Demand for RE in the NCR is high and growing across all segments.

Nayan Raheja

- Executive Director, Raheja Developers

Real estate sector has taken a severe hit in the last few years due to the various policy decisions taken by the government. The Covid pandemic seems to have worsened the situation. What are the peculiar challenges of the sector in Delhi-NCR particularly in terms of construction activities/ finance, etc.

Increased tax sops for home purchases should be considered by the government, as this would have a positive impact on the overall economy. To create a win-win situation for all parties concerned, other states should follow Maharashtra and Karnataka's lead and reduce stamp duty.

How has the challenge of rising pollution levels impacted the real estate development? What measures are being taken in that regards?

Despite the fact that Mumbai is prone to flooding during the monsoons, property prices have remained unaffected. According to recent research, vast coastal swaths of Mumbai will be permanently flooded by 2050 due to increasing sea levels. Despite this, investments continue to flow in, and the real estate market does not seem to be slowing down due to environmental factors. Pollution is hazardous, but it is also a less noticeable element with no immediate consequences. Pollution has the unfortunate propensity to become an accepted characteristic for city dwellers. The demand for real estate in the NCR is high and growing across all segments and sectors - office, retail, manufacturing, logistics & warehousing, and housing.

This is not to suggest that the pollution problems in Delhi-NCR have no bearing on real estate decisions. Grade A office buildings with cutting-edge HVAC and air purification systems, and housing projects with similar amenities but more green open space and environmental features have a competitive advantage.

Tell us about the rise in circle rates and how will that affect the sector in terms of demand and sales.

Rather than raising circle rates, the administration can enforce an additional tax liability in cases where the difference between market price and circle rate is greater than 20%. Any rise in circle rataes would hurt the real estate market, which is recovering from the COVID crisis. In all of our experiences with investors/buyers, we've come to the conclusion that they're looking for relief. Currently, the developer community is using all available resources to assist buyers in realizing their dream of owning a real estate asset, but the community requires government assistance.

There are a lot of stressed properties in Delhi-NCR with little appetite with most of the developers to takeover the projects which are either stuck in or under IBC.

There is a significant overhang of stressed or stuck inventory in the real estate market. It has accrued over time and is not a one-time occurrence. Despite healthy real estate demand and economic growth that outperformed most developing and major economies around the world, stressed real estate lingered and exploded over time. In several markets, gradual new launches outpaced demand, causing market imbalance. Furthermore, in recent years, the NBFC crisis and liquidity crunch have made it extremely difficult for developers to collect funds and capital. The Covid crisis has exacerbated the developer community's problems.

Your take on the SWAMIH fund and how far has it helped developers. As a developer, are you looking at any such properties?

To aid developers in completing stalled affordable housing programs, the government must double the amount of stress fund available. The SWAMIH fund plans to produce its first completed apartments in 2021, providing a model for a crisis that has wiped out the savings of tens of thousands of homeowners and bankrupted developers. Managers are faced with issues such as dealing with businesses at the bottom of the food chain, which have lost staff, and some still don't have a finance team, making due diligence difficult. There are also pending legal proceedings and compensation demands from home buyers.

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