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.

Realty Plus - - Contents -

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.’

San­jay Mehro­tra

San­jay Gupta

Ro­hit Pod­dar

Rahul Grover

Pan­dit Rathod

Sid­dharth Va­sude­van

Amit Goenka

Di­nesh Bhutani

Dr. An­nurag Ba­tra

Amit B Wad­hwani

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