NBFC Crisis Has Slackened Sentiments of Residential Segment Of Realty Sector: Mahagun Group
As the government has reduced Corporate Tax Rate in the country, there are hopes of some corretion in property prices. In this interview, Dhiraj Jain, Director, Mahagun Group, talks about the prices, expectations during festive season and other aspects of the industry:
Ques: With a reduction in Corporate Taxes in the country, how soon can there be a reduction in property prices and what will be the quantum of reduction.
By reducing the corporate tax government has been able to strike at the point where the need is. With stocks going up because of the steps taken by the government has benefited the corporate world. We are hopeful that now the government will pay heed to single-window clearance, cheaper land parcels and opening up of unused land for real estate development for the growth of real estate sector.
We have to understand that the sector plays a huge role in country's GDP and by strengthening it we can achieve the targets set by the government for the overall development of economy and mission housing for all.
Ques: How is housing sales expected to be during the festive season this year?
The Indian economy including the real estate sector is, however, passing through a challenging phase for now. But with several measures taken by the government in the past and now towards the real estate sector the industry is expected to gain its momentum. With government so stern with its objectives the rapid sale and possession of projects hold a positive stance. Looking at FY 18-19 or H1 of FY 19-20, the sales have improved at most of the projects which are being developed by developers who adhere to government norms and policies. With festive season expected to add on the fervour to the real estate sector, the sales are expected to boom.
Mahagun Group, adding that fervour to the festive season has extended its ongoing Great Indian Property Bazaar till the end of festive season, where the group is offering 15 great offers - 0% GST, Car Parking, Modular Kitchen, Hotel/Club membership etc on its different projects - Mahagun Mantra, Mahagun Montage, Mahagun Myswoods, Mahagun Manorial, Mahagun Mezzaria, Mahagun Mirabella and Mahagun Meadows.
Ques: What is the current situation about liquidity in the real estate sector, especially now when subvention schemes have been barred by National Housing Bank?
The Real estate is part of the economy and any step taken to boost the economy will have a direct impact on real estate too. For example, the plan of the government to spend on urban infrastructure will strengthen our cities and improve standards of living. Then the decision to consolidate public sector banks will help the banking sector which in turn helps the real estate sector.
Once the banking sector is strengthened the liquidity crisis will be over and real estate will be back with a bang. In fact, liquidity is a major concern and another one was stuck projects, which is also taken care of by the announcement of funds for stuck projects.
Ques: There is talk of overall economic slowdown in the economy. How do you see it impacting the real estate sector which has already been struggling with its own slowdown for the past few years?
There has been an overall slowdown in the economy along with NBFC crisis. It has slackened the sentiments of the residential segment in the real estate sector. Accompanied with the ongoing liquidity issue a diminutive demand scenario in the market sentiments are however not showing any positive mark.
However, as mentioned earlier with government being particular about the announcements and reforms the sector is expected to revive soon and gain its momentum.