GST is 1% for affordable under construction housing homes with no ITC. Affordable housing homes are those with specific carpet areas ( 9Sqm for non metro and 60 for metro). In addition, homes that cost more than 45L are not considered as affordable housing units and are taxed at 5% GST without ITC.
There is a consensus that with the dissapearing of ITC , margins for developers will be hurt. However good developers may be able to increase prices but i am doubtful about that. The change in GST has been brought about by developer actions of not passing on of ITC to customers which was the original intent of the govt so the govt had no choice but to do take this step on behalf of the customers. Developers were very happy with the fat Input Tax Credits they were getting however this ends.
The GST on commercial properties continues as before with ITC i.e 12%
The net reduction in Final selling price is less than 1%. Of course for a city like Mumbai where land cost as a % of total cost is high, the savings will be higher.
Disc- No investments in any Real Estate, construction material or HFC.
Would like to know if anyone has done a DCF on Suntek? If yes would be glad if someone could share a note. Currently the price looks attractive but Iād like to know what the price would be considering 50% margin of safety after arriving at value through DCF. If anyone at all is or was tracking suntek :\
Are we evaluating one side of post COVID-19 Working From Home (WFH) scenario?
If we believe that WFH will reduce commercial / office space requirement but will it not increase residential real estate requirement?.
Considering following -
(1) Company could transfer some % saving from rental space to employees who are working from home. (Employees could get some more salary!)
(2) Lower home loan interest - presently it is lowest in history and going lower and lower !!
(3) In COVID-19 many employees realized irritating behavior by their landlord. This could force them to have their own home!
(4) Having own home is better for WFH concept
In my assessment, next 5 years, investment in good real estate companies (which are available at cheap valuation) will give better return than present market darling companies (like D-mart, GMM Faud, etc) !!
Anyone of you have the latest research report on housing demand forecast across Indian cities post COVID, may be for the next 3-5 years? I am trying to ascertain the demand vs market share for the housing finance companies. Please help if someone has details. thank you.
