Venue—Hotel Kohinoor Continental, Mumbai
Moderator—Pranay Vakil—Chairman Praron Consultancy
Atul Modak—Head-Kohinoor City
Gaurav Gupta—Director, Omkar Realtors & Developers
Jhumur Ghosh—National Feature Editor, Times of India
Ravi Sinha—CEO & Managing Editor, Track2Realty
Pranay Vakil: Good afternoon everyone. We are indeed sitting in one of the most interesting market of real estate when I feel the developer is confused, the buyer is confused and the government is confused.
Jhumur Ghosh: The most confused.
Pranay Vakil: You said it, I didn’t. The buyer is confused because every day he is reading in the newspapers that prices are going down, but when he goes out to buy a house he finds that prices have actually gone up. I think the lender is confused because he is lending money and the developer is making all kinds of commitment and things are not working out the way it was promised and he is unable to understand why it is not happening.
The developer is confused because the rules and regulations are being changed and the way DC (Development Control) rule is changing for future development. But I guess the major problem today is under-construction flats and how to deal with that. When you already created a third party right you can not change the plan.
Ravi Sinha: Had the government not been confused, all other confusions could have been sorted out.
Pranay Vakil: Yes, the government is confused because they try all measures like the RBI tries all measures and no effect is felt. I remember reading the CM comments on the new DC regulation and all the measures that should bring down the price. I am sure it has not happened that way, so they are confused. I feel sometimes we consultants are confused because the advice that we give, at times it does not work out the way we think. But I think out of this confusion some kind of order will evolve, which is the world phenomena all the time and we are waiting for that to happen. We waited long enough for that.
Jhumur Ghosh: And we stopped giving advice to the readers that the rates are going down. Our official line now is you like something, you can afford it, go for it because a bird in hand is better than two in the bush.
Pranay Vakil: But if you want now you can start predictions on commercial property because you know you are confining yourself into commercial properties. However, there is going to be over supply in commercial properties and we are seeing huge amount of not only vacancies but also huge amount of rent negotiation which are taking place and something which was going for, say 175 rupees per sq ft now can be picked up at Rs. 100 per sq ft. I mean that kind of reduction is something which is food for thought.
Ravi Sinha: May be the media is equally confused and that way we all stand together. But to take forward to what Jhumur has said we had a number of stories on this since 2009 and we came to the conclusion that if you are an end user, this is the time to buy because there is no guarantee of prices going down. However, trading of houses or speculative buying is something that is not advisable.
Pranay Vakil: I think what you are saying is true but what the Prime Minister said yesterday may have a huge impact on what all of us are doing because if this kind of money is spent on infrastructure, it may change the dimension of where the developer will develop and what kind of pricing it will have because connectivity is the key.
If you are able to connect Mumbai with the main lane and if you are able to commute in 20 minutes obviously the pricing will change, the way Manhattan and other places have grown.
…..to be continued
