Outlook for the Real estate sector looks positive - says Mr Dhiraj Jain, Director, Mahagun Group
Mahagun as a group has established a clear lead over its counterparts by capitalizing on the factors like innovation, commitment to quality, implementing latest technologies and timely delivery of the projects. On an exclusive Interview with Makaan.com Team - Mr Dhiraj Jain, Director, Mahagun Group says that, he believes in looking forward to new challenges and attaining fresh heights to maintain the supremacy of Mahagun as an entity recognized for its innovative techniques and path breaking skills along with a work environment which inspires confidence with its emphasis on safety & security. Lets know more on what he has to say:
1. What is your medium term (9-12 months) outlook for the real estate market in India in general and North India in particular?
The outlook for the real estate sector definitely looks positive. All the announcements done by the new government in realty sector reflects their intention which is bringing the economy back on track. Sentiments of homebuyers too have changed and gap between demand and supply has been narrowing gradually over the last year. This trend is expected to continue in the next six months on the back of a strong recovery in sales volume. With this revised sentiments, we expect new launches in NCR and other metro cities as well as Tier II cities.
2. How is real estate in North India different from rest of the regions in the country?
Out of all the major real estate markets, North India, especially NCR is the most happening and ever expanding market. It is one of the most explored markets as well catering all segments of society. Several big real estate developers have started new housing projects in North Indian cities like Chandigarh, Mohali, Ludhiana, Amritsar, Batinda, Jaipur and Meerut. The market here is today flushed with a large supply pipeline, majority of which is expected to become ready for possession in a 2-3 years timeframe. Targeting mid income echelons in Delhi, Uttar Pradesh, Haryana and the Punjab belt, the majority of these projects are available in a price range of Rs 2500-4500 per sq ft which is not available in any other market. At the same time it has ultra luxury properties worth Rs 10000-15000 per sq ft in Gurgaon. This kind of flexibility has attracted majority of investors to this region.
3. What is your opinion on Luxury or Public Housing? As a developer, which is more sustainable?
There is an increased but calculated focus on luxury housing. On the other hand, the mid-income segment is the most active, as it has acceptable margins and sales speed. The number of units launched in high-end and luxury segments has risen in top cities as there is a lot of demand for projects close to workplace hubs. Due to the high cost of land in these areas, they attract developers focused on premium and luxury housing. Therefore the choice really depends on the location. However, public housing is more sustainable than luxury.
4. Having so many projects completed in Delhi NCR, which of the other cities do you think home buyers should opt for a property purely from Investment purpose?
All the major tier II cities like Jaipur, Lucknow, Ahmedabad, Hyderabad and Patna are growing at a faster rate than the metro and thus promise a better rate of return on investment.
5. The number of unsold inventory is increasing in NCR, what could be the reason behind this? Is the soaring property prices or any other factor attributing to it?
Factors responsible for increased numbers of unsold inventories in NCR are dissuading developers from launching new projects as well as compelling to increase their construction cost due to the guarded approach by banks. It is the crunch in liquidity that they are facing. Perhaps a demand for encouraging policy or slight dip in interest rates is expected to boost realty in Delhi-NCR region in future, causing it to eventually see new launches.
6. What policies you look forward to from the Government and RBI that will be a relief to home buyers across India?
Reduction in interest rates on home loans, lowering the size of FDI in real estate, announcement to develop 100 smart cities and formation of REITs are definite steps that will put the real estate industry on the positive track. This will not only help home loan borrowers save more money but also boost the real estate sector, which in the last couple of years has seen a slump in demand. This will also tempt a lot of first-time buyers at the entry level.
7. What is the current trend in the Commercial Real Estate Market? How are developers meeting the increasing demand of the corporate sector? Which are the upcoming corporate bases?
Today, the trend for commercial development is getting a fillip. Unlike yesteryears, as more and more buyers are interested in buying commercial property for investment, commercial development is indeed gaining momentum. One of the recent trends is the concept of assured returns which started with commercial properties ensuring a buyer to buy and start earning from day one. Therefore, a buyer earns before possession and also multiplies through capital appreciation with time. Secondly, developers are now building projects with global standards suitable to any MNC across the world. They are also offing customisation of the spaces to fit to corporate requirements.Currently these kinds of developments are happening in Noida and Greater Noida region along with Gurgaon and Faridabad. Mohali is also coming up with several options in commercial spaces.
8. What can the home buyer’s expect from Mahagun Group over next 1-2 years?
At Mahagun Group, we have always been into upper mid-segment lifestyle and delivered the buyers with best. In the upcoming year, we are hopeful to introduce NCR with new segment altogether which would offer a customised luxury lifestyle to the niche section.