Interview: Govt should reintroduce subvention scheme for some time: Mani Rangarajan-Proptiger.com
If the real estate sector is given industry status, a whole bunch of concerns will get resolved like liquidity issues and bank priority lending matters. In an exclusive interview with RealtynInfra.com, Mani Rangarajan, Group COO, Housing.com, Makaan.com and Proptiger.com, shares insights and concerns for the realty sector, Here are the excerpts:
Q) What are the expectations from the festive season this year? Will it be at par with last year?
The mood is optimistic as we have got some fantastic Q3 2020 numbers from the realty market, which has cemented the faith that the coming months will be better for the real estate sector. Residential home sales saw an increase of 85 percent in the top eight cities over the previous quarter. Also, new supply grew almost 60 percent on a QoQ basis with 43 percent units launched in the affordable housing segment.
We cannot compare these figures to last year as YoY growth is still negative and in the festival season it will improve, and we hope that it will be on par with last year. The optimism in the sector is due to many factors such as all-time low home loan interest rates, availability of ready-to-move-in units, renewed interest of buyers in tier II-III cities in real estate, the lure of extra income in case of commercial assets, etc.
Q) What are the expectations from 2021?
As stated above, there is optimism due to multiple factors; the real estate in 2021 is likely to recover fully. The use of technology and digital platforms by the developer community is also going to show fabulous results in the coming months. The campaigns run by the real estate to reach out to the buyers is making even the fence-sitters realize the importance of getting hold of a property at a time when the market is end-user friendly.
The year ahead will also see growth in the popularity of newer concepts such as co-living, student living, co-working spaces, etc. The number of launches is also likely to increase as developers are all set to take advantage of the potent demand. Peripheral areas of metro cities, too, will gain traction as the mood is to have an investment-ready for the darker days. The demand from the ‘Shadow cities’ or tier II and III cities has seen a significant spike in August 2020, as per the Think Piece 'Time for Internal Globalisation - Small Cities Setting the Tone for Revival' by Housing.com.
Q) When can we see consolidation in the Indian real estate industry in a major way and how bad/how good will it be?
Consolidation started happening a few years back, especially after the Government took steps to streamline the sector by introducing measures such as RERA and GST, etc. It is good for the sector as only the serious players and financially strong are now left in the market; this would also help the market regain its charm and gain the trust of the buyers by delivering quality projects.
Real estate development is an intricate process and consolidation will ensure that only the companies that are well-versed with the intricacies remain in business. There will be competition to deliver a quality project on time, leading to a more mature market.
Q) What are the changes required from the governments’ side (regulations) that will remove bottlenecks and give further boost to the sector?
There is a long pending demand of giving industry status to the sector, which will help iron out many problems that keep on raising its head time and again. One step and the sector will see many problems getting solved, such as liquidity issues, banks priority lending matters, etc. In the short-term, the Government should think of reintroducing the subvention scheme that will help the developers raise some funds.