Interviw:Realty sector has seen sluggish consolidation for 2 yrs- Manju Yagnik- Nahar Grp
While consolidation has been sluggish, corona pandemic and lockdown have given much-needed impetus for major consolidation in the industry. Meanwhile, realty sector is expected to witness continuation of sales momentum for next two quarters. In a candid exclisive interview with RealtynInfra.com, Manju Yagnik, Vice-Chairperson, Nahar Group and Vice President, NAREDCO (Maharashtra) talks about various aspects of the sector. Here are the excerpts:
Q) What are the expectations from the festive season this year? Will it at par with last year?
Festivals are usually good precursors which increases the footfalls, resulting in a surge in sales. The October-December festive time will register sales growth of 50 percent from Q3, largely due to the regulatory reliefs, decade low bank loan interest rates clubbed with the bait of festive offers, and attractive payment schemes from developers.Understanding that the buyers investing until December will make the most, the industry will surely register somewhat decent sales numbers compared to last year.
Q) What are the expectations from 2021?
We will see continuation of sales momentum for next two quarters ought of ongoing government reforms. Q3 sales clearly indicates an end-user market which has pushed the sector into a new growth trajectory. In forthcoming quarters we will see flow of serious buyers to make real estate purchases taking advantage of decade-low stamp duty of 2 percent and interest rates at 6.9 percent. Keeping pandemic in mind, homebuyers will largely invest in townships that offer value for money and good return on investment (ROI) with a holistic living experience.
Brands that offer well-being and convenience quotient, locational advantages, unmatched connectivity, educational institutions, entertainment hubs, and medical and healthcare facilities will clock good sales years to come. In this market which is favoring the buyers, we will see developers launching new projects to tap the buyers who want to take advantage of the government’s regulatory reliefs.
Q) When can we see consolidation in the Indian real estate industry in major way and how bad/how good will it be?
We have been witnessing sluggish consolidation for the last two years post the introduction of revolutionary reforms RERA and GST. However, the pandemic and ensuing lockdown have given the much-needed push for major consolidation in the industry. The government reforms and Covid-19 has removed the unorganized players and only developers with good financial track record are set to gain in this market.
Consolidation will ensure home buyers preference to shift to organized & branded players who are known for good reputation, transparency, quality construction, and timely delivery.Moreover, the much needed funding will see its way back to the sector resulting into spate of new launches generating employmentand push the sector on the path of growth trajectory
Q) What are the changes required from the governments’ side (regulations) that will remove bottlenecks and give further boost to the sector?
The announcement of ‘infrastructure status’ to the affordable housing sector, will serve as a significant step in achieving the government’s ‘Housing for All’ mission by 2022. To attract more investments and assure sustained growth of affordable housing in India, higher limit on external commercial borrowings, easy and dedicated access to institutional financing will give an advantage.
Making it a priority, banks will lend more which will benefit more to buyers as well. Under the Pradhan Mantri Awas Yojana (PMAY), government’s decision to provide interest subvention of 3 percent and 4 percent for loans of up to Rs 12 lakh and Rs 9 lakh, respectively, will further boost demand in affordable housing segment.