Ready-to-move & luxury homes being preferred: Jayesh Rathod-The Guardians Real Estate Advisory
With the upcoming festive season, there are high hopes in the real estate industry. In an interview with Jayesh Rathod, Executive Director, The Guardians Real Estate Advisory, RealtynInfra.com tries to get a sense of how things are likely to pan out in the coming few months and 2021. Here are the excerpts:
Q) What are the expectations from the festive season this year? Will it at par with last year?
The realty sector is witnessing quick revival from the impact of sustained lockdowns since March this year. Real Estate in several parts of the country is attracting good demand from fence-sitters (customers who always wanted to buy but were waiting for a good/discounted price).
The impact of the lockdown on developers and the reduction in Stamp duty charges by the Maharashtra government has helped create such an opportunity for fence sitting customers. The upcoming festive season is expected to augur well the category, with a lot many developers holding high hopes of good sales numbers. The festive season this year is expected to deliver better numbers than the year before, primarily because of the discounts being offered by developers against immediate & early payments, significantly reduced borrowing cost and the cut in stamp duty charges announced by state governments.
Q) What are the expectations from 2021?
The year of 2021 should be able to bring back the customers from the service class who have been impacted as a result of the salary cuts and job losses. The service class customer contributes the highest to the demand for affordable and mid-income homes, a category that suffered a sudden jolt due to the lockdown. Currently in Mumbai, the most expensive real estate market of the country, a lot of movement is being noticed in the ready-to-move-in, premium and luxury home segment. The reason for it is the drastic reduction in borrowing and transaction costs.
Going forward, it remains to be seen how the demand can be sustained given the fact that the reduction in transaction and borrowing costs are temporary. The year of 2021 will be the year when the impact of lockdown would be felt, the least we expect is stability given the facts on the table.
Q) When can we see consolidation in the Indian real estate industry in major way and how bad/how good will it be?
Let me tell you, the consolidation is already happening. And is happening at a pace much faster than before. Today, consolidation by way of JV’s, JD’s and different other partnerships is clearly visible across the sector. Developers across metros have mastered the art of working with each other and a lot of these projects are on the verge of delivery while being quite successful. It is because the opportunities for development are so many via the consolidation routes, that developers have more or less abandoned redevelopment projects. Today for developers with cash-in-hand, just about any project is up for grabs.
Q) What are the changes required from the governments’ side (regulations) that will remove bottlenecks and give further boost to the sector?
Quite a few, let’s begin with the longstanding demand of a single window clearance. This single reform will provide an unimaginable boost to the supply in the industry. Second, and another long pending demand is the industry status. For now only affordable housing has been accorded the industry status and was therefore doing very well until the lockdowns both in terms of demand generation and increased number of projects.
Apart from these, the government needs innovatively look at bringing down the cost of borrowing for homebuyers. The west has seen unprecedented surge in demand at a reduced borrowing cost, the current government at the Centre does seem to have a strategy in that regard, but the same needs to be implemented quickly.