The city with a penchant for villas is mostly moving towards the periphery locations. In those locations the land cost is still very affordable. The buyers, mostly local communities, are preferring these plotted villas. Since the developers do not have the construction finance to bother, they can even hold it in the wake of slow sales.
Even as India’s middle-class grapples with the prospect of an uncertain future in their careers and financial ability – the main drivers of housing demand – the rise of India’s super-rich continues unabated. According to Credit Suisse report, there were an estimated 3.42 lakh dollar-millionaires in India as on mid-2018 who collectively held around USD 6 trillion. It is forecast that 5.26 lakh Indian dollar millionaires’ wealth will be around USD 8.8 trillion by 2023. Market fluctuations make very little difference to the personal networth of these individuals.
Traditionally, the festive quarter fares better than the previous quarters of the year when it comes to housing sales – the combination of religious sentiment and festive deals and freebies is a potent mix during this part of the year. For instance, Q4 2015 saw 70,000 homes sold in the seven major cities. However, as tempting as it was for developers to believe that this was an unshakeable performance standard, it was certainly shaken just a year later. After demonetization (DeMo) was announced in this critical quarter in 2016, housing sales halved to 32,100 units.
Indian real estate is still a viable and fairly safe long-term investment option. Investors with a short-term view on ‘instant returns’ need to look elsewhere, but most other asset classes are quite volatile in nature and will continue to remain so. Indian residential real estate is a long-time favourite of resident Indians and NRIs, and recent trends suggest a positive outlook for this asset class going forward. Property prices have bottomed out and cannot possibly reduce further, especially since construction costs are gradually heading north.
Highly-established developers are known to conduct careful research on their locations and are therefore able to pinpoint the most happening growth corridors. They know what product works best, and where it works best. While end-users are assured that they are buying into a well-researched area, this fact also ‘raises the bottom’ for investors who are looking for the right product to back.
In the ‘golden years’ of India’s housing market, property was the default go-to option for big-ticket investment. With real estate’s fading allure, investors began exploring other options and found them to quite rewarding. For instance, they can invest in a start-up with sums as ‘low’ as INR 10 lakhs. Many entrepreneurially-inclined Indians find the potential ROI (as high as 15% in many instances) makes more sense. Mutual funds provide good returns and the entry level is low enough to be affordable to many.
In his role as National Sales Head at PropTiger.com, Bikram will also be responsible for the Broker Aggregation Platform and the Home Loans vertical. In this critical leadership position, he will play a vital role in developing and implementing sales strategies, augmenting the company’s sales infrastructure and leading a countrywide team of sales personnel.
Some of the popular subvention schemes at the time included 20:80 or 25:75 payment plans wherein buyer paid 20-25% upfront while the developer paid the remaining 80% to the lending HFCs or banks on behalf of the buyer, until possession. The 5:90:5 scheme was the most common one on offer.
It was not the magic wand it was hoped to be. However, over the past two years, the Real Estate Regulatory Act (RERA) has brought more sanity – and the return of consumer power – than seemed possible in such a short time. The real estate sector is still struggling with it and the Act is very much work-in-progress in many states, but RERA nevertheless hangs like a sword of Damocles over a previously unregulated industry. Eventual compliance across the board seems inevitable.
I am today seriously wondering whether all the celebrating and self-congratulating developers have indeed got “Exclusive” draft of the policy of land acquisition in Kashmir? Does it include construction facing Dal Lake of Srinagar that is Green Belt? Have they done their business calculations and cost & benefit analysis over there? There are more questions than what the builders could answer at this point of time. But what could be vouchsafed is the fact that all these euphoric overtones are premature. None of the industry voices from the matured sectors with more potential to pull off in the State have displayed this kind of immaturity.