New Delhi, December 29, 2017: Mr. Adarsh Narahari, Secretary CREDAI Bengaluru
The real estate industry over the year 2017 has seen several ups and downs. Some of the positive highlights of the year are:
RERA, which is a landmark act making the industry more transparent and consumer, focused which will improve the standards of the industry. The act aims to make the industry a more organized sector from a relatively unorganized sector.
GST as a uniform tax code across the country helps in sourcing more organized vendors and suppliers who can ensure better product delivery and higher level of compliance
Additionally, there have been huge office space absorptions of about 30 mn sq ft across the country over the year which leads to more employment creation along with their various benefits
Large investments made in real estate with a long term view by large foreign equity funds such as CPPIB ,GIC ,Black Stone etc which is an assurance of the india growth story
The downs for the industry were:
Demonetization – The demonetization of old currency had a perceived notion of real estate prices dropping due to which most customers held back on purchases.
Policy paralysis – Certain states had several changes in policies relating to the process of plan sanction and the timelines associated therein, which made it difficult to get approvals for launching new projects
For 2018 we are expecting recovery for the industry with all the pent up demand coming into play. We are expecting the prices to go up as there have been very few launches in the previous year and a fair amount of ready to move projects
Personally, I expect more corporate players to enter the real estate industry and expect the fly by night players to leave the industry. I also expect more equity investments to enter various real estate verticals such as residential, commercial, retail etc.
Furthermore, I expect the new verticals in the industry such as senior living, student housing and co living spaces to become more mainstream.
Mr. Viswa Prathap Desu, Sr Vice President Sales & Marketing 2017
The year 2017 has been an eventful year for the real estate industry. It saw the advent of GST in lieu of VAT and ST thus creating a temporary ruffle in the business but promising to result in a lower cost for the consumer. We then had the RERA Act being implemented across most of the states. The RERA has been brought in to ensure greater transparency for the end consumer. RERA also created a temporary respite in sales as developers were recouping and customers were waiting for things to settle down. So, as the “dust settles down”, We see the customers coming back in droves.
Brigade Group, as always, took up the leadership position by extending special prices to new customers coming on board post GST and running a special campaign to provide the confidence to customers who were hesitant in investing into a new home. The trust of a big brand like Brigade which stands for “Building Positive Experiences” definitely gives the customer the much needed comfort.
The Year 2018 will be a year with a positive outlook. We expect the real estate prices to start showing a slow but steady increase in the rates. Prices in 2017 have been stable, but now with increased costs(due to implications of RERA etc) and in general increase in the offtake would reflect in prices going up. Quite a few developers including Brigade Group are planning to launch new projects. The current trend of customers to invest in ready to move in or nearing ready possession apartments is ensuring the inventory coming down. This will ensure we get new inventory in the market which will be regulated by the RERA and hence instill confidence in the customer.
In 2018, we also expect the Pradhan Mantri Avas Yojna Credit subsidy scheme to get publicised more by the Financial Institutions and developers. This will help the first time buyer to aspire for a bigger home and with a lesser burden.
To sum up, we hope to have a much brighter 2018 with lot of action and revival of the real estate industry.
Mr. C N Govindaraju, Chairman & Managing Director, Vaishnavi Group
The Real Estate industry witnessed substantial turmoil in 2017. Multiple factors such as demonetization and implementation of RERA & GST impacted the sales of residential real estate. This in turn resulted in an overall increase in the quantum of unsold inventory. 2017 also saw fewer launches and a slew of offers from developers to incentivize prospective homebuyers and thus clear available inventory. There was also a marginal fall in prices in some micro markets.
The positives that clearly emerge from 2017 are:
RERA, being a very customer centric Act protects the interest of the customer while also ensuring developer accountability
The Act ensures that only the credible, committed and long-term players are here to stay. This again works favorably for the customers.
New launches have recommenced from the last quarter of 2017 (calendar year)
In terms of trends and milestones for Vaishnavi Group, there is a renewed focus on strategically located land parcels. Most of the buyers are first-time home buyers and the volume of second-time buyers and investors have come down drastically.
We are intensely focused on developing residential projects that are strategically located and well connected. We are emphasizing on offering the customer right-sized and optimally designed homes with better efficiencies. We will be substantially adopting the latest precast technology which will ensure faster delivery and better quality. Our residential projects will offer thoughtful amenities and superior specifications while being right-priced and therefore offering an irresistible value proposition to our customers.
The following area has been sold and developed by us:
Residential: 600 apartments
Commercial: Approx. 0.4 million sq.ft
The Bangalore real estate market has demonstrated very good resilience. The absorption of commercial real estate continues to be encouraging. The steady demand for commercial real estate will in turn act as a feeder for residential real estate.
Residential project launches will pick up, albeit at a slow pace. There will be more focus on the sales of available inventory. A clearer understanding of RERA and GST by the customer will give them the added comfort level and help in quicker decision making which in turn will augur well for the residential real estate sector in 2018.