an apartment or land with some construction, you need to study the building or layout plan which was sanctioned by the local civic body, besides other government approvals and those issued by statutory and regulatory authorities pertaining to power, water, sewage, fire safety, green clearance, etc.

# Certificate of occupancy: As a buyer of a property, you must insist on the occupancy certificate from the competent authority before taking possession. This document is absolutely critical since without being in possession of the occupancy certificate, you are liable to action and penalty under building bye-laws, and even the risk of demolition.

# Property tax status: You must also ensure that the seller has cleared all property tax payments till date and there’s nothing pending. This you can verify with the municipal authorities. Unpaid property tax or utility bills erode the marketability of the property. So make sure you obtain all the relevant documents before taking possession.

Encumbrances: It’s absolutely imperative to verify with appropriate authorities if the property you are buying is free of all burden or encumbrances. This can be done at the jurisdictional sub-registrar office or with the ministry of corporate affairs, if you are buying from a corporate entity. This is an important safety valve and you must plug it before completing the transaction.

# Physical survey: You must conduct a physical survey of the property to confirm all the physical parameters and measurements professed. You can also take the help of a professional surveyor for this.

# Compliance under RERA: The Real Estate (Regulation and Development) Act, 2016 or RERA makes it mandatory for all developers to register their properties under this Act. As a buyer, you can visit the RERA portal to check if the property is registered under the Act and if there are any cases or complaints pending against the developer. This will enable you to check on the credibility of the developer and then take an educated decision. Here, it’s important to know that all real estate agents too must also get registered with the state arm of RERA. Once you have the comfort of the RERA umbrella, you are a lot more reassured.

# Check for outstanding documents: In case you are buying a second-hand property, it’s extremely crucial to check on the loan status. In case of any outstanding loan amount, make sure the seller clears all dues before handing over the property, or else you must get hold of the original property documents from the bank before you get the property registered in your name so that you can pay off the balance amount without complications. If the seller is clearing the home loan dues, make sure to obtain a “no dues certificate” before completing the transaction.

# Assess the property price: You must do a proper research and market analysis to figure out price trends in the area. Talk to a reputed and qualified agent to understand the history of market ups and downs in the area so that you can confirm that your property will appreciate. You can also calculate potential return on investment in future, based on educated inputs.

Affordable housing comprises dwelling units which are affordable to those earning wages below the average household income or the median income as quantified by the national or state government or any other appropriate housing affordability index. In our country, affordable housing stocks are set aside for low-income, middle-income and economically weaker sections with extremely low income levels.

The concept of affordable housing is absolutely critical for developing countries like India where buying a house remains a pipe dream for most people who struggle every day simply to make ends meet and can’t think of acquiring their own property at prevailing market prices. Affordable housing policies should be differently oriented to cater to urban and rural areas, considering that the main constraint in urban areas is land.

The government’s role.
While determining affordability, one of the critical factors considered is disposable income, which squarely shifts the onus of providing affordable housing to those who need it, to the government, given our average per capita income. The silver lining is that the Central government has woken up to this burning need and has taken several measures to boost the stocks of affordable dwelling units across the country, including taking private real estate developers on board and working out PPP models.

The Affordable Housing Scheme was rolled out in June 2015, which makes affordable housing units eligible for substantially lower GST, thus lessening the burden on the buyer considerably. The parameters for qualifying as an affordable housing unit in metro cities like Delhi NCR, Mumbai, Kolkata, Bengaluru, Chennai, Hyderabad, etc are a price of or below INR 45 lakh and carpet area of or less than 60 sq m. In non-metro cities, the ceilings are INR 45 lakh and 90 sq m, respectively.

The growing economy in India has triggered a higher demand for better housing facilities, leading to a mismatch between demand and supply of dwelling units, more so in the affordable segment. A report by the Technical Group on Estimation of Urban Housing Shortage in 2012 highlighted the massive demand-supply chasm in both urban and rural segments. The report pegged the contribution of the two low-income categories – the EWS and LIG – to the total housing shortage at a whopping 96%.
Given the rapid pace of urbanization, Pioneer Property Management estimates that more than 40% of India’s population will live in cities by the end of this decade.

The Planning Commission calculates affordable housing needs by putting together:
# Number of households over existing housing stock
# Number of families residing in “unacceptable” dwelling units
# Families living in “unacceptable social conditions” due to congestion
# Number of homeless families

Government initiatives for affordable housing:
The government has introduced a clutch of measures to address the needs of affordable housing, including:
# National Urban Housing and Habitat Policy (NUHHP), 2007
# Pradhan Mantri Awas Yojana or PMAY (Urban), 2015
# Pradhan Mantri Awas Yojana or PMAY (Rural), 2016
# GST on affordable housing whittled down from 8% to 1%
# To combat the impact of Covid-related reverse migration, the Affordable Rental Housing Complex (ARHC) was created under PMAY (U) to provide rental housing at affordable rates at work sites

Sops for real estate developers:
A number of steps have been taken to encourage private developers to enter the affordable housing segment, like
# Subsidies, tax benefits and institutional funding
# Creation of a dedicated Affordable Housing Fund (AHF) in the National Housing Bank
# Exemption of IT levy on notional rent on a second self-occupied house
# TDS threshold on rent increased to INR 2,40,000

What has been the impact of affordable housing on our economy?
# Employment generated for over 6 crore workers across several sectors, upstream and downstream
# Massive boost for steel and cement industries
# Demand surge across ancillary sectors including furniture, transport, iron & steel, electrical, paints, plumbing equipment, etc

The use of technology to speed up building construction has been in vogue for quite some time. However, Covid-19 has hugely accelerated application of latest technology and innovations or ‘contech’ as developers scamper to mitigate the impact of the pandemic. A big trigger towards this sharp tilt towards new tech is the need to cut the delay and deliver projects hitherto frozen by the pandemic.

Hence, virtual walkthroughs, digitalization, 3D printing, artificial intelligence, drone tech and the like have become the construction industry buzzwords of late. Covid had left a raging scar and throttled real estate construction severely. By turning to new tech, developers are able to optimize workforce efficiency, improve quality while speeding up construction with a reduced carbon footprint, even as the real estate industry tries desperately to stay on course to touch the magical $1 trillion figure by 2030.

HERE ARE SOME OF THE NEW TECHNOLOGIES IN CURRENCY NOW:
Digitalization
Digitalization is fast becoming basic hygiene, with both developers and home-seekers able to access a vast ocean of information online. From virtual or video tours of properties to online transactions, the digital platform is offering buyers and sellers a host of handy options, including analyzing new data and digitizing old ones so that anyone can view it in real time.

Aluminium foamwork construction technology
Also referred to as aluminium shuttering, this technology has transformed the real estate construction sector. Using aluminum instead of wood as the mould where the concrete is poured, this technology is swift, cost-effective and very apt for repetitive applications, particularly in large-format residential projects. As against the conventional method, which would take 3 weeks to achieve a slab cycle, using aluminium technology can get that work done in 8 days flat.

Virtual reality & 3D mapping
This expertise which uses computer simulation and drone technology, can create life-like digital walkthrough experiences for the prospective customers so that they can visit and evaluate properties online, sitting at home. Merging images and videos of the project by using 3D mapping technology, it creates a digital space that is as real as the actual property. This is also a real boon for investors who can preview the entire architectural layout of a property and make an informed decision before they reach out for their cheque books.

Prefabricated construction
Constructing components offsite was fast becoming a trend even before Covid struck. Post-pandemic, this trend has only become more pronounced. This process is not only swifter, it guarantees better and uniform quality and is more stable and sturdier vis-à-vis conventional on-site construction. Besides, prefab can be done in large factories, thus ensuring better social distancing and use of precision equipment and components to achieve a better result and cut labour costs.

Building information modeling
BIM is the new buzzword in Contech, providing developers and investors a bird’s-eye-view of the project through the use of 3D computer-generated models of the structure, to which the estimated cost and timelines are added to get the entire picture. So the architecture team can actually delineate with a great degree of accuracy the actual image of the project as it will look after completion.

Building management systems
BMS has become a very critical tool particularly post-pandemic, as data scientists work 24×7 to cull out information from sources like building management systems, swipe cards, feedback of the occupiers, etc so that they can ensure optimization of space and more sustainable and healthier models of commercial real estate, keeping in mind the now-omnipresent needs of touch-less technology and sensors to monitor pollution, programmed cleaning modules, etc.

Artificial intelligence
Artificial intelligence or AI, like in so many other domains in our lives, is now much sought-after by the construction sector as well. Now widely practiced among the developers’ fraternity, AI models can help determine critically important factors like project-completion timelines, probable budgets, risk factors, etc, which is a huge aid for the builders’ community, arming them with the most relevant information they need. Automated construction or drones flown via remote control are all examples of AI.

3D printing
Just like prefab casting, 3D printed materials, which are already a craze in the developed countries, are soon going to be used a lot in the Indian construction sector, particularly where precision finishing is critical. This tech is a massive boon in terms of timeline management and fast replication.

The pandemic has taken a heavy toll on the commercial real estate sector in general over the past 2 years. However, one sole segment, the warehousing market, has not only held its own, but seen burgeoning demand, powered by the e-commerce sector and third-party logistics growth.

In fact, recent data from Pioneer Property shows that annual warehousing transactions across eight major cities in India (Mumbai, Delhi NCR, Bengaluru, Pune, Kolkata, Hyderabad, Chennai and Ahmedabad) are expected to grow at a CAGR of 21% to 78 million sq ft over the next five years. Market watchers predict speed and technology will be key for occupiers, even as e-commerce is set to drive growth in this segment, jacking up its contribution to the cumulative warehousing transactions to 36% in the financial year 2022-23 from 31% in FY 2020-21.

Riding this crest, investors have come flocking in since last year. In the second quarter of last year itself, the Indian warehousing segment has seen an injection of Rs 5,500 crore from investors. Major players like Blackstone have bet big on this segment, pumping in $700 million into a deal with Embassy Industrial Parks. Landmark Capital has also launched its Landmark Warehousing and Logistics Fund, with a target corpus of Rs 500-crore scope. Earlier, Welspun One Logistics Park had introduced another Rs 500-crore alternative investment fund (a privately pooled investment vehicle).

Clearly such blue-chip funds like Landmark and Blackstone have pinned their faith on the Indian warehousing segment to grow big-time, thus infusing a welcome buoyancy in the market. The industry is confident that many more such big-ticket investments are in the pipeline, with Welspun alone hoping to pump in upwards of Rs 2000 crore to create a ballpark leasable area of 7-8 million sq ft by 2025 in high-growth markets like Mumbai, Pune, Bangalore, NCR, Chennai, Kolkata, Lucknow, etc.

Underlining this fresh energy, the Indian warehousing market is slated to grow at 35-40% annually, according to a PwC report. Still, the market, which is highly fragmented, has miles to go before it can close the gap with mature markets like the US, the UK and China. So this new-found confidence shown in Indian warehousing by big investment firms is the propulsion this sector needs to really take off and be counted in the global scenario.

This exponential growth is largely driven by e-commerce and online shopping, which has gained rapid currency during the pandemic, fueling the demand for better supply-chain logistics and storage space. Technology and automation will play a game-changing role in this impending boom, managing every aspect, from inventory management to safety and security to processing orders – the entire warehousing business ecosystem.

A Praxis Global Alliance study predicts e-commerce and retail to catalyze even more propulsive growth in Grade A and Grade B warehouses across India in the period leading up to FY 25, with Tier 2 and 3 cities like Coimbatore, Guwahati, Bhubaneswar, Patna, Ludhiana, Surat, etc also contributing to the momentum, riding on the e-commerce and third-party logistics waves. We expect leasing activities to reach new highs, with warehouse leasing set to break the 120 million sq ft barrier in the next three years.

India’s realty sector is on the cusp of a turnaround, according to market experts. The real estate sector, particularly the residential segment, is already showing signs of “healthy growth” in 2022, according to reports. This buoyancy is vindicated by another report, which says supply in the residential segment jumped 27% between January and September, 2021 when compared to the entire 2020 supply.

This new-found traction has pushed up sales by 5 to 7% and many market watchers feel that new supply and sales quantum could reach pre-pandemic levels this year, marked as the bounce-back year. While interest rates are slated to rise in the second half of the year, prices could go up even further, given the new impetus in the market.

So what are the emerging trends?
The market momentum has surely been driven by cheaper home loans and demand for bigger apartments with a clutch of built-in amenities in gated communities. Much of this new demand is fueled by the WFH (work from home) culture. Young professionals want more space with a touch of sophistication and all the creature comforts they can get to maintain a lifestyle many of them have got used to. An extra room has thus become routine customer preference. Also, the pandemic has taught us the value of community-driven living and the need for safety and peace of mind.

The trend was visible in 2021 itself when there was decent demand in the mid segment (apartments priced between Rs 40 and 80 lakh) and premium units (priced at Rs 80 lakh to 1.5 cr). A consumer survey study has revealed a distinct buyer tilt towards properties north of Rs. 90 lakhs. This uptrend is only expected to get more prominent this year, with a 5% capital value growth” for residential properties projected in calendar 2022.

Increased FDI flow and the comfort and reassurance guaranteed by the RERA have been key contributors to the growth, boosting NRI investments as well. We have also seen the emergence of online buying and selling of homes as a preferred mode in this period, prodding the real estate sector to be agile and adapt to digitization and innovation swiftly. Social media marketing is playing a major role in influencing decision-making, more so among young professionals in the IT/ITeS sector where many companies are on a hiring spree.

Another noteworthy trend emerging is the exponential growth in the demand for warehousing space, as the e-commerce segment continues to scale new heights with game-changing innovations. This sector is projected to grow at a CAGR of 20% in the financial year ’22-’23, with e-commerce contributing a whopping 36% to the total warehousing transaction business. Speed and new tech will play a crucial growth in this warehousing boom.

The pandemic has also underlined the need for flexi workplaces, which could still be a future asset segment. As employers continue to re-strategize workplace dynamics, quite a few co-working players are in the fray, building up inventory, for which they expect takers galore. However, a lot depends on which course the virus takes, going forward, even as we are on the threshold of endemicity, doctors opine. However, Covid has thrown several curve balls at us as soon as we have let our guard down. So perhaps, this is a wait-and-watch segment and the jury is still out.