With the market getting acclimatized to key policy reforms, Indian real estate sector is set to witness golden years ahead. 99acres in interaction Amit Ruparel, Managing Director, Ruparel Realty talks about the how the industry has fared in 2018 and the expectations for the new year.
How has been the performance of your city’s realty market this year? Is it in line with the expectations you had at the beginning of the year?
The year 2018 turned out to be a truly dynamic year for us. Real estate industry was going through significant slump throughout 2017 owing to various policy changes like demonetisation and Goods and Services Tax (GST). However, 2018 saw a monetary revival and the real estate market seeing a gradual alleviation. Also to boost affordable housing segment, the government have laid various reforms which definitely accelerated demand, the latest one being Mumbai Development Plan 2034. Schemes such as increasing carpet area of residential units for interest subsidy under Credit Linked Subsidy Scheme (CLSS), opening up of No Development Zones (NDZ) and salt pans, etc. are strengthening the overall industry as well as drawing buyers to the decision making.
What is the prevalent home buying sentiment in your city?
Real estate market has evolved and transformed immensely in the past year. With the government providing a significant thrust to affordable housing, homebuyers were initially sceptical regarding investing in the market due to physical cash crunch, especially at the beginning of the year. However, the market turned more positive just as the year progressed owing to various favorable policies for the sector. Implementation of RERA has not only managed to boost confidence amongst the buyer community but has also created trust and transparency that helped the sector to tread on the path of revival. Today, there is a steep rise in enquires coming from the NRI community post the depreciating value of rupee against the US dollar.
How have sales, property price movement and new launches been in 2018? Is the trend expected to continue in 2019 as well?
Real Estate made a strong comeback in 2018 with sales of residential properties seeing a robust increase in demand. Reports have stated that metros like Mumbai, Delhi-NCR, Pune, Bangalore, Hyderabad, etc. have shown a rise in new launches. We expect this trend to continue in 2019 as well. Our affordable housing project, Ruparel Optima has been receiving good response. We did a business of around 10,000 crores within a month of the project launch. Looking at the growing demand from homebuyers, we are also planning to launch few affordable housing projects in 2019 in Mumbai.
How has the city developers prepared for 2019?
With real estate sector undergoing significant transformation, developers are all geared up for the upcoming year. With many domestic and foreign investors eyeing the real estate market, we expect more positive trends like investments by global investors, revamping of business models and market consolidation which will wash out all the bad elements from the real estate sector and create more trust and transparency in the industry, thus reviving the real estate market. Ruparel Realty too, is expanding its horizons and promoting their projects in overseas markets to attract investors. 2019 is going to be an exciting year for us as we plan to launch a few affordable housing projects in Mumbai.
Do you see any increase in property prices in 2019?
The real estate sector in India has been witnessing prolonged sluggishness over the last few years leading to price correction in key micro-markets. Homebuyers should certainly take advantage of the situation. There are lots of new flexi-payment schemes floating in the market to give homebuyers cooling period for the payment. At Ruparel Realty, we are offering subvention schemes like ‘Builder Subvention’ for the projects which are nearing completion and bank subvention schemes for all the projects. The demand is increasing at a high pace because of the trust and transparency RERA has brought into the industry; also investors are coming back to the industry due to lower currency rate. Other factors high cost of construction, ready reckoner rate, taxes, etc. lead to increase in property prices. If these factors keep shooting up, there are chances of increase in property prices in 2019.
Which areas are the most popular amongst buyers? Are there any upcoming growth corridors that the buyers must target in the coming year?
In consequence of massive infrastructure push by the government to ease commuting in western and eastern corridors of Mumbai, northern region will continue to be at the epicenter of real estate activities in future. Kandivali is becoming the most preferred location amongst home buyers due to proposed New Sea Link between Versova & Virar, implementation of Metro Line 2 and Mumbai Coastal Road (MCR). We see Chembur as future growth corridor for homebuyers in Mumbai. The locality is seeing growing connectivity to the business hubs through The Santa Cruz–Chembur Link Road (SCLR), Eastern Freeway, hence there is demand coming in from the working professionals who are looking at residential investment.
When do you anticipate a complete revival in the real estate market?
The sector has started showing major signs of recovery. With regulatory policies in place, the industry has seen investments from global investors. Setting up of RERA is one step towards building trust and transparency in the sector. Affordable housing too, have got an impetus from the government and various incentives have been announced to promote it. We positively feel India is on the cusp of a new era of manifest opportunities which are paving the way for strong sector growth in the coming years.
How do you sum up 2018 for the city’s real estate sector? What trends can we look forward to in 2019?
Affordable housing essentially was the flavour of the year for real estate and will continue to be in the coming year. We anticipate more green buildings and green spaces coming up next year. Sustainable living is something that developers must now focus on especially, in metro cities where the population is large. Expanding infrastructure along with key government reforms are going to be crucial in giving real estate industry a boost. We look forward to continuous support from the government towards the sector in 2019. We feel that it would be an ideal situation if the government reduces GST even in under construction and commercial projects just as it has been reduced to 8 percent in affordable housing. Also, if stamp duties and registration come under the umbrella of GST, it will reinforce the investment decision in the market. Additionally, reduction of interest rate on home loans will further escalate the purchasing demand.
Source : 99acres