Q&A on Challenges and Industry demands for Real Estate 2021

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Can we say that 2020 was the worst that real estate has seen, keeping in mind the 2007 recession? What makes you think so?

Any challenge is tough; the focus should be on successfully facing it. To classify one as being ‘worse’ than another, to my mind, does not serve any purpose. If in 2007 we thought this was the worst, 2020 proved us wrong. Again, the pandemic in 2020 is the culmination of existing challenges over the past few years, the impact of Tsunamis on industry, taxation, and economic reforms, apart from liquidity crunch and last-mile funding issues – Covid-19 just exacerbated the already existing set of challenges. Hopefully, the efforts by authorities to overcome the crisis through ‘Mission Unlock’ will also take care of the pending challenges of the past few years, and just as we overcame the crisis of 2007, we will overcome the crisis of 2020.

A multitude of announcements was made that can have a direct or indirect bearing on the real estate sector. How much do you think these announcements will be helpful in 2021?

Announcements create positivity and impact sentiment, the devil is in the detail. Time bound implementation and a comprehensive set of solutions that take a holistic view are a must. The efforts so far have had a positive impact, although there is so much more that can be done. As we move into 2021, the sentiment created will reflect in terms of sales and how economic activity impacts GDP growth, while helping the industry grow.  Some challenges have been given due importance in the announcements, while some still await resolution. So, real estate will grow through 2021, in sync with the economy – hopefully, quick implementation of announcements which will help in the resolution of the pending issues will happen through 2021.

A lot has been talked about the rise of tier II and III cities, which has been the same for over a decade now. How is the situation different for these cities as compared to previous years?

The COVID-19 pandemic has, in a way, worked to the advantage of the real estate growth story in tier ii and iii cities. With a large segment of renters in Metro and Tier 1 cities relocating ‘back home’ as a result of ‘work from home’ and ‘remote location’, tier ii and iii cities are actually witnessing slightly higher demand trends as compared to the previous years. The real estate growth story of tier ii and iii cities in the recent past was large, organic growth in such cities as also the overflow from Metro and Tier 1 cities, the previous ‘trickle’ will probably morph into enhanced demand.

The government has not taken any stand on Input Tax Credit, increasing raw material cost, etc. How do you plan to take these issues up in 2021? Is there any chance that any of these demands can be met in the coming year? 

Industry bodies like NAREDCO have been engaging the authorities in discussions where challenges are being deliberated on and solutions being found. The year 2020 was one where the resolution of many pending issues got delayed, with the situation stabilizing and with the vaccine marking its presence, many of these pending issues should get sorted out – and soon.

What are your other demands from the government that can help the sector prosper?

Over the years, some issues have remained unresolved – such as time-bound, single-window clearances; rationalization of taxes, duties, cess and levies; better coordination between central and state government agencies, issues relating to Goods and Services Tax (GST), among others. There have been some really good announcements made by authorities during the pandemic; the hope is that these will get due extensions so as to ensure a proper revival of real estate.

Buyers of the residential segment have already worried about the decreasing unit sizes, however, post-COVID the reports say buyers are looking for bigger spaces. How do you think realtors can work on this aspect and yet keep the prices in check?

The price-points are higher in city centers; the COVID-19 buying trend is not just about larger sized houses, but also in locations that are verdant green and have open spaces. In such locations, which are mostly located in peripheral areas, the price points are not as high as city center price-points. Given this, there appears to be no major problem for home seekers in the post-COVID-19 world


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