We expect the current fiscal to end with a fairly robust demand especially for ready homes.

Prashin Jhobalia

- Vice President, Marketing Strategy, House of Hiranandani

Can you brief us about about the peculiar challenges of Bengaluru real estate and how has Covid disrupted the sector?

Bengaluru, called as the city of millennial, is one of the most promising city with an extremely high potential for growth.

In the past two decades Bengaluru has witnessed rampant urbanisation and fast growth which has created ocean of opportunities for all. Hence, any challenges that the city may be confronting currently in the form of rapid infrastructure development, saturation of residential development in certain locations, traffic congestions are only teething issues which will be resolved once development reaches to the maximum.

Onset of Covid-19 pandemic has aggravated the challenges and changed the real estate dynamics drastically.  The demand for ready to move-in apartments in  modern residential townships has risen sharply as millennials now have realised the need for having a home equipped with all amenities and essential facilities. On the other hand, the supply side of homes has gone down as strict curbs during lockdown has reduced the pace of  new real estate development.

There has also been a sharp increase in the prices of raw materials like steel, cement etc which has impacted the pricing of the final product. This has put the real estate developers in a catch-22 situation, as on one hand their margins are shrinking due to rise in prices of raw materials and on the other hand  any rise in housing prices will demotivate prospective buyers to buy due to the existing  unfavourable and uncertain  economic conditions The prevailing uncertainties have also affected decision making of real estate investors.

What according to you are the measures that are needed to be taken by the government to boost sales in the current times?

The government has been closely monitoring the impact of Covid-19 & framing various policies to help the real estate sector recover from the pandemic impact and boost growth. However, much more needs to be done to achieve the desired growth.

Some of the measures that will help are:

Reduction in raw material pricing: Fluctuations in the rates of raw materials have a direct effect on the production and development of residential projects.  Increase in raw materials prices  coupled with shortage of labour is aggravating the scenario for the real estate sector.

Enhanced liquidity support for developers: Real estate is a capital intensive industry  and lack of industry status makes it difficult for developers to access funds with ease and at low cost and. Providing liquidity support will give an impetus to the developers and help them in timely completion of their projects

Reduction in stamp duty pricing and statutory charges: Recently, when there was a reduction in the stamp duty rate in Maharashtra, we saw a large number of property registrations. The real estate industry witnessed some really interesting growth figures and many investors also saw this as a lucrative investment option.

Maintain the stance of low interest rates for benefit of home buyers: Low interest rates for home loans have always enticed home buyers and investors to invest in real estate. The pandemic has also resulted in change in preference for an owned apartment over a rented one. Low interest rates thus act as a booster for retaining the demand momentum. Further, measures should be taken for reduction in raw material prices so the new supply of homes comes at a reasonable rates for buyers.

With most of the population working from home now, what is your take on the prospects of commercial office space / IT space absorption and what will be the near time challenges? Also, has WFH had any impact on demand pattern for residential properties

The Covid-19 pandemic has revolutionized the concept of physically reporting at work to just logging in from any location and yet being able to carry out all the work. Due to WFH, the demand for commercial spaces is muted, however, we are hoping that things will improve once more people are vaccinated. After the second wave of Covid-19 subsiding, offices will start opening up and the future will be a combination of old & new normal ways of working.

New office spaces are being planned with more spacious layouts, more space for IT infrastructure, contact less access & operations, safer & hygienic work environment, in-house cafeterias and recreation facilities, which all put together will in turn mean increased demand for office space.  So, one may a see a dip in demand for commercial /IT space in short term but as situation normalises and growth picks up, we may see restoration of demand for  this real estate segment

The current pandemic certainly has a noticeable impact on the demand pattern of residential properties. We may see a fall in the demand for houses in standalone, small to medium size residential apartments. Simultaneously, we see a rise in the demand of apartments in housing complexes, integrated townships that are fully equipped with all modern amenities. At House of Hiranandani, we keep in mind our customer needs and have built homes which are spacious, provide good ventilation, sunlight and are safe too. Residents can set up their home office separately or have online schooling of a child without feeling the cruch of space. Use of smart furniture also enables to utilise the available space to the maximum.

How do you see the current fiscal ending in terms of demand, new launches, sales as well as price appreciation in Bengaluru?

During the first lockdown, industries had come to a standstill as no one was prepared for such an unpredictable situation. People did not know how to carry out the day to day functioning without office, no alternatives were available as compared to the situation seen now. Today, sectors and industries are adapting themselves and the Government is also proving financial aid, framing policies for sectors to recover. With Covid cases declining, we hope the lockdown to open up soon enabling businesses to bounce back. Though the road to recovery is going to be full of challenges, as predicted by experts, just like last year,  we expect  to have a V shaped economic recovery starting from July onwards.. With the festive season coming up, it is expected that the demand  for properties will go up. We are looking forward to have new launches once the situation is better and growth momentum picks up.  We expect the current fiscal to end with a fairly robust demand especially for ready homes with pricing  maintaining a steady trend with support from Government measures.

What are your plans for the fiscal in terms of project pipeline, launches and investments? Are you looking at acquisition or JDA/ JV model for growth?

We have plans for new launches in the days to come. During this lockdown, we have taken efforts to understand the buyer behaviour and understand their preferences. At House of Hiranandani, we are trying to incorporate the additional workspace required during WFH or quarantine requirements in our apartments and projects in cities of Chennai, Bengaluru, etc. As the time progresses, we will take appropriate decisions pertaining to joint ventures, etc.

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