Here are the 5 stories that you need to be aware of from this past week:

• Home run: India's construction sector saw its best-ever growth in five quarters expanding 13.3% in July-September. The housing boom, driven by rising incomes, a housing shortage, and strong population growth, contributes to India's 7.6% GDP growth. Builders are optimistic, with expectations that the boom could last for several years. Despite increased prices, home sales in major cities are surging, and the government's efforts to boost affordable housing have further propelled construction. Read more
• De-stalled: The Indian government has approved 342 proposals under the SWAMIH investment fund to revive stalled real estate projects. It will benefit over 2 lakh homebuyers and unlock projects worth ₹94,367 crore. This initiative aims to fund net-worth positive projects, including those mired in insolvency or declared non-performing assets, as informed by Union Minister of State for Housing and Urban Affairs Kaushal Kishore. Read more
• Metro boost: The real estate sector in Gurugram is set to experience a significant boost with the upcoming metro rail project, similar to the positive impacts seen in Delhi and Noida from their respective metro systems. The creation of the Gurgaon Metro Rail Corporation (GMRC) is a strategic move to manage this expansion, with crucial financial support from the Union government. The new metro line, spanning 28 kilometres and encompassing 27 stations, is expected to enhance connectivity and drive up property values, particularly in key sectors and business districts. Read more
• AI Alliance: IBM and Meta have launched the AI Alliance, an international collaboration with over 50 global members including AMD, CERN, and NASA, aimed at advancing open, safe, and responsible AI. This initiative aims to leverage AI advancements to enhance various aspects of life while prioritising safety, diversity, and economic opportunity. Key objectives include developing benchmarks, advancing open foundation models, fostering AI hardware ecosystems, supporting global AI skills, and informing public discourse on AI. Read more
• Living in the future: In 2053, what will personal technology be like? Television may feature ubiquitous, thin, bright screens, free with subscription services. Phones may evolve into AI-powered personal assistants integrated into headsets or even our brains, minimising physical interaction with devices. Health and fitness tracking may advance with more detailed data collection and predictive health models. Cars may shift towards electric and autonomous models, with changes in ownership models and an increase in ride-sharing and micro-mobility solutions. Read more

Finding a house to rent tends to be a difficult task for many. This is despite urban India having more than 11 million homes vacant. To put the number in context, the total number of homeless in India is 1.77 million. This cruel paradox exists primarily because many homeowners are reluctant to lease out their homes because of fears of repossession. To allay homeowner fears, the Indian government in 2021 enacted the Model Tenancy Act. Here’s a basic breakdown of the law’s provisions:

Understanding the MTA: At its core, the MTA is a comprehensive framework that seeks to streamline and standardise the rental housing market in India. Via the MTA, the Ministry of Housing and Urban Affairs (MoHUA) aims to rectify existing rent control laws that have hindered the growth of rental housing, discouraging owners from renting out vacant houses due to the fear of repossession.

Key provisions and implications:

• Standardisation of agreements: The MTA introduces standardised rental agreements, bringing clarity and uniformity to the terms and conditions. This not only simplifies the renting process but also reduces ambiguity, benefiting both landlords and tenants. Responsibilities are outlined for both parties ensuring timely repair and damage compensation.
• Security deposits: Some landlords in big cities have been notorious for demanding a security deposit equivalent to six months or sometimes even a year's worth of rent. The MTA caps security deposits limiting it to two months' rent for residential properties and six months' rent for commercial properties. This provision aims to make housing more accessible for tenants while ensuring landlords receive fair compensation.
• Rent control and revision: The MTA outlines a structured approach to rent control and revision, preventing arbitrary increases. This provides tenants with a sense of stability and landlords with a regulated yet flexible mechanism for adjusting rents.
• Fast-track dispute resolution: To address concerns around lengthy dispute resolution in civil cases, the MTA establishes rent authorities and rent courts. This expedites the resolution process, offering a swift and efficient mechanism to settle disagreements, a crucial step in promoting a healthy rental ecosystem.

Challenges and opportunities: While the MTA brings a wave of positive changes, challenges do exist. Awareness and implementation at the ground level, especially in diverse rental markets across India, will be critical. Additionally, since land and urban development is a state list issue, MTA’s adoption is dependent on individual states. As a result, only Andhra Pradesh, Tamil Nadu, Uttar Pradesh, and Assam have ratified the MTA so far. However, with evolving technical integrations, the MTA holds the potential to ease landlord-tenant relationships.

Road ahead: As we navigate the uncharted waters of the Model Tenancy Act, it's evident that this legislation holds the potential to redefine how we approach rental housing in India. Whether you're a landlord, tenant, or industry professional, understanding the intricacies of the MTA is essential in the evolving landscape of Indian real estate.

How can appraisers blend AI tools with their expertise in real estate valuation to guarantee thorough and precise property assessments?
- Urvashi

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Disclaimer: This newsletter is intended for informational purposes only and should not be construed as professional advice. Please conduct your own due diligence prior to making any decisions.