Vijay Jindal,CMD of 200-crore real estate development company,SVP Group,describes that the talk for a regulatory body in the realty sector has been going on for long now. He says that there is an absolute need of a regulatory body in place as soon as possible as this will help the genuine developers from being affected by the misdeeds of some scrupulous elements amongst them. The Ghaziabad-based developer has developed several landmark projects in the national capital region (NCR) namely Gulmohar Enclave,Krishna Kunj and Krishna Vihar and has a number of upcoming projects across the country.
Excerpts from a conversation with Praveen K Singh:
As a developer,what solutions you propose to revive the industry against the downturn effect?
There are many things that we have to take care of. To tackle the downturn there is a need for a coordinated effort by banks,government and the developers. Only declaring stimulus packages by the government will not be enough,we need to understand that the downturn has made the customer wait for the bottom of the real estate sector. What we need is to tackle this mentality through a slew of coordinated measures. Developers have to understand the pocket size of the prospective buyers and banks have to understand the developers. Banks give loan only after the construction of stilt they dont give money for excavation or the foundation. So,only developers with hordes of money can survive but for making housing affordable,this aspect has to be looked upon.
Have there been ample corrections in the market? Do you think that the realty companies need to further bring down the prices to boost the sales?
Yes,I believe that developers have done their bit in terms of correction. Secondly,to reduce prices of unsold flats is not possible. We need to understand that developers have sold some of these flats in that project and if they sell the remaining flats at lower prices then the existing buyers will feel that they have been cheated. So,no cutting of prices on unsold flats is possible. Price cut can be done on newer projects and that too has happened. All around developers are coming up with affordable projects.
I would like to add that there might be some correction in near future in tier III cities. However,tier II and tier I might not see any correction in prices anymore.
With banks bringing down the interest rates as low as 8 per cent,how will this boost the market?
Lowering of rate of interest will work wonders for the real estate only if the rates for the loan of Rs 25-35 lakh are brought down. Apart from SBI other banks should also come down,SBIs processing time is 45 – 60 days. The fact that only public banks have come forward will not help the market,as most of the buyers look towards the private banks as their processing and servicing is better. So,to really help the real estate sector pick up and help the buyers buy houses all the banks,public and private,have to chip in.
When do you think things will settle down?
That is the most difficult thing to predict. Present situation depends on so many things including job security that is affected by global crisis. So,till the global situation settles it is difficult to predict about only one sector. But we hope that situation will improve in a few months.
With a promise to deliver projects in a stipulated time,several developers have failed to hand over the flats in time. Do you think the industry needs a regulatory body?
The talk for a regulatory body is been going on for the last few years. The regulatory bill is still pending. Yes,the time has come when the real estate sector should have regulatory body. This will help the genuine developers also as they will not get affected by the misdeeds of some scrupulous elements amongst them.
What according to you are the critical issues in front of the industry and what should be governments role to smoothen the process?
Land prices,project clearances,and buyers are the most important issue. Government should come up with steps that can ease out these issues. Land price is the most important thing to achieve affordable housing dream. If government rationalises this factor then we will see more of affordable houses. Apart from that government should also work on density and FAR norms for the developers to give a solid foundation to the dream of middle class to own a home.