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After rattled down by pandemic, realty sector is bouncing back


Angel investor, CEO and founder of Homesfy.in Ashish Kukreja predicts good days ahead for realty business in the post-pandemic phase. Having suffered very badly, he feels that the realty sector all over the world has shown signs of recovery. He says due to involvement of so many litigations regarding land, the buyers are showing interest to invest wisely in branded ventures.

In an exclusive interview to Bizz Buzz, he said many were adversely hit during the pandemic and several development projects were stuck as there was no cash flow. Now the situation is changing, he felt. Homesfy.in is a leading real estate brokerage platform with a presence across the top four cities in India. The firm started a decade back from the ground up, self-sustained, and grew all the way to make a turnover of Rs 2,000 crore in FY22 alone. He said Homesfy has made an endeavour to spur the real estate industry towards value-added professional service where trust and confidence meet convenience and transformational business transactions.

How is the real estate sector post-Covid-19 after seeing a slump during the pandemic-induced curbs for a long spell? Has it bounced back to the pre-Covid-19 level?

The world faced unusual, disruptive changes due to Covid-19, creating obstacles and economic possibilities. To be specific, three significant legislative changes – demonetisation (2016), the implementation of the Goods & Services Tax (2017), and the establishment of the RERA (Real Estate Regulatory Authority) (2016) had already surfaced in India’s real estate sector that led to changes in several aspects. As the real estate market started to recover after the initial shocks, Covid-19 happened. In this scenario majorly affected the real estate sector and development projects were stuck as there was no cash flow.

However, since early 2021, the offtake of residential units has rebounded after a free fall in home sales, and new launches & the demand for housing units increased as people realized the importance of owning a home to feel safe and secure. According to industry players, the sales this year in the top seven cities will probably surpass the pre-pandemic level of 2.62 lakh units in seven significant cities: Delhi-NCR, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad, and Pune but will fall short of the 3.43 lakh units sold in 2014, the greatest number in the past 10 years. Nonetheless, in the recent fiscal year, all major publicly traded real estate developers reported record sales bookings and predicted their sales figures in FY’23 would be much higher.

Affordability has been one of the key elements encouraging homebuyers. The ratio of EMIs to household income has dramatically fallen over the past few years, which gave rise to sales in the three largest housing markets in the country: Mumbai, Delhi-NCR, and Bangalore. Plus, discounts and incentives provided by the developers during the festive season have boosted sales.

Do you think the trend for an increase in interest rates in the United States and subsequently in India will affect the realty business?

While the current winds blow in the direction of the increasing interest rates, there is a lot more pull for the real estate sector considering the overall macro environment. The economy and job market have revived post-Covid. Overall, the near-term view of the sector is favorable. We are not at the end but potentially in the middle of an upward cycle for the sector. One cannot ignore the impact global disruptions have caused on interest rates but customers consider this as a near term issue and hope to cover it up in coming years. Even the builder community is coming up with attractive payment options and affordable schemes that counter this hike. If interest rates start to go close to 9.5 per cent – 10 per cent we will face headwinds.

What segment is witnessing more demand? Is it in the affordable LIG and MIG segments? How is the demand for high-end categories like villas and towers in luxurious gated communities?

In recent times, the focus of potential buyers has switched from affordable housing (homes between Rs 40 to 60 lakh) to mid-range (Rs 80 lakhs to 1.5 crore) and luxury homes (Rs 2 crore and above). The mid-end segment had the most demand in Chennai, Pune, and Mumbai, accounting for nearly 60 per cent of the whole market. Almost 56 per cent of demand in Bangalore was initiated in the high-end market. The need for plots and villas also surged during the pandemic. Affordable options have taken a slight back seat due to inflation and interest rate play outs but in the long run, given the nature of our demographics, our younger generation in the middle-income income group is going to revive this segment.

Will there be any impact of the talk of the slump in the IT and pharma sectors, which offer handsome packages on the real estate market?

While Covid-19 caused tension regarding the stability of jobs in some industries and segments, there is a revived optimism and record a high level of hiring in the sectors that drive the affordable category, such as IT/ITES, the health sector, BFSI, industrial and logistics, and e-commerce platforms. However, the recent response of layoff by some IT giants and the overall global slowdown has created some fear in the buyer’s mind. It would subside if this was a temporary phenomenon, but the global slowdown will bring more severe concerns. For instance, if a scenario similar to a recession occurs, this may be relevant, but this too may pass soon.

What are your plans to make a significant impact by Homesfy.in and MyMagnet.io, another venture run by you, the twin platforms operated after achieving a turnover of over Rs 2,000 crore in 2021-22 after starting from the ground up a decade ago?

Homesfy.in and mymagnet.io together aim to deliver exceptional levels of customer service through talented and well-equipped advisors in the market. The sector has not seen unparalleled work in these areas and this creates a great opportunity for us to make our mark. In the coming year and ahead, we are focusing on enhancing our technology base and expanding our market presence both in domestic and international markets. We want to be one of the fastest homegrown brands in the country and our people at Homesfy along with our agents and partners (Magnets) are committed to delivering this aspiration.

Can you throw some light on your projections for 2022-23?

We are doubling and attempting to take full advantage of the strong markets.

What are the policy initiatives you expect from the government mainly on GST and other main issues to help the real estate sector regain buoyancy?

The real estate sector has done well and the Government can play its part by simplifying GST, keeping infrastructure investments on its radar, and bringing back relief measures or teasers like Stamp duty waivers to appeal to the customer.



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