“For homebuyers, the year 2019 is not expected to be any different from the last few years. Prices are likely to remain stagnant, and developers will continue to focus on clearing existing inventory rather than launching new projects,” said Avneesh Sood, Director EROS Group in an exclusive interview with RoofandFloor.
Here are the excerpts.
What are your expectations from NCR’s real estate market in 2019?
2018 was a resuscitating year for NCR’s real estate market. Housing sales increased as the developers focused on completing their existing projects rather than launching new ones. The performance of the subsidies under Pradhan Mantri Awas Yojana (PMAY) also acted as a catalyst for improving buyers’ sentiments. These factors, coupled with the regulatory reforms, made the sector more transparent and accountable. The momentum is expected to continue in 2019 as well.
Also, the lowering of GST rates and industry status to affordable housing helped in improving the homebuyers’ sentiments.
With election results coming in the next few days, we except the new government to bring in new reformatory changes that will have a long-term impact on the sector.
How did Q1 2019 pan out? How are the sales trends looking for now?
When compared to last year, the first quarter of 2019 was good. The implementation of the Real Estate (Regulation and Development) Act (RERA), 2016, exemption of inventory tax from one to two years in this budget, and rationalisation of Goods and Services Tax (GST) are some of the significant factors that have enhanced the current stakeholder sentiments.
“I feel that the current sentiment score has inched five points upwards from the preceding quarter and remained positive during the first quarter of the new calendar year.”
What are the pricing trends in NCR?
Over the last two to three years, the property prices across the country have been broadly stagnant. And NCR is no different.
Reasonable pricing is crucial for housing demand. That said, we tend to see both move together. Once there is an increase in demand, the prices start to step up.
How about the unsold inventory?
The liquidity crisis further aggravated by the NBFC issue has caused mayhem in the industry and 2019 will continue to see its spill-over effect. Even while various reforms strove to eliminate unscrupulous players from the ecosystem, the issue of stalled projects needs to be seriously addressed by the government, or else the recovery of the residential sector will remain compromised.
If developers continue to focus squarely on their core business, remain customer-centric, and launch the right products at the right prices in 2019, the residential segment will gain traction. Else, the sector will have to solely rely on petty sops offered by the government to intermittently boost sales.
What are homebuyers buying in Delhi NCR?
2 and 3BHK housing units are the most preferred choice of homebuyers in the region. Nowadays, people are more interested in buying an apartment as compared to villas or builder floor apartments.
While buying a property, buyers in NCR are looking for the following:
Walk to work culture – Buyers these days prefer to buy a property which is close to their workplace to save time and money in their daily commute.
Locality: For some buyers, location is of prime importance. They look for a safe neighbourhood with schools and hospitals in the vicinity.
Appreciation potential: For investors, the appreciation potential of the project, as well as the locality, matters the most.
What will be the impact of the upcoming general elections on the real estate sector in NCR?
Development projects initiated ahead of elections are at times shelved by the new party or have to face the brunt of a lack of funds, resulting in years of delay. Besides, many times, ongoing infrastructure projects get stalled as they fail to avail adequate funds from institutional investors who adopt a more cautious stance during the run-up to the elections. This may result in subdued infrastructure growth over the next few months.
As India is waiting for the election results, the real estate sector is bound to experience some disruptions. Developers, too, refrain from new projects announcements until the new government is formed and policies become clearer.
Trends that will define NCR’s real estate market this year.
For potential homebuyers, the year 2019 is not expected to be any different from the last few years. Prices are likely to remain stagnant, and developers will continue to focus on clearing existing inventory rather than launching new projects as they continue to grapple with regulatory changes.
2019 is going to be yet another tough year for real estate developers, given the ongoing liquidity problem, owing to the NBFC crisis and the new government in the centre.