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Post Government Punches, Now Its Time For The Brokers To Punch Real Estate Developers

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Post Government Punches, Now Its Time For The Brokers To Punch Real Estate Developers

The year 2017 has not been good for Real Estate, but this is not the story we want to narrate here. Government in its attempt to bring transparency in realty sector, has done all it could. Those watching closely can certainly predict a bright future for the people, who are in for a long run. But future can only exist, if the developers are able to sustain these turbulent waters for some more time from here on. GST, Demonetization, RERA and probable news of taxation on unsold inventory has not turn out to be good. But amidst of all, the most affecting factor is the ‘perception’ of realty sector taking a hit and hence creating a fear of market escalation. In this anticipation, we have witnessed a slump phase for the maximum part of the year. For a city like Mumbai, though there was a reduction in the real estate prices, some places have managed to maintain the cash flow. Marginally or significantly, all depending upon the position of the developer.

What really alarming in this similar phase is rise of the brokers segment at many places and their tactics to worsen the situation by taking undue advantage of developers with distress properties. In past this segment has always played a crucial role, working hand in hand, with the developer fraternity. Until a phase arrived, where web aggregators like, Housing.com almost announced the demise of the segment in India, to this new resurging part, has been a roller coaster ride. What this segment is not realizing that they exist because of these developers and not vice versa and, now in this new endeavour, they have intentionally or unintentionally have declared a war against the developers.

Post Government Punches, Now Its Time For The Brokers To Punch Real Estate Developers

On one hand all the developers are busy getting their approvals in place and their respective teams busy convincing the customers on why their prices are right. But on the other hand, these brokers themselves have started a full blown blitz of word of mouth with customers convincing them about the bad times and realty prices have dropped. They also don’t want developers to be trusted but want themselves to be trusted instead, so as to extract maximum leads with minimum expenses, showcasing discounted rates of already discounted inventories. Creating negative buzz for the whole industry and giving false hopes to the customers, that prices would fall, eventually getting them to book houses and properties. As of now, their motives would be solved but in the long run, due to the heavy discount offered by the developers, it would eventually compromise them on the quality. Thus making no money and eventually customers ending up with a dream home, nowhere closer to their dreams.

This is not just affecting the industry and the real estate developers they are associated with, but also with the customers who are involved. Here are few screenshots received by us from one such broking firm, which has made some good buzz for itself, ensuring a great quantum of lead generation. They probably might have been sitting with database of home seekers, just for the sake of few short term gains. Eventually these tactics might not help them in surviving. The surety of their existence in the market is not at all probable. But the Industry and the developers in majority, trying to play a fair game, honestly working towards delivering the dream homes to their customers are at big loss.Now is the time, when the industry needs to stay united and give mandates to all its fraternity members so that they can show resilience. Eventually no one will benefit out of it, in a long run. So we at REALTY NXT, condemn such practices and wishes the developers to come out with a mandate where such practices must be avoided.

Special Reports

2018: A Horizon Full Of Opportunities

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2018: A Horizon Full Of Opportunities

Taking up a roller coaster ride, the Indian real estate sector has gone through some big changes in 2017. Be it a regulatory reform like RERA or an introduction of a new taxation system, GST, the market has seen various trends during this phase. As on one hand these changes brought the market to a standstill, they also brought the long awaited transparency and accountability on the other hand. RERA has brought the developers in line and made sure that the deliveries are on time and transactions are totally transparent. Protecting the buyer’s interests, this will be an essential factor for a higher growth in coming future.

This effect has resulted into a large number of unsold units, bringing down the prices. This excess supply of units has brought the buyers, a luxury of choosing the properties of their choice at their budgeted prices. It is believed that now this phase of the real estate market is ruled by the buyers and will continue to do so for some time.

New home launches across various cities of India have dropped to a significant level in the third quarter of the current fiscal. Nearly the third of a calendar year shows a drop of 40 percent in the overall number of project launches.  This graph predicts that the demands will slowly gain momentum and the prices will start picking up.  As builders have begun to focus on finishing their current projects as soon as possible.

The excess liquidity in the banking system have led the RBI to lower down the key lending rates. The home loan interest rates went down from 9.5 percent a year to 8.3-8.4 percent. That invites for a considerable savings in the EMI costs; enabling the consumers to take advantage of low-cost home finance, and buy a house of their own. In 2018 it is expected to continue on the same path.

After the revision of the carpet area for the Middle Income Group (MIG) category under the Pradhan Mantri Awas Yojna (PMAY) scheme, the affordable housing sector might see a jump in sales. Carpet area saw an increment from 90 sq m to 120 sq m in MIG-1 and 110 sq m to 150 sq m for MIG-2. Giving the middle income home buyers a bigger and better houses. Taking the cue, the developers are now catering to this special segment in order to clear out the stock of unsold units.

Following the trends, there is a prediction about merging of the real estate sector in 2018. The toughened RERA laws will push the non-complying companies into a merger with the bigger players. Eliminating the delay and other setbacks, the consumers will be more protected, hence elevating the level of confidence. The Foreign Direct Investment (FDI) will be boosted further, making Indian real estate a global market. The smart city initiative by the government will also enhance the social and the economic infrastructure of the many upcoming cities.

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2017: A Significant Year In Real Estate

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2017: A Significant Year In Real Estate

The year 2017 has been very influential in witnessing a ground breaking transformation as many major events impacted the real estate sector. Looking back at the eventful period and its influence on the market.

With untapped potential and an unlimited possibility of investment, the real estate sector has always been the foremost choice among the masses. Fast investments always provided with a guaranteed return. In the year of 2017, real estate sector saw some of the most challenging reforms ever introduced. The monetary flow took onto a slumping rate as the potential buyers and investors opted to wait for a better opportunity.

Real estate in India went under a big transformation, beginning with Demonetization in 2016, taking away the cash out of the transactions. It changed the way, developers use to work earlier. The affordable housing segment got benefited as compared to the luxury housing segment because it consisted of the consumers, who were dependent on home loans for transaction. Dropping of interest rates further added to the growth of affordable housing. After the introduction of Benami Properties Act, later in the year we saw the entry of RERA, reducing the number of selling units lesser than the last year.

The real estate sector stumbled upon the initiation of the implementation of the Real Estate Regulation & Development Act (RERA). On the brighter side, this landmark law brought the much awaited transparency and accountability in the sector, hence making the developers fall in line.

Then came the implementation of Goods and Services Tax (GST), which resulted in a major slow-down in terms of real estate sales. Only applicable to under-construction projects and hence making ready-to-move-in apartments exempting from the GST. But the extra cost on these projects will be charged to home buyers on the sale price, while the developers can avail this credit only on the cost of construction. Paying the GST on the full project, the input availed is only on the construction cost so there may be a gap of nearly 30 per cent. Therefore, developers aimed for hiking the prices to fill in that gap.

“Government introduced policies like RERA, amendments to the Benami Properties Transactions Act and GST are changing the very face of the realty sector. The real estate has seen failure till now, but these regulations have been crucial in bringing more transparency in the sector and confidence among the buyers”, says Atul Banshal, President- Finance and Accounts, M3M.

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Realty Nxt Interviews, Mr. Dhaval Ajmera, Director Ajmera Realty At CREDAI MCHI

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Realty Nxt Interviews, Mr. Dhaval Ajmera, Director Ajmera Realty at CREDAI MCHI

RealtyNXT brings you an exclusive interview with Mr. Dhaval Ajmera, Director Ajmera Realty and Infra India Ltd, at the CREDAI-MCHI Maha Property EXPO 2017. He reveals the reason behind the success of Ajmera Group and how it has surpassed the competition. Owing foremost to their legacy of five decades, providing projects more than 20 million sq. ft. among the metro cities across the nation. He gives credits to experience and the deliveries they have been making, the prime factors in leading them to a desired domain in real estate sector.

Talking on the recent initiatives like Demonetization, RERA and GST, taken by the government for the real estate sector, he sheds light on their deep effects on the real estate after this sector took a hit. He acknowledges the consumer’s awareness regarding the low dipping of the market. But also advices the customers to invest now, as the present market is about to rise. He expresses high hopes for RERA because it has brought the long awaited transparency in the real estate. Helping the buyers to take a confined decision after a full research on the project. On the other hand, he claims that the market will take some time to get over the effect of GST as it has provided a setback for the projects mostly above Rs 10,000-20,000 per sq. ft.

Talking on the CREDAI-MCHI EXPO 2017, he praises the franchise for bringing in the biggest crowd real estate sector has seen, around 20,000-30,000 consumers attended this year’s Expo. According to him, it turned out to be a great platform to showcase one’s projects to the market. After the RERA and GST, the buyers are getting more informed about the market and hence the expo has provided them an interface to get access to serious business.

Inspiring to become one of the top developers in India, Ajmera Group is currently diversifying by spreading its projects in various cities of India. Expanding and diversifying are the two prime initiatives that Ajmera Group is looking forward to, in the next year.

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