8 out of every ten home buyers in the Indian cities are sulking with the unfair trade practices of the real estate developers. Only 20 per cent of the buyers said they received a defect-free home and timely possession. The low customer satisfaction index was as much evident with developers offering affordable housing as with luxury housing.
PMAY (Pradhan Mantri Aawas Yojana) is once again in the news after the Union Budget 2023-24. But a project that should have been seen as a mission is in the news for some wrong reasons. It’s not just the fact that the Government of India has not clarified its achievements with Housing for All by 2022, but Track2Realty finds there are data discrepancies with the project as well.
As the Finance Minister Ms Nirmala Sitharaman announced to lower the LTCG (Long Term Capital Gains) from 20% to 12.5%, the stock market took a hit. The analysts across the financial spectrum immediately swung into analysis that the LTCG hike would adversely affect the stock market in the short term but big pocket investors won’t be affected as much as presumed. A section of financial wizards who understand the nuances of personal finance across the asset classes had even bigger a worry – Real Estate. Prima facie what looked like the LTCG being lowered from 20% to now at 12.5%, has in fact hurt the property market the most. Reason: the indexation benefit under Section 48 that is presently available for property, gold, and other unlisted assets have been now proposed to be removed.
Explaining the decent but not impressive quarterly performance, compared to the industry peers, the CEO of a listed real estate developer justified it with heavy concentration in the residential portfolio. According to him, the diversified portfolio of industry peers with income producing commercial spaces gives those companies an edge. More than an answer over his company’s performance, Track2Realty feels the statement raised an all important question: Does diversified portfolio give an edge to realty companies.
Rajasthan-based real estate developer Trehan Group has launched a new residential project, ‘Shalimar Heights’ in the industrial town of Alwar, Rajasthan. The project is located at a 10-minute distance from India’s longest & costliest highway, the Delhi-Mumbai Expressway, and shares connectivity with metro cities and Tier 2 cities such as Jaipur, Gurugram, and other parts of the National Capital Region.
The input cost escalation has indeed brought the catch 22 situation for the real estate developers in this part of the world. As per the industry estimates, the input cost of various construction raw materials has surged from 20-35 per cent in the last 12-18 months. The property prices in the proportional ratio have not increased and in most of the micro markets across India the prices during the said period are at a standstill.
The months before the festive season are generally lull for the property market. Indians are mentally wired to buy the high valuables on the auspicious dates during the festivals. However, this seems to be changing in the property market this time around, as economic rationale indicates preference over religious beliefs. The vast majority of the home buyers anticipate price appreciation during the festive season.
When it comes to the recovery of the asset class, the market doesn’t spread its gift with equal generosity. The historic high growth curve of the stock market post Covid crash in March 2020 didn’t make every company’s share valuable. Similarly, in real estate there are certainly some clear winners & losers during the pandemic, finds Track2Realty analysis.
Will the festive season of 2021 change the course of real estate is something that most of the analysts are curious to see. The festive season has just started and it is too early to guesstimate the exact sales volume & value growth at this point of time. But with a closer look at the Indian housing market one can probably vouchsafe that there are more catalysts of optimism than pessimism. How far this optimism is sentiment driven and to what extent the economic fundamentals support the business take-up is something that needs to be evaluated.
Across the built environment of the Indian real estate the two question that are on everyone’s lips is about the recovery timelines and segment to recover first. Track2Realty finds this uncertainty about the possible recovery, or rather the lack of it, has also kept the fence sitting home buyers on the edge.