Full Episode: What's happening in Indian Real Estate ? Paisa Vaisa Podcast ft. K Raheja Corp Homes

Summary

In this insightful discussion, Rames Ramanathan, CEO of K Raheja Corp Homes, shares his views on the real estate market, emphasizing the importance of developer reputation, project location, and customer service. He advises on buying vs. renting, highlights trends in luxury real estate, and provides tips for potential homebuyers. Ramanathan also discusses the impact of government incentives and the future outlook for residential real estate in India.

Takeaways

• 🏗️ The developer's perspective on buy vs. rent is that while it doesn't affect sales, for end-users, investing in property in growing cities like Mumbai, Bangalore, or Delhi NCR makes sense over time due to potential appreciation and inflation hedge.
• 📈 The real estate market has seen significant changes with behavioral patterns of homebuyers evolving during the pandemic, favoring homes with more space and open areas, and a shift in demand from two-bedroom to three-bedroom apartments.
• 💡 The luxury real estate segment in India has a robust demand from a small but wealthy segment of the population who seek premium living spaces and are not necessarily well catered to by the market.
• 🏢 K Corp, a real estate company, has diversified its portfolio by establishing sub-brands like Mindspace, Vivarea, Aria, and Vistas to cater to different market segments, reflecting a strategic approach to brand positioning.
• 🌐 The real estate sector has been positively impacted by government incentives, stamp duty reductions, and low-interest rates, especially during the pandemic, leading to a boom in the luxury segment.
• 🏘️ Homebuyers are now prioritizing features like home automation, community living, and safety features within complexes over extravagant individual apartment amenities.
• 📊 The Indian real estate market is currently experiencing low inventory levels, high demand, and a trend of consolidation with larger, more reputable developers gaining an advantage.
• 🛡️ For buyers, the reputation of the developer, their past delivery record, and financial strength are crucial factors to consider, especially in redevelopment projects where trust and reliability are key.
• 💼 Access to capital for both developers and homebuyers has improved significantly, reducing the need for under-the-table transactions and promoting transparency in the real estate market.
• 📚 The importance of due diligence when choosing a developer or project cannot be overstated, with RERA providing valuable information on developers' track records and project compliances.
• 🎯 The outlook for the residential real estate sector in India is optimistic, with expectations of growth in top cities and an increased focus on infrastructure development across the country.

Q & A

What is the primary factor one should consider when choosing a real estate developer for a home purchase?

The primary factor to consider is the developer's track record, including their history of delivering quality projects on time, their treatment of customers, and compliance with regulations. This information is accessible through RERA and can provide insights into the developer's reliability and reputation.

How has the COVID-19 pandemic influenced homebuyers' preferences?

The pandemic has led to an increased demand for homes with additional space, such as an extra room for a home office. There is also a preference for communities with more open spaces for walking and outdoor activities, reflecting a shift towards healthier living conditions.

What are the key differences between the pre-pandemic and post-pandemic luxury real estate market?

Post-pandemic, there is a greater demand for larger living spaces and community living with better amenities and safety features. Additionally, there is a focus on end-user demand rather than investment, leading to a healthier market without speculation.

What incentives did the Indian government introduce during the lockdown that benefited the real estate sector?

The government introduced incentives such as a reduction in stamp duty, which provided substantial savings for investors, and a low-interest-rate regime that made loans more accessible and affordable.

How has the real estate sector evolved in terms of access to capital for developers and homebuyers?

Access to capital has significantly improved with banks being more open to lending and private equity players investing heavily in India. This has reduced the need for cash transactions and increased the availability of home loans for buyers.

What advice would you give to someone considering a home purchase for end-use versus investing in real estate?

For end-users, it is recommended to invest in a property, especially in growing cities, as it serves as a hedge against inflation and can appreciate in value over time. For investors, it is crucial to consider the location, economic drivers, and infrastructure developments in the area.

What are the benefits of choosing a ready-to-move-in apartment over an under-construction project?

A ready-to-move-in apartment reduces the risk of project delays or abandonment. It also allows buyers to immediately occupy the property and avoid the uncertainty associated with under-construction projects that may take years to complete.

How does the reputation of a real estate developer impact the decision-making process for homebuyers?

A developer's reputation is a critical factor as it reflects their ability to deliver quality projects on time and adhere to customer commitments. A reputable developer is more likely to provide a better experience and a higher value property in the long run.

What is the outlook for the residential real estate market in India over the next 20 years?

The outlook is very positive, with expectations of growth driven by India's economic expansion, infrastructure development, and the increasing demand for homes in top cities and emerging tier-2 cities.

How does the trend of redevelopment in older buildings affect the real estate market?

Redevelopment trends contribute to the market by providing opportunities for vertical expansion in older, densely populated cities. It allows for modern high-rise structures to replace older buildings, meeting the growing demand for housing and improving cityscapes.

What are some of the challenges and considerations for individuals or societies considering redevelopment of their properties?

Individuals or societies should consider the reputation and financial strength of the developer, the project's viability, and the potential impact on their living conditions during the redevelopment process. It is also important to ensure that the developer can complete the project despite market fluctuations.