In buying a house, an average Indian makes the largest investment of his life time. Roof over one’s head is the third most essential item after food and clothing (Roti-Kapda-Makan).
Bizbuzz speaks to a cross section to do a realty check. Here is the respone from Om Ahuja- Chief Operating Officer- Residential Business, K Raheja Corp.
· How was the year gone by for the real estate/infra industry – in terms of sales and new project launches. Can you please list a few launches and the category of projects – luxury, affordable etc. and the locations?
The year 2018 has been exciting for the residential sector and has seen both, sales and launches pick up across top 7 Indian cities - Bengaluru, National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Chennai, Kolkata, Pune and Hyderabad. Housing sales witnessed a jump of nearly 8% in the first three quarters of 2018 as against the same period in 2017. Sales in the luxury housing segment picked up and even the commercial spaces segment showed great potential with K Raheja Corp closing some interesting deals. Areas such as Airoli in Navi Mumbai, Nacharam in Hyderabad, and Pirangut in Pune among others are witnessing traction with respect to demand for residential homes and commercial office spaces.
·Do you appreciate the point that infrastructure development is important for the growth of realty? What according to you are key infra issues that weigh the customer’s mind while looking for a house?
Infrastructure development definitely plays an integral role in the betterment of the realty market. The projects will lead to improved connectivity which will open up new avenues for developers and homebuyers alike. Mumbai for instance has witnessed a burgeoning population leading to a growth in different nodes of the maximum city. With the population now standing at 22 million, there is a need for expansion and newer markets to be integrated into one large metropolis. Infrastructure projects will seamlessly connect the zones together and fuel growth.
· The government has initiated several infra projects such as metro, coastal road and BandraVersova Sea Link. Do you agree that these will help create a positive sentiment for realty industry?
The government has placed a strong emphasis on developing the infrastructure of the maximum city. These projects will significantly contribute towards a more positive sentiment in the real estate market as it will open up new markets for developers and homebuyers. For example, the Mumbai Trans Harbor Link which will connect the island city to the satellite city of Navi Mumbai will effortlessly bring the two together making it one Mumbai Metropolitan Region. Infrastructure development in a particular locality has a significant impact on the property rates in the long term as homebuyers prefer to stay near transport facilities. Moreover, the projects will also decongest the roads and make commuting effortless and easier.
· Specifically speaking, please mention the area wise impact of the following: Mumbai Metro Projects, Coastal Road and BandraVersova Sea Link.
The Maharashtra Government has always taken bold steps to develop the city of dreams. When the island city became starved of space, the development shifted towards the North which gave rise to Navi Mumbai. In the late 80s and early 90s, the railway bridge connecting Mumbai and Navi Mumbai with suburban local trains was completed. In the years that followed, the railways connected Airoli with Vashi and Panvel with Mumbai which almost completed the picture. The new airport and the Mumbai Trans Harbour Link (MTHL) are expected to be game changers with the latter reducing the commute time between South Mumbai and Navi Mumbai to 25 minutes, merging the two suburban zones into one megapolis. This planned haven is already an attractive proposition, and the future infrastructure developments being planned only make it irresistible.
· Do you expect the prices to go up in the next three to five years? If yes, by how many percentage points?
Prices will only rationalize and with reputed developers will bring in fair pricing. Affordable housing is already being incentivized; and the PM’s Housing for All by 2022 will see further incentivisation for affordable housing.
For the mid-play and luxury segments, there will be rationalization merited to the product offering.
· Has the industry seen any correction in last couple of years? If yes, by how much?
The industry has not witnessed a correction in the last couple of years however the market has become more mature and structured. The progressive policy interventions along with the several incentives to builders to develop affordable housing have contributed towards the making of a robust framework.
· Has RERA helped in bringing about or improving transparency?
RERA has been a revolution for the real estate sector, transforming the very fabric of the industry. Over the past year and a half, most of the states and union territories have functional bodies with an encouraging number of projects registered, pan India.We certainly believe that it has been successful in bringing out greater transparency in the sector, beefing up sentiments for end-users, investors and developers alike. Our ground level feedback from customers has been positive and forward-looking in making purchases. RERA has brought about financial and development discipline among developers and has the consumer, better informed. The environment created will certainly give rise to professionally run development companies to succeed. Overall, the changes seen have been encouraging and have set the foundation for a robust market transformation
· Do you feel this is the right time to buy?
The right time to buy varies for each individual buyer and greatly depends on the purpose of purchase, i.e., live-in, investment, disposable income, potential markets, etc. While demand in some markets may have been subdued, the right product at the right location is sure selling.It is imperative to create a check list with all your requirements and then seek a reliable developer before making a huge financial commitment. If you are satisfied with all your prerequisites that you seek, then it is definitely the right time to buy a property.
· One line on how do you think the New Year will pan out for realty/infra industries since the construction industry contributes handsomely to the GDP?
With the path set for a robust framework, we can expect to see a more consolidated and mature market with only the reputed players prevailing and delivery of quality products in the stipulated timelines.
23 Jul 2019
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