Good morning, these days, an online search for news will flood your results page with vocal pieces on what the industry expects from the Union Budget 2022.
Infrastructure status, increase in tax exemption on home loan repayments, GST relief, revised input tax credits, a check on building material costs, and boatloads of interest free, no-questions-asked loans for real estate developers.
Okay, we made up that last one but you get the drift? It seems that the industry will cease to exist if Budget22 does not arrive with 20 pages of goodies for it.
🔮 Will the real estate sector's wishes be granted by the finmin? We say maybe. And if you have closely followed the father-son conversations in The Pursuit of Happyness, you'll know what maybe means.
Ah. Mondays.
😷↔1 metre↔😷
Online Sales Pose New Challenges For Retailers
In an effort to increase sales, retailers of all kinds are decreasing their dependence on brick and mortar stores and focusing on online sales instead.
And while online shopping does appeal to pandemic-zapped populations, the app happy shopper has developed another habit - easy returns.
Both Sides Of The Story
While online sales are making the neighbourhood store less relevant and the retail real estate investor perspire, ultimately, they serve the purpose of pumping revenue into retail firms that need it.
Or do they? While it's true that online sales allow retailers to reach more customers, there's a flip side that could be denting retailer' profits major time.
Servicing Returns Is Expensive
Per this report, retail returns in America jumped to an average of 16.6% in 2021, while being at 10.6% in 2020.
🔄 That's over USD761 billion of merchandise that retailers had to take back and restock, more so in the apparel, accessories, and shoes categories - items where it's hard to gauge fit over a computer.
And a ton of those returns sprung from online orders. Per industry watchers, the average rate of returns for online purchases in 2021 was 20.8%, an increase from 18.1% in 2020.
And that's a financial loss retailers will have to absorb more often as more customers favour online sales.
And Then There's Fraud
Turns out, there's another mysterious cost to returns - returned goods are also opening the door to fraud. The NRF estimates that for every USD100 worth of accepted returns, retailers lose USD10.30 to fraud.
Affordable Housing: What's Working?
India's affordable housing push has been commendable in the recent past. Will the same positive trend continue through 2022?
Here's a quick roundup of what's working. . .
🍎 WFH Pushing Sales Up: As affordable housing makes it easier to climb the home ownership ladder, work from home is further pushing fence-sitting renters to buy their first homes.
🍏 Regulations Are Helping: As project completion timelines are relaxed due to the pandemic, real estate developers are getting breathing room to stabilise costs and keep their offerings affordable despite inflation.
🍎 Internet Increasing Reach: The internet has made the search and discovery of apt properties easier than ever before. And when the right homes can be shortlisted from the couch itself, it's natural for sales to go up.
🍏 Bells And Whistles Sell: While older housing projects focused on structures and bare space, new age builders are paying more attention to aesthetics, amenities and creature comforts to woo today's homebuyer. And guess what, its resulting in more home sales.
3 Quick Strikes
1️⃣ The housing market is expected to remain strong through Q1, 2022, with no major impact on demand due to the latest Covid wave, per experts.
2️⃣ In 2021, there was a 26% jump in institutional investments into alternate real estate assets like data centres, student housing, senior living and co-living in India, with an inflow of USD500 million.
3️⃣ 711 new real estate agents registered themselves with Tamil Nadu RERA in 2021. This number was 299 in 2020 and 688 in 2019, signalling a big rebound of interest and confidence in the sector.
No RERA In J&K Yet? Here's Plan B
The folks of Jammu and Kashmir can't wait to have a real estate watchdog around to keep an eye on all the upcoming real estate development.
The Backstory
A year ago, the J&K government had started the process for the constitution of the RERA under the Real Estate (Regulation and Development) Act, 2016. But things got delayed and here we are now…
Present Day
The J&K government has for the time being designated the Principal Secretary, Housing and Urban Development Department (H&UDD), as a regulatory authority under the RERA Act, 2016.
The Lieutenant Governor of Kashmir exercised the powers conferred in him by the third proviso of section 20, sub-section (1) of the RERA Act.
Per this section, until a state regulatory body is established, the government can designate any regulatory body or preferably, the Secretary of the department of housing of the state as the regulatory authority. This was done amid delays over the constitution of RERA.
However, a high level committee is yet to recommend a chairperson and other members of RERA.
⏳ Let’s see how long that takes.
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🚀 Investors pumped in a record USD17 billion into 328 different space companies in 2021, per a report from VC firm Space Capital. The figure beats the USD 9.1 billion investment record set in 2020.
Space investment accounted for 3% of total global venture capital flows last year, according to the report.
See you next when we are seven hours into February. 💚
☕ The Crew@Ginger Chai