It’s too early to predict the future of realty sector: Parveen Jain, President, NAREDCO

Mr. Praveen Jain, President NAREDCOAshvita Singh

India enjoys the position of being the favorite outsourcing destination for global business companies, and their commercial and office demand is going to continue its rise, contends NAREDCO chief. 

There is a negative sentiment regarding the real estate sector post demonetization. At ground level, however, have the realty prices come down?

It is too early to say anything regarding the matter as not even two months have passed since demonetisation. Presently, everyone is busy trying to understand and deal with the prevailing banking situation. The after effects shall gradually start pouring in once the banking situation normalizes. As of now, however, nothing definite can be said.

Granted that it is too early to comment on the finality of situation, what, according to you, is going to be (demonetisation’s) long term and short term impact on property segment?

Looking at the current scenario, the short term impact may be the slight slowdown in the sale and purchase of properties till the prevailing banking situation for people normalizes. However, once the situation stabilizes, the long term impacts might actually be beneficial for the end-users.

The Real Estate sector market has two different segments: ‘Primary’ and ‘Secondary’ market. The secondary market is considered as the resale market. The impact of demonetisation may bring about a slowdown in the resale market while it may give a boost to the primary market. The industry is also divided into the organized and unorganized sector. Here, the impact of the demonetisation will bring more transparency in the organized sector but is likely to be a blow to the unorganized sector, amounting to its breakdown.

Post demonetisation, steps have been taken to manage the economy. Fund flow in banks is increasing tremendously which is going to have a positive effect as far as banks giving housing loans are concerned. It is expected that the bank housing loans’ interest rates may fall due to increased fund flow. This may prove beneficial for the buyers who might show more interest in purchasing property. The low interest rates, if they happen, will create more enthusiasm in buyers.

Has demonetization affected the government’s ‘Housing for All’ project?

Housing for All’ project basically comprises of affordable housing for the masses. This is the need of the hour and shall cater to the mid-segment category. ‘Housing for all’ has not been affected as it is a long-term-ongoing process and the demand for housing will always be on rise irrespective of circumstances.  

How is REITs going to affect the realty sector?

Real Estate Investments Trusts (REIT) is brought to attract investments and ease of doing business in the realty market. Owing to this, the demand might grow on the commercial market front. Also, India enjoys the position of being the favorite outsourcing destination for global business companies like IT, manufacturing, food & health products, clothes, multifarious goods & products industries. These industries need commercial and office space here for their sustenance and the demand for the same is likely to rise even more.

Is RERA well-equipped to bring about housing reform?

The Real estate regulatory act (RERA) is likely to bring in transparency in the Real estate sector and may lead the sector to be able to attract more FDIs. RERA establishes the state authority and allows real estate regulator to govern both residential and commercial realty transactions and by dint of this, it will improve the governance hold on the real estate sector, thereby reducing disputes and making the system more transparent.

The rule of RERA of depositing around seventy percent of funds in a dedicated account shall ensure sufficient funds for the projects to speed up, get completed and timely delivery to the buyers. This is set to improve the feasibility of financing options availability in the market leading to increased investments and propelling more FDIs and thereby making the system more efficient.

Another step of ‘Single window clearance’ should be added in RERA to streamline and simplify the process of getting approvals and clearances for the project at one window or at a single place. This will make things easier and will help in avoiding unnecessary delays in the completion of projects. It will also prove to be a boon for the buyers as they can own their dream homes on time.

Govt has eased norms for securing environmental clearance prior construction. What do you think of the move?

Any step taken in this direction is a welcome one if it streamlines and simplifies the process. The decision will prove to be a great win if it reduces unnecessary hurdles and gets the things done in a more systematic way.

There’s is no denying the fact that this is a tough time for realty sector. How is NAREDCO ensuring transparency between builders and buyers?

NAREDCO (National Real Estate Development Council) works in this direction in the sense that it can put forward suggestions, grievances, problems and other issues of the developers’ community and the buyers in front of the government for the betterment of the real estate sector. NAREDCO is an apex body, a platform where various issues of the developers’ community, end-users and all stake holders can be discussed with the government to sort out the issues and suggestions can be given for the improvement of the real estate sector.

NAREDCO strives to be the collective force influencing and shaping the real estate industry. It seeks to be the leading advocate of developing standards for efficient, effective, and ethical real estate business practices, valued by all stakeholders of real estate sector and viewed by them as crucial to their success. NAREDCO works to create and sustain an environment conducive to the growth of real estate industry in India, partnering industry and government alike through advisory and consultative processes.

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