Category: News

15 Jul 2017

Coming 6 months for Real Estate in Mumbai – Mr. Nayan A. Shah

The Future of Real Estate in Mumbai.

If we introspect the last year and beyond, here’s a detailed list of all the events that have taken place:

  1. There has been a slow down in the economy, hence slowing down the Real Estate industry as well.
  2. Demonetization hit the economy on the 8th of November, 2016, thereby substantially affecting everybody’s liquidity. This move affected the Real Estate industry as well.
  3. RERA has ensured that the real estate developers are likely to take at least 6 months to put their business in order.
  4. Stay of the Mumbai High Court on the new construction (Dumping Ground Order) has delayed hundreds of projects from their commencement date.
  5. A number of new policies were announced by MCGM and the Urban Development Department for which quite a few projects had to go back to the drawing board or had to be delayed or stopped.
  6. A number of projects are waiting to commence because the DCR/DP 2034 has yet to be sanctioned. Hence, people are in wait and watch mode.
  7. For rest of the MMR, the Common DC Rules are also being finalized. Hence, the developers have kept their projects on hold due to the sanction of Common DCR 2017.
  8. In the last three years, due to the dramatic rise in the cost of approvals, a situation has come where the cost of production of a home has increased dramatically.
  9. There is no way a real estate developer can reduce the prices any further. In fact, in the last 4 to 5 years, there has been no increase in price. This means that the prices has come down by 30% or even more.
  10. GST has also got the developer calculating its impact. The developers will take time to be GST ready.
  11. Actual GST is 18% on Real Estate. However, there is an abetment of 33% towards land cost. Hence, the net effect is 12%. Some experts say that GST could even be 18% and no abetment of land would be permitted.
  12. New launches are 38% of what they were in the year 2015. Whatever was announced was for the Affordable Housing segment; there has hardly been any project that has been launched in the Mid Luxury Segment.
  13. There is an overall drop of 62% in the launch of new projects.
  14. So, we have a situation where there are hardly any under construction projects, especially in the Mid Luxury segment (flats costing 1.5cr and above) and there are hardly any ready to move in flats in the Mid Luxury segment.
  15. As a result of this, in the coming 6 months or in the very near future, there will be a premium for ready to move in homes due to two reasons. Firstly, there will be a shortage in Supply and an increase in Demand. Secondly, due to the fact that Ready to move in homes with OC are GST FREE, you will be able to save 12% of your capital.
  16. There is no way a developer can reduce any price of it because the price at which he is selling is now the Marginal Cost.
  17. There is a big gap between demand and supply. So, it will be a repeat of the situation in the year 2008-2009.
  18. There are three kinds of buyers;
    1. People who have to invest capital gain.
    2. People who have to buy a home because of the expanding family.
    3. People who have the liquidity and may need the home 2 or 3 years from now.

All these categories are one way or the other postponing the purchase because of the feeling that the rates will come down. The moment they realize the shortage, they will run to buy whatever is available.

To Summaries;

  1. Demonetization
  2. RERA
  3. GST
  4. Rise in the cost of approvals
  5. Slow-down in the economy: Slow-down in Real Estate.
  6. 62% drop in new launches, hardly any new launch in the Mid Luxury Segment (1.5cr and above)
  7. Hence, very few under construction projects available and hardly any ready to move in flats with OC are available.
  8. Developers are not launching new projects due to the pressure of RERA, GST, Demonetization and Liquidity; they are also waiting for the DCR/DP 2034 and Common DCR to be sanctioned.
  9. They are waiting for the stay to be relaxed (Dumping Ground Order).
  10. As a result of all of the above, there is a significant drop in supply.
  11. 9 meter road width policy and other MOEF and UDD notifications have resulted in some of the projects getting delayed or stopped or got back to the drawing board to be re-planned and re-approved.
  12. Over the last 4 years, a substantial portion of people have postponed the demand. Hence, there is a huge pent up demand and hardly any supply.
  13. I see prices of flats in real estate to rise in the coming six months or even before that, especially the prices of ready to move in flats which are in the Mid Luxury segment.
  14. Even in the Affordable Housing category, the projects that are rightly priced for the right location at the right size and at the right ticket price are also likely to see an appreciation.
14 Jul 2017
Impact of GST on underconstruction homes and ready-to-move-in properties

Impact of GST on underconstruction homes and ready-to-move-in properties

After RERA Act, it is the GST that promises to standardize the real estate sector. At present a home buyer has to several indirect taxes to buy a home like excise duty, value-added tax and service tax. All this amounts to 11% and does not include stamp duty.

With GST, all these taxes have been subsumed and the buyer will now have to pay 12% tax for purchase of any property, excluding stamp duty. However this only stands true for underconstruction properties and not on completed ready-to-move-in apartments homes. While the entire input credit — excise duty and Central sales tax on construction materials that are paid by developers — will also be allowed unlike earlier.

The government made a statement, “The builders are expected to pass on the benefits of lower tax burden under the GST regime to the buyers of property by way of reduced prices/installments … It is advised to all builders/construction companies that in the flats under construction, they should not ask customers to pay a higher tax rate on installments to be received after imposition of GST.”  

According to E&Y report from 2015, the real estate sector accounts for 5% India’s GDP, making it the second largest employer in India. However the industry faces many issues like macro-economy conditions and fiscal policies. One such challenge was the multiple indirect taxes levied by each state such as VAT, Stamp duty, Service tax, registration fees and so on.

GST simplifies tax compliance and eliminates the chances of double taxation. Thus giving home buyers a candid reason to cheer up even though the standard GST tax rate is slightly higher. Since with GST it is expected that cost of projects will fall for developers, it would mean cheaper homes for consumers too. For builders the actual tax effect will lower due to the input tax credit on raw materials than the present taxes.

Builders at present are scaring customers of the price hike since they can’t claim any tax credit for taxes paid before July 1. The amount of tax that a property buyer will have to bear depends on his property. If you are moving in a ready home or if your under construction property is almost ready and have paid 90 to 95% price, you will have to pay flat 12% tax on the remaining amount. However if you have just bought an under-construction unit that costs 1 crore and just paid 20 lakhs of it then the remaining 80 lakhs will invite 12% GST tax.

Hence given the current scenario it makes perfect sense to invest in a ready-to-move RERA compliant home which is 12% GST free and you can save up to 39 lakhs with Mayfair Housing

12 Apr 2017

Mayfair Goregoan Sports club Spirit of Sport 10.0

In the kind of generation that we live in, the world develops and upgrades itself at a pace like never before. With the pace of development increasing on a daily basis, it is only natural that we as humans would want to keep up with the coming times. That’s why you will always see someone or the other running around the city. It could be some urgent work, or maybe someone has to head for a last minute plan. However, we decided to give our customers a different reason to run for.

mf sport club spirit of sport 5
mf sport club spirit of sport 4

In association with the Goregaon Sports Club, Mayfair Housing organized the Spirit of Sport Run on the 19 th of March, 2017. The race flagged off from the club itself where the participants were treated to beautiful landscapes throughout the run. Once the race was finished, the participants partook of the Zumba activity where dance and fitness combined took the audience to new heights. Towards the end of the day, the hospitality shown by the Goregaon Sports Club ensured that everyone left as a proud winner.

mf sport club spirit of sport 1
mf sport club spirit of sport 6

Mayfair Housing made the decision to organise this sporting activity as a way to promote fitness and good health. With all the daily hassles that an individual goes through, we understand how stressful one’s life can get. Hence, we decided to give our customers a break and bring to light the most important aspect of their lives, i.e. their well-being. As we put out a call for the initiative, people from all walks of life came in and joined us. To show their support and dedication, a visually impaired man and two physically special men turned up for the run, i.e. Mr. Amarjit Singh, Mr. Manish Grover and Mr. Darshan Dhakan. Motivated by their dedication and strong will, they were able to prove that the physical limitations on them could not hold them back from fulfilling their dreams. Along with that, Mr. Raj Vadgama participated for the Spirit of Sport run as well, acting as a trainer for many who participated in the race. His notable achievements won the respect of many, seeing as how he completed 10,000 kms in 120 days across various cities in India. At Mayfair Housing, we believe in helping everyone we can in achieving the goals they set for themselves.

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mf sports club spirit of sport
02 Feb 2017
rera estate law


  • The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry.
  • The bill was passed by the Rajya Sabha on 10th March, 2016
  • By the Lok Sabha on 15 March 2016.
  • The Act came into force from 1 May 2016 with 69 of 92 sections notified.
  • The Central and state governments are liable to notify the Rules under the Act within a statutory period of six months.
  • Applicable to whole of India except Jammu and Kashmir
  • Real estate regulatory authority (RERA) is the governing authority.
  • The law is not Retrospective.
  • No property can be sold or promoted unless they are registered under the RERA Act. Failure to register the property can lead to the builder facing a 10% penalty or up to three years in prison.

Purpose of RERA

  • An Act to establish the Real Estate Regulatory Authority for regulation and promotion of the Real Estate sector.
  • To ensure transparency in projects.
  • To protect the interest of consumers in the Real Estate Sector and to establish an adjudicating mechanism for speedy dispute redressal.
  • To provide proper information about the Builder.

Silent Features

  • Real Estate Regulatory Authorities (RERA) will be set up in every state.
  • The regulations apply to both residential and commercial properties.
  • A real estate project needs to be mandatorily registered with state real estate authority before it is offered for sale.
  • Developers cannot sell the project unless the project is registered with RERA
  • Sale of property will be on carpet area.
02 Feb 2017

Real Estate Market In Mumbai

Real estate market changing decade to decade
Period between 1950 and 1960

  • Rural urban migration was key driving factor

Period between 1961 and 1970

  • Rural urban Migration was key driving factor
  • Rapid industrialization owing to ‘licence raj’
  • Highly regulated development
  • Low profile development

Period between 1971 and 1980

  • High demand for Chawls for industrial employees and labour
  • Parallel increase in slums in urban centres
  • Highly inflexible Development plan
  • Highly restrictive Development control regulations
  • Policy of decongestion – inhibiting development
  • Lack of funds with municipal bodies

Period between 1981 and 1990

  • Industrial growth resulting in demand for rental premises
  • Urban center/ industrial center development
  • Proliferation of slums

Period between 1990 and 2000

  • Opening up of economy
  • Rationalization of interest
  • Real estate boom
  • Relaxation in laws
  • Incentives for development
  • Infrastructure development

Changing Paradigm
The paradigm relating to the real estate industry is changing with the opening up of the economy and stabilization of the supply. The role of the government is shifting from the regulator to a facilitator. The policies and regulations are becoming more development friendly and giving way for high density development. The supply demand scenario is stabilizing and the market is consolidating in the wake of emergence of many players. The perspective of the developer is changing. The consumer is becoming more and more aware of the rights and is demanding befitting quality for the pennies spend.

Some of the salient features of this paradigm are:

  1. Supply base to demand base market
  2. Stability in prices
  3. Awareness of product/rights
  4. Addressing safety issues
  5. Quality based pricing
  6. Match between demand and supply
  7. Opening of market due to globalization
  8. Reduction in housing interest component
  9. Quality awareness/ customer focus
  10. Impetus on infrastructure development
  11. Standardization of procedures
  12. Transparency in transactions
  13. Young stream of developers coming in market
  14. Tax incentives and benefits
  15. Development of comprehensive market information
  16. High disposable income with individuals
  17. Liberalization of industry
  18. Service sector development
  19. IT/ ITES development
  20. Financial services development
  21. Technical/ support services
  22. Hospitality/ recreation services
  23. Liberalization of industry
  24. Shift from primary/ secondary sector to tertiary sector
  25. Rationalization in industry
  26. Paradigm shift from profit oriented to service oriented
  27. Opening of Real estate sector for Foreign Direct Investment

Currently, the property market in India is robust and driven by sustained demand. Apart from the generic demand in the metros, I see a high potential in class I & II towns as the future driver of the country’s real estate market because the need for quality housing stock in these towns will be the highest.

The year 2016 saw the government authorities over-regulating the real estate sector. Besides, we have noticed an increase in development charges and premiums as well, which in turn has led to prices remaining on the higher side. The sector was also marked by many new and innovative schemes introduced to attract home-buyers. However, many of these schemes and offers did not work in favour of the developers. Ready-to-move-in properties were preferred over under-construction projects.2016 was a year of consolidation for the developers where a majority of the reputed developers did not launch any new projects and focused solely on completing their existing projects and selling the pending inventory.

  1. Housing loan rates significantly drop, which leads to more disposable income in the hands of potential home-buyers;
  2. The demand for ready-to-move-in properties will also increase among home-buyers;
  3. RERA-compliant projects will be more preferred by home-buyers.