CEO SPEAK - `With top brands in fray, market will swing automatically
“By granting the real estate sector `infrastructure' status, the government will help the sector get funds at reduced interest rates and collateral values, making housing more affordable,“ Gupta says.
Excerpts from the interview:
HOW ARE THE SECTOR--AND MARKET--POISED?
Opportunities are there for the asking in this sector, which creates millions of jobs and contributes a hefty chunk to the GDP.
If the government takes the sector seriously, the market will pick up fast. A number of big corporates houses like Godrej, Adani, Tata, Bharti, etc, have entered the Delhi NCR realty market purposefully--this shows that there is lot of demand in the market for quality products. This is a good sign. With these top brands in the fray, the market will swing automatically.
This is the best time to buy or invest in property, as the market has begun to respond. Customers must understand that property prices have bottomed out and there is no scope of reduction in prices further. Prices will be stable for some time, then increase.
We have recently launched SG Niwas Housing Yojna for central government employee--retired or working--at Rs 2,590 per sq ft. There is no problem with central government em ployees in timely credit of EMIs, because this salary class always pays promptly compared to other category of homebuyers. The seventh pay commission will have a great impact on the market.
End users can encash on the current opportunities in the market, as developers are promising big offers on their properties and are ready to negotiate in order to release their unsold inventory.
WHAT IS YOUR EXPECTATION FROM THE GOVERNMENT?
The government must review its present tax system. Under this, the first-time buyer gets only Rs 2,00,000 tax exemption for a period of three years. No project can be completed within this stipulated time frame. Such tax exemption limits and period should be Rs 2-4 lakh, and for a period of five years.
A time-bound, single-window clearance system will help de velopers and builders obtain permissions in a simple, timely, and rational manner.
Also, `infrastructure' status to the sector will help de velopers get funds at re duced interest rates and collateral values and make housing more affordable.
The government must focus on infrastructure. Infrastructure is a big worry point. In some areas, developers and builders have already completed their projects and are ready to hand them over, but basic infrastructure is nowhere in sight!
WHO IS TO BLAME FOR PROJECT DE LAY?
In the current market scenario, delay and quality of realty projects is a big con cern. Delay leads to cost escalation and in crease in the base value of projects. So who is responsible for this?
We cannot blame any one agency or in stitution in particular. There are multiple reasons like unnecessary interference by lo cal development authorities, lack of infra structure at the time of construction, and shortage of cash flow. There must be a norm for the local development authorities to create basic infrastructure before the development of a project.
HOW DO YOU SEE THE REGULATORY BILL?
We need a regulatory authority to safeguard the interests of homebuyers and developers. We welcome the Centre's decision to pass the bill--but not in the format recently approved by the Union Cabinet.First and foremost, we want current projects taken out of the purview of the Real Estate Regulatory Authority of India (RERA).
The increase in deposit into escrow account--from 50% to 70%--is likely to weigh on developers. The provision of higher deposit will heap more troubles upon real estate companies, already bogged down by unsold inventories and sluggish demand.
Of course, this bill will bring in transparency to the market, as developers will have to compulsorily upload all project-related documents like site plans, layout plans, etc, on the authority's website. Prior to selling the units, every builder will first have to register their projects with RERA-even brokers will have to register them selves.
YOUR IMPRESSION ON PM MODI'S `100 SMART CITIES' PROGRAMME?
Announcement of 20 Smart Cities in the first phase will boost urbanization and modernization of our town and cities.
Water and sanitation management will play an intrinsic role in establishing these cities as Smart Cities. It will be a winwin situation for all the stakeholders; companies like ours have already established models for integrated water and sanitation, promoting reuse of waste water.
This will lead to a paradigm shift in the living standards of people in urban India and take care of water security. These sustainable models will bring economic prosperity to the society and nation.
As a developer, we look forward to a PPP (Public-Private Partnership) model to replicate our theme in not only providing a healthy environment but a modern lifestyle to homeowners. The development of this concept will help in increasing opportunities for community connectedness and positively contribute to the society at large.