DECIPHERING INDIAN REAL ESTATE
On the occasion of Dusshera, the Realty+ Show Episode 12 on Republic TV with 10 panellists had a disruptive discussion on consumer trends and home buying patterns.
Amit Wadhwani started the show with the most controversial question “Are consumers taking advantage of developers that are going through a bad phase? Dr. Batra seem to agree that many under construction projects get stuck due to buyers non-payment of their dues as they book multiple flats or they are no longer interested in purchase and want to withdraw. In Rohit Poddar’s opinion, RERA has helped resolve such matters and much faster.
On topic of RERA, Wadhwani brought to notice the fact that if the developer delays the project, consumers can get their money back with 10.6% interest. However, according to Sanjay Mehrotra, very few people are taking advantage of this provision. Sanjay Gupta’s suggestion for consumers was to consider developers as their allies and not a hindrance..
Pandit Rathod felt that each project would have some trouble-making customers and developers have to deal with them. Rahul Grover clarified “Risks and complaints have reduced as developers are complying with RERA norms and consumers too are better informed due to the digital media.”
Housing or Investment
Citing the case studies of 59 per cent consumers defaulting payments where the construction of building is delayed, Wadhwani questioned the intent of homebuyers, if it was only for returns or actually to get a home. Amit Goenka said, “Property buying holds the largest share of any average Indian’s investment portfolio and it’s natural he expects some capitalisations over the life of the property.” Poddar disagreed with the view, “Homebuyers are aware that in the current scenario, capital appreciation is negligible for short period and their intention is more towards buying the first dream home.”
Consumer Behavioural Patterns
Siddharth Vasudevan, comparing the consumer trends of tier II and tier I cities stated, “Most of the homebuyers in smaller cities are service class and defaults and nonpayment is not so high in this segment.” Speaking about
Surat, Dinesh Bhutani, agreed to the opinion and said that Surat was witnessing a growing real estate market with surge in urban population.
Dr. Batra cited an example of a consumer that bought 3 properties and when unable to pay EMIS, blamed the developers. “In this case, the consumer had overleveraged himself that had created a issue for him as well as the developer,” he explained..
Poddar added that defaults have become much lesser across cities as under RERA both the builder and the consumer have rights as well as penalties. He added, “It’s better to contractually define the terms which are fair on both the sides so that the consumer cannot cancel the registration according to the inflation and deflation of the market.”
Stating the facts, Gupta, mentioned that in 2018, Mumbai market has experienced 60% of the transactions being called off prompted by the falling returns. To safeguard against such practices, Goenka’s suggestion was to stay away from unregistered agreements. “The whole process of demonetisation, GST and RERA is bringing the sector within a governance standard and is no longer an unorganized or informal industry.’
Dr. Annurag Batra
Amit B Wadhwani