Full Episode: What's happening in Indian Real Estate ? Paisa Vaisa Podcast ft. K Raheja Corp Homes
Summary
TLDRIn 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.
Outlines
🏡 The Debate Between Buying and Renting
The speaker discusses the perennial question of whether to buy or rent a property. He highlights that as a developer, the decision doesn't impact him as sales are sales, but he advises that for end-users, especially in cities like Mumbai, Bangalore, or Delhi NCR, investing in property makes sense over time. He mentions the low yields on rental properties (1.5% to 2%) and suggests that owning property can be a good hedge against inflation. The speaker also touches on the historical context of buying homes in Bombay, noting the significant cash requirements in the past and the current ease of access to capital.
📈 Shifts in Home Buying Behavior During the Pandemic
The speaker observes a change in home buying preferences during and after the COVID-19 pandemic. He notes that three-bedroom apartments are now in greater demand than two-bedroom ones, reflecting a shift towards more spacious living arrangements. The pandemic has also influenced buyers to prioritize open spaces within communities. The speaker discusses the luxury real estate market, emphasizing the inelastic demand from the top 2% of the economy and the importance of developers meeting the high expectations of discerning customers. He also mentions the impact of government incentives like stamp duty reductions and low-interest rates on the luxury housing boom.
💼 The Evolution of Real Estate Business Practices
The speaker reflects on the evolution of the real estate sector, particularly the commercial business, and the growth of Mindspace. He discusses the company's focus on creating homes and the branding strategy that includes sub-brands like Vivaria, Aria, and Vistas. The speaker also addresses the behavioral changes in home buyers during the pandemic, noting the increased demand for home offices and open spaces. He emphasizes the importance of developer reputation and the role of RERA in providing transparency and predictability in the real estate market.
🌐 The Impact of Capital Gains Tax Changes on Real Estate
The speaker discusses the recent changes in capital gains tax and their potential impact on the real estate market. He corrects the previous statement about the tax limit, clarifying that gains beyond 10 crores would be taxed, while anything within 10 crores can be reinvested without tax on long-term capital gains. He speculates that these changes might have spurred a surge in real estate investments, particularly in the luxury segment, but notes that the momentum in the market has continued despite potential concerns about a slowdown.
🏙️ The Future of Residential Real Estate and Redevelopment
The speaker provides insights into the future of the residential real estate sector, expressing optimism about the next 20 years. He predicts that the top 78 cities in India will lead real estate growth, driven by economic development and infrastructure improvements. He also touches on the trend of redevelopment in Mumbai, noting the increasing interest in vertical expansion and the government incentives that make redevelopment projects more attractive. The speaker advises societies considering redevelopment to prioritize a developer's reputation and financial strength.
📚 Recommendations and Personal Interests
In the final part of the conversation, the speaker shares his personal interests, recommending books and music. He mentions enjoying a wide range of genres, from history to fiction, and currently reading 'The Dilbert Principle' by Adam Scott. He also expresses a deep interest in Indian history and classical music, both Western and Indian, indicating a well-rounded and diverse set of hobbies and interests.
Mindmap
Keywords
💡Buy vs Rent
💡Yields
💡End User
💡Real Estate Developer
💡Capital Gains Tax
💡Luxury Real Estate
💡Redevelopment
💡Regulatory Bodies
💡Economic Drivers
💡Inflation Hedge
💡Micro Markets
Highlights
Developers view on buy vs. rent: Long-term investment in property is advisable for end users in cities like Mumbai, Bangalore, or Delhi NCR due to potential appreciation and inflation hedge.
Real estate yields are typically between 1.5% to 2%, but owning property may offer better financial sense over time.
The pandemic has changed homebuyer behavior, with increased demand for three-bedroom apartments and a preference for complexes with more open spaces.
Luxury real estate demand is driven by a discerning, well-traveled segment of the economy seeking top-tier living in India.
Government incentives like stamp duty reduction and low-interest rates have boosted the luxury real estate sector.
End-user demand in the luxury segment is healthy, with transactions closing when apartments are ready, indicating genuine demand without speculation.
Luxury homes are often sold as bare shells, allowing buyers to customize according to their preferences.
Inventory levels in real estate are at an all-time low, with high demand and new launches at a decadal high.
India's economy is growing, and real estate, which accounts for 12-13% of GDP, is expected to perform well.
Capital gains tax changes may have spurred real estate investments, but the demand momentum has continued post-change.
Developer reputation and project location are critical factors for buyers to consider, with RERA providing transparency on developer track records.
The real estate sector is experiencing consolidation, with larger, more reputable developers gaining an advantage.
Access to capital for developers and homebuyers has improved significantly, reducing the need for cash transactions.
Redevelopment is a growing trend in cities like Mumbai, with older buildings and societies opting for vertical expansion.
When choosing a developer for redevelopment, financial strength and delivery track record are paramount to ensure project completion.
Optimistic outlook for the residential sector, with top cities driving growth and infrastructure development supporting real estate demand.
Recommendations for listeners include reading a wide range of genres, with a recent interest in 'Dilbert's Principles' by Adam Scott.
Transcripts
what is the deal between buy and rent
you as a
developer it doesn't make you know any
difference to you whether a landlord
buys your house or an end user buys your
house you know because sale is a sale
but you know if let's say that you in in
your Social Circles family or friends
ask R please help me buy or rent what
would be your answer and let me tell you
an this is not the first time someone
has asked me this question yeah so
apparently when you look at it a rental
seems like a better option given the
fact that the yields on on asset on a
capital asset is between 1 and a half to
2% but at the end of the day if I'm an
end user and I intend to live in a city
like Mumbai or Bangalore or Delhi NCR I
think over a period of time it does make
sense to invest in its own property
black and white okay for the listeners
of course you know Ramesh knows what I'm
talking about but black versus white
there was a time when if you had to buy
a house in Bombay you have to Shell out
like tons of money in cash I'm hoping
that this has now changed access ACC to
Capital today is far more there are far
many more Avenues of raising Capital uh
first and foremost the banks are more
open to organize businesses and they are
more than willing to lend money they're
sitting with ton loads of money not
knowing where to deploy them and they
have fler players or fewer credible
players to actually Park them
[Music]
in ra welcome to P thank you so much for
doing this for our listeners my pleasure
to be here with you on fantastic
wonderful to be here
thank you so just what I you know the
intro that I had tell tell us about K
background projects and what I spoke
about how mindspace is part of this but
it's not part of what you represent well
absolutely I think as K Corp we've been
in the business for over five decades uh
we built most of car bandra Santa Cru uh
residential was what was our bread and
butter for many many decades but over
the years we came to realize that Corp
the commercial business has a
significant role to play and it grew
much larger in size over the years and
over a period of time we became a
significant player in that space and
today we are known by the name or the
brand name Min so that's mpace uh which
we have there and uh it's it's one of
the few rised leads that we have uh in
India today but what we also felt over
the period of time was to create a
separate Niche and a mark for what we
truly represented for many decades ago
which was creating homes for people and
and hence from that respect what we
tried to do was to create a brand called
K Rea Corp homes to primarily focus on
the residential business of uh what we
do so today we as a company are present
in four critical markets or significant
markets for us being Bombay Pune
Hyderabad and Bangalore and very clearly
what we have tried to do is to create
sub Brands which have uh a unique Nish
for itself in the market that we operate
in so we are present in terms of a
product offering varying from 70 lakh
Rupees to as much as around 35 40 crores
and under that what we've created are
unique Brands like vivaria Aria Vistas
Viva and hence we've been more trying to
promote these Brands and build around
that as I would call it as a large
umbrella brand being K Corp homes with
the sub Brands being these all to try
and position ourselves for the various
segments that we operated so you know
you're probably the best person to talk
about homes because like you just said
you cater across the segment could you
just walk our listeners through how
Behavior or behavioral patterns of home
buyers have evolved during the pandemic
because what we saw was a little bit
bizarre till 2020 before the lockdown
hit us you know the real estate industry
across and I'm talking about homes out
here was facing problems like inventory
issues stagnation in prices for a long
time and then a lot of action happened
let's just walk through all of that to
build up to where we are today so I
think a lot has happened and a lot of
things have been learned by all of us in
our individual lives through coid and I
think in a very positive way it's had a
bearing on the real estate sector as
well especially in the home buying
segment uh at a certain point in time
preo most of the developers used to be
conscious about the it size and make
homes according to the same and make
them compact what what the lockdown
taught us was the requirement for that
one extra room which is our home office
and many of us over the 20 24 month
period had to actually force ourselves
to work from home given that we couldn't
step out so I think that has really
changed the way people perceive their
living spaces whether it is within their
apartment in terms of wanting more space
or within their complex in terms of
having Open Spaces to walk around given
that there was a fear psychosis during
the early stages of lockdown of people
having to walk out we've seen that make
a tangible difference in the way people
are making their buying decisions today
and surprisingly at a certain point in
time I used to observe two-bedroom
apartments sold more than the other
category but now I observe three
bedrooms being in Greater demand than
the two bedrooms and those seem to be
moving faster so that's been a very
definite change I see in the buying
preferences of people and in terms of
living in communities that are with more
open spaces and I think that has been
the clear uh differentiator or a
distinct change in the buying
preferences of people during coid and
postco very interesting I want to talk
about luxury real estate now right
because you just mentioned 2025
CR just the number is a little bit hard
to digest but I want to talk in detail
here about two things one where is the
demand coming from and two on on average
have you seen your per square foot
realizations actually go up in this last
year that kind of shows in the broader
theme that we are seeing about Urban
consumption premium products like you
had the dlf project sell in 24 hours
like a billion dollars just boom okay
can we just talk about this a where is
this demand coming from okay and B are
you also seeing this trend so let me
tell you anupam it is you know when we
think of India as a poor country or it's
developing country I wouldn't call it a
poor country the demand for luxury and
the demand for people in that top
segment which probably may be around 2%
of the economy is humongous it's not
honestly catered to also in full and I
guess these are people who are highly
informed travel the world seen
experienced different kinds of service
levels different kinds of products but
their aspiration at the end of the day
is to come back home home is India and
wherever that they live and they want
the best for themselves and their family
uh in this country and I think that
segment is not been necessarily well
catered to even though there are many
developers you can have many many of
them but there are very few that these
customers who have the Discerning
customers if I may say who have an
Insight on what really they want and
there are few who are able to walk up to
that particular level of trust that they
have and hence if you end up seeing in
the luxury space there are very few
successful
developers so this is one aspect so
demand is I would say uh inelastic uh I
would put it in that way but in terms of
real quality of developments that are
there there are very few that can
actually cut up to that Mark and hence
once you do a good job this segment
Works extensively on Word of Mouth and
people also in this segment like to live
around friends and family so a lot of
that word of mouth helps in also ging
and creating communities where they all
want to be living in and I think that
has primarily driven the way the luxury
segment has grown over the last few
years this also comes in the back of the
sector not doing that well for many
years before the lockdown but what
changed during the lockdown were a few
incentives that the government came up
with in terms of stamp Duty reduction uh
that was a substantial saving for many
people who are investing in this space
because you imagine you're buying a 30
CR home and a 3% saving in stamp due is
90 lakh rupees so that was a serious
amount of money that one could save plus
during the lockdown Builders were also
more amenable to negotiating on prices
correct and added to that was also the
all-time low interest rate regime that
existed at that point in time we
probably have never seen a combination
of all that coming together and a lot of
finished inventory that was there which
in a way also enabled these customers to
weave off the GST that they would have
had to otherwi pay for a finished
inventory so combination of all these
factors and the desire for larger Living
Spaces had also resulted in the sudden
boom in the sector many of these people
when I take an example of Mumbai have
been living in South Bombay in
Standalone buildings families growing
desire to live in larger communities and
naturally many of those people were
upgrade customers and we've been
beneficiaries of that just as some of
the other developers across the country
have been in seeeing this upgrade
because most of these people are not
certainly first home buyers they bought
many and over and they are looking for a
lifestyle where they would like to be
living in so today what I see in the
luxury space is not investors I see a
lot of end user demand and that's
healthy because then you are seeing no
speculation and that is genuine demand
and you'll end up seeing transactions
getting closed when the apartments are
ready so that's a significant difference
yeah humor me you know I let's give our
listeners an idea of what a 2025 CR flat
is like you know because I don't think
I'll ever be able to buy it of course I
wish I can I wish our listeners also do
what are these Flats like you know how
big are they and you know do do do they
come with goldplated accessories
everywhere or what so in many instances
if I may say I think this is about
providing better spaces better plan
spaces size of rooms the dimensions of
rooms are not necessarily like the
typical ones that you see in certain
degrees when you also try and build
these kind of highrises people also
provide a lot of home automation
and more than anything it is about the
common amenities that are there within
the complex and the safety of the
building at the end of the day most of
the customers here in the segment don't
want the Builder finishes to be provided
so even if I were to put a goldplated
faucet the customer wants to put a
faucet of his desire of his liking and
so in many instances what we've noticed
is they rip off whatever the developer
provides is that right yes so many of
the apartments in that space
get sold as bare Apartments because of
the unique preferences that the customer
may have for the marble or for the floor
layout or for the fixtures that are
being actually put in the artment so
it's a very different buying process
that they look through but more
importantly as I say it's about
Community Living I mean if they see
their friends their family their circle
of friends moving in they all like to be
together it's like a flock moving
together and they would rather be in
that kind of a space rather than
anything else but one of the key things
that drives there is the common
amenities and the safety features and
the home automation features that are
there provided for within the complex
yeah okay moving back to more realistic
things let's do a quick review of the
real estate markets where you are
present okay because um anaro which also
folks have have been on PES you can
listen to their episode as for anaro
this has been one of the best years for
Real Estate okay um do you you know what
what's your view in that at one point of
time inventory used to be a big issue
with the real estate especially
residential okay and since we only
talking about res residential in this
episode can we just walk through um your
you know review of what where we are
today um how it's looking and then we'll
come to the Outlook part later so anupam
I think coid taught us and I think in
cids we saw the demand sore and I think
that momentum is continued uh postco too
so I think seem to be in good space
today inventory levels are at an
all-time low or when I mean inventory
levels as in overhang are at an all-time
low Less Than 3 years inventory on an
average as you see across the big cities
buying has been at one of the highest I
would say at a decadal high new launches
again have been at a decadal high so
these have been very good times because
you know new launches are being well
received we've seen some bumper sales
performed by some of the very credible
developers across the country we've also
been fortunate in our experience of
making new launches hugely successful
given that there is a demand and I think
that is very clearly there to say this
also augur well given the fact that you
know India Today is A3 trillion doll
economy we are looking and we seriously
seem to be on track to become a five
trillion dollar economy in another two
three years from now all that augers
well and real estate accounts for almost
12 to 13% of that GDP so when the
economy does well real estate also does
tends to do well and Indians typically
have the mentality to save I mean we are
a savings economy very similar to China
as we hear so there is a propensity to
invest in a home I mean that's the first
thing that probably you and I did when
we started working of buying our first
homes and I think that continues today
okay so there are two things here which
I don't know might be temporary drivers
of demand I we are now in May and I I
you know I if you can just help me here
with saying with whether this is Contin
or not driver number one was the change
in capital gains tax which happens from
1 April of this financial year by virtue
of which I think the number is five cres
okay that any capital gains that you
make in say selling shares at one point
of time you could just take the entire
thing invested in real estate and you
don't have to pay any capital gains on
whatever you've sold I believe the
government is now Capital at about five
crores okay so there was one Theory
during the rounds that maybe the last
week of March saw a spurt in high and
Tra state for this purpose and that
might cool down so that's the first
thing and the second thing is you know
some state governments like Maharashtra
especially have given some swops I don't
know where the what the status right now
of those benefits you know whether it is
Stam Duty or whatever was there do you
think you know that was a temporary bump
and going forward you might see a
slightly softer pace of growth or do you
think that there's something more
structural happening here so anupam on
the capital gains it's actually 10
crores what they have actually clarified
uh now so effectively any gains Beyond
10 crores would be taxed but anything
within 10 can be reinvested without any
taxes there on the capital gains on the
long-term capital gain so I think that
did spur a certain degree of closures uh
in FY 23 or by March 23 a lot of those
uh Fen sitters felt that it was probably
wise for them to go ahead and invest and
uh take the benefit of that but as much
as my apprehension was that you know
things may slow down uh we didn't see
that slow down in the month of April and
that's been interesting so the momentum
seems to have carried on may not be at a
macro level but certainly at certain
project levels I have seen that momentum
continue and I think that is my opinion
is here to
stay Supply constraints would remain
given the fact that there are so many
more launches that have come but at the
end of the day it's all about the
Builder's reputation the location of the
project what kind of infr INF structure
is coming around in those areas those
are critical drivers and I think
projects which are well placed that way
would still continue to do well which is
also evident from the way you see many
of the listed companies performances
they all have grown
significantly uh in the last two to
three years so it is effectively when I
see is also a case of demand
consolidation so you will have a
situation where some of the developers
may not do that well but some of the
established names will certainly go
ahead of the pack and that's what is
going to be the key differentiator as I
see in the way the sector is
consolidating slowly but surely it is
happening I want to now that you mention
consolidation I want to talk a little
bit more about this because it's that
you know for anyone who's been in this
industry for long enough or been in if
you've observed other Industries in
India also this whole thing of smaller
to bigger you know operators Builders or
whatever it is players getting nudged
out and the bigger Brands coming in and
you're seeing that happen so well in
Bombay for the longest time you know
maybe a couple of decades ago homes
would not sell just on the Builder's
name they would just sell because you
need a home and you buy it and you get
it wherever you want now apparently at
least as far as Bombay is come because
that's all that I that's all that I see
and you can help me with that this is
happening in other markets
also homes are going as for the
Builder's brand you know and a brand in
real estate is really something new um
that you would not have seen 10 20 30
years ago so this consolidation that's
happening let's just talk about that for
for for a bit so few things have
actually happened and I think it started
off with the way GST came into play and
along the way we also saw the setting up
of rera the real estate regulatory
Authority and the way they wanted to
bring in a certain level of discipline
into the business all these things have
made it more and more difficult for a a
Fly by Night operator to really operate
there's too much level of already it was
a highly regulated sector but beyond
that the level of compliances that is
actually required here now has gone to
another level alter together so what it
has done it has certainly brought in a
greater degree of transparency in the
way business is being done and which was
the need of the r or if I may say the
need of for that for that matter for any
sector to flourish you needed a greater
level of transparency and predictability
of doing business the regulations have
actually brought that even the
development control rules have been
greatly simplified when I say across the
country in terms of how one can look at
how development can take place I think
all these things have aured very very
well and really in a way has brought
about a shift in the way business is
being done with the result the larger
players have found it easier to scale up
and hence becoming better at doing what
they are in a replicable manner as
against a small operator who found it
easier to probably manage the approval
environment but couldn't manage the
entire value chain of construction
selling post sales delivery so on and so
forth which reputed players have
definitely got an up man black and white
okay for the listeners of course you
know rames knows what I'm talking about
but black versus white there was a time
when if you had to buy a house in Bombay
you had to Shell out like tons of money
in cash I'm hoping that this has now
changed and you know any any thoughts on
that I think a lot has changed in my
opinion uh with in the S how business
was done firstly access to Capital today
is far more there are far many more
Avenues of raising Capital uh first and
foremost the banks are more open to
organize businesses and they are more
than willing to lend money they're
sitting with ton loads of money not
knowing where to deploy them and they
have fewer players or fewer credible
players to actually Park them in that
said in addition to that Equity is also
much easily available today private
Equity players today are investing ton
loads of money in India and they see
India as their future I mean China was
the big story earlier today India is
certainly emerging from the shadows of
becoming a significant player and many
people are now looking at India more
favorably and I'm not just saying in
terms of real estate but I'm also in
terms of manufacturing so given all that
capital is no longer a constraint and
then there is capital easily available
there is no need for making any such
Arrangements further to that the
customers also whom we are dealing with
are all looking at raising Home Loans to
buy their homes it's not possible that
all of them have their own access to
Capital to buy it on full Equity basis
so when you see the overall ecosystem
whether it is supplying or access to
capital for development or a customer
who's actually looking for Capital to
buy his home that value chain is well
supported which was not probably the
case a few decades ago and I think that
has changed the way business is being
done and I think it's good for the long
run as I see it yeah okay raes now let's
get into the stuff that is you know that
directly affects our listeners let's
let's say that one of our listeners out
there wants to buy a home okay what is
your checklist of tips or you know some
things that he should look at for inner
developer that will help him to short
list um and choose projects what should
he be looking out for in the developer
in the home you know maybe top five or
top 10 things so first and foremost I
would say is the developers track record
of
delivery of product
quality of the way the developer has
treated their customers in the past and
this information anupam today is readily
and easily accessible thanks to rera all
that information is there and the beauty
of rera today especially Maharashtra
rera they very clearly called out the
black
sheep and developers are very clearly
being named and shamed who have not
necessarily honored their commitments
and that list is coming out so I would
urge all our listeners to actually look
through rera website or mahara website
sure in case they're looking for a
project in a market where they have
identified and they figured out the
ticket size is to their liking they must
visit this website and look out for more
information about the developers past
track record developers ability to
deliver projects because the entire
portfolio is like a drop down you can
pick and you can see what the developer
has done and further to that I think
with the May the social media is if we
can do a little more checks we can
certainly certainly understand how
the developers have treated their
customers and I think that in my opinion
will be the clear point where the
customers should do their homework
before they decide on buying anything
because at the end of the day service
delivery is the key differentiator in
the sector today and product necessarily
is not so because if I provide a marble
someone else also provides a marble if I
provide a world class home automation
technology same things is replicable by
anybody else but what cannot be
matched is the timeliness of delivery
the product in itself as what has gone
into the same and in terms of
compliances you know whether this
project has met with all the necessary
compliances because we don't want a
customer who's putting his hard earned
money to land up into any of the issues
which may be related to the title or may
related to the approvals that have been
obtained in not necessarily the right
way so I would say I think due diligence
on the developer is the most important
thing that one should do and fortunately
today all that information is available
at a click of a
button okay I want to understand between
developer reputation and price okay and
price is again a function of location
okay for a lot of people that becomes a
tradeoff like they'll see a house that
they really like from a really good
developer okay well that's at least 20%
more than my budget okay versus some
other you know house which is within my
budget but
either the location is not right or the
size of the house is you know somewhere
somewhere there's a compromise out there
so when you're faced with such a
situation okay and this is only for end
use by the way okay because we are not
talking about investing at all this is
somewhere that I'm going to stay for
hopefully the rest of my life how should
I you know do this tradeoff what's a
good way to look at it and approach it
so I think you know this is a situation
that we all have faced I I would also
think of early like when I looked at
this was always a tradeoff that I had to
consider but the easier way to deal with
such cases would be to buy or invest in
a ready to move in apartment from a not
so reputed developer rather than going
to an under construction project because
we keep hearing about horror stories
where developers have unable to complete
the project the project is stuck for
years on end so rather than get into
those kind of predicaments it's it's
better that a customer looks for ready
to move in apartment from The Not So
ideal developer that he may want to
invest in and probably pick it up and in
many instances what you also land up
seeing is this inventory is lying there
and the developer who's built it is also
desperate to complete and get out of the
project so you may find a customer
getting a sweet deal out of these
developers too so I would rather drisk
myself if I were in that position today
of investing but I certainly wouldn't
recommend investing in an under
construction project which is 3 years
from delivery because who knows what
happens tomorrow and I think that's the
way I would rather mitigate my risk if I
were in that position yeah so that's a
you know that's that's a golden rule
folks that between a ready to move in
versus an under construction always go
for the ready to move in because you're
getting your product there and I guess
you're also talking about rames out tell
about all the approvals that absolutely
this bit of a gray area but I'm assuming
that the home finance companies kind of
take care of us out here they wouldn't
give a loan to some something that's
kind of shady right you're quite right
Anup I think I missed that point Point
uh the fact yet remains you know today
when you are buying a ready to move an
apartment and you are taking a home loan
the home finance companies do a complete
thorough REI or a check on the title so
in a way that also endorses whether
you're buying into a product which has
the necessary approvals has the
necessary titles Associated to that so
in a way it it does what you need to
actually do your diligence on yes and of
course now you know I want to get this
out of the way because man this is a
really hot topic and I have no idea why
what is the deal between buy and red as
a
developer it doesn't make you know any
difference to you whether a landlord
buys your house or an end user buys your
house you know because sale is a sale
but you know
if let's say that you in in your Social
Circles family or friends ask R please
help me buy or rent what would be your
answer and let me tell you an this is
not the first time someone has asked me
this question so apparently when you
look at it a rental seems like a better
option given the fact that the yields on
asset on a capital asset is between 1
and a half to 2% but at the end of the
day if I'm an end user and I intend to
live in a city like Mumbai or Bangalore
or Deli NCR I think over a period of
time it does make sense to invest in its
own property I say this because probably
real estate is one of the best hedges
for inflation today when I keep my money
in the
bank the value of the money erods over a
period of time given the inflationary
Trends stock market is not where I would
recommend to put downloads of money
because honestly we really don't know
how it behaves real estate has
traditionally been a very safe asset and
given that the way the cities are
expanding how infrastructure is changing
the Dynamics of the
city you have a fairly good chance for
the asset to appreciate and I wouldn't
say this as a guarantee because you can
invest in real estate and see that the
asset is stagnant it can also happen but
if you invest wisely you see the
corridors where the growth is happening
you see the locations where economic
drivers are likely to come or happening
you see the Metros the trans Harbor
Links or a new uh economic Center
emerging in close proximity those are
clear signs for one to go after and if
you are smart you would end up seeing
that these are probably the best uh bets
to invest in and many people have made
ton loads of money in that process so I
would certainly say invest if you have
it also brings in a certain degree of
discipline and at the end of the day if
I earn 100 rupees every month and I know
that I have to put 50 rupees towards my
Emi it also brings in a discipline
systematic investment of your money even
though it may be to pay your home loan
in uh monthly installments but it
certainly brings in a certain degree of
discipline and in a way you are creating
a long-term value for yourself over a 10
15 20 year period so I would strongly
recommend buy a home sure rather than
rent okay rames one massive Trend that
we're seeing in M especially the the
western suburbs okay is
Redevelopment um I don't know whether
Kera cop homes is doing redep projects
but I get this question a lot from a lot
of people that my house is either going
for redevelopment or we as a society are
considering Redevelopment so for someone
who owns a house in a building that is
going for
redevelopment what would be your advice
to this person when they're looking at a
builder and choosing
someone because this is a very it's a
it's a sensitive thing right because
revs normally involve you know for me as
a person who's giving up his house I'm
really going into a black hole I'm
trusting a builder that he will come and
he will deliver the entire project on
time which may or may not happen of
course there's era I agree with that but
lot of things in play of course and
there is a nice big payoff for me also
because there is a corpus that I get
there is rental that I get and there's
extra area that I get so you know give
given these moving Parts what's your
advice out here well interestingly
anupam we've just about started looking
at that space I mean the last year or so
I would say we've been looking at
Redevelopment uh it's not something that
we did for a long time but many of the
societies that we developed in the past
and you're talking about Bombay or I'm
talking about Bombay sorry go on uh
we've seen many of the societies that we
developed in the past have been 40 50
years old and they now see their
families expand and the opportunity of
increased FSI also creating a Temptation
for societies to go for redevelopment so
many such cases have actually now
started coming our way where they want
to continue their association with us so
their fathers brought in and now their
children want to redevelop so saying the
older building was also a Raa proper and
now that wow we've seen those coming our
way so it's a space uh which is
interesting and Mumbai has been seeing
this Redevelopment trend for the last I
would say a couple of decades it's also
the fact given that Mumbai is is a very
old city I mean we've seen uh many parts
of Mumbai over 150 years old and the
other parts closer to 80 90 years old so
there is a trend for going vertical and
that also comes at the expense of
demolishing what is already there and
then building a modern high-rise
structure and the government has also
given a lot of and there are many
incentives too uh for such Redevelopment
to make it a win-win for the developers
and more importantly for the societies
that are going in for
redevelopment coming to the second part
of your question which was what would
what should one Society uh look for or a
resident in a society look for is
certainly the same thing as I mentioned
earlier the reputation of the Builder as
to what has been their track record of
delivery and more than anything is their
financial strength because at the end of
the day come watch me if the markets go
turtle or the markets go south if I may
use the right word would the developer
be in a position to complete the project
on time or not and for that the
developer needs to have Deep Pockets or
access to Capital to ensure that that
project is completed Come What May and I
think that is what a society should be
looking at there are developers who
would be willing to offer much sweeter
deals given the fact that in
Redevelopment The Upfront Capital
involved or invested by the developer is
insignificant as in comparison to the
value of the asset so all the more the
reason that the societies don't get
tempted by these over attractive
proposals that a developer may offer but
go for the tried and tested safety is
better here in this case yeah and you
know that's such a folks you know really
you just want to have a balance between
the What's called the commercials of the
agreement versus the reputation of the
Builder typically both might be slightly
off you know a reputed builder might not
give you the best possible um
commercials as it called like I said
corus rent and extra area but he's going
to give you a finished product that has
a certain value in at the end of the day
because I'm assuming that developers are
also approaching a redev like it's a you
know it's part of their reputation so
they're not doing this as just another
deal on which they can make profit right
I mean well absolutely I think today
what I notice is many of the developers
who have traditionally not necess been
in the Redevelopment space have started
looking at that more favorably that's
also because in a city like Mumbai land
opportunities for a brown Field Green
Field development are very limited so
one has to look at red
and a few things have also changed in
the last one year when I think of it in
the way the rules of the game have
changed for example a lot of this
project were affected by the CRZ Norms
now with the relaxation on those Norms
suddenly there is a new crop of land of
societies that have come up for
development because the project
viabilities have become more attractive
than what they were when the CRZ rules
were different so a lot of those things
have changed and I think that does make
a big difference okay wrapping up this
episode rames what's your Outlook in
General on the residential home sector
and I'm talking about first let's talk
about it generally and then about
specific microm markets micro Market
sorry which look good to you I've been
in this business for 20 years and this
20 years have been phenomenal but I
think the next 20 years is going to be
even better than the first 20 years that
I've seen and that I say this because we
are changing very
rapidly and and I spoke about briefly in
the P earlier in our conversation about
us growing into A5 trillion doll economy
I mean with that you are going to see so
much more happen uh in this space given
that everyone wants a home and I say
this not just for residential I say this
in every aspect of real estate whether
it is commercial the need for hotels the
need for malls the need for hospitals
you name it this country is going to see
it in addition to that we're going to
see significant more infrastructure
development we already are witnessing it
when we see the kind of bridges the
airports the stations the railway
stations the port connectivities I mean
this country is seeing some amazing
level of activity today and I extremely
bullish in the way the sector was emerg
uh in times to come I think the next 20
years are going to be even better than
the first 20 years that I've spent in
this
industry okay and you said that kja is
in Bangalore Puna and Bombay anything
any trends at your witnessing Bangalore
for example is in in its own Zone I
every day you know on social media
there'll be some H some some really
insane stuff about either the rentals
the latest thing I heard was some person
whose marksheet was part of a profile
that is being sent for rent and I was
like bom is much better off that way you
rent you don't get a house because you
didn't get good enough marks in
Mangalore I don't know about that anyway
that's very interesting yeah jokes apart
any Trends in the micro markets anything
that makes you you know that um that you
like to talk talk about so I would say
uh with the economic development in the
level that I am expecting it to happen
the top 78 cities in the country will be
the flag bearers of real estate growth
and I mean the top 78 being Bombay
Bangalore Delhi NCR Puna
Hyderabad Kolkata Chennai these are
clearly the fact barers that I see I
also see tier 2 cities uh emerging as
stronger centers when I would call it an
ahmdabad
jaur uh cities like lakau or kpur
baneswar there is a certain level of
activity where the states are also
promoting a certain level of investment
and that's a a very interesting Trend
you know every state government wants to
promote investment in their state
they're trying to woo overseas investors
to invest set up more employment for
people in their state so I think these
are all very good trends that I see and
with that you will see investment and
with that one would land up seeing the
desire and requirement for homes so I do
see in times to come the Demand only
going up there will be Pockets I
wouldn't say that there won't be over
Supply but this will be micro Market
specific but at a macro level The Strand
is bound to be very robust in my opinion
in times to come okay interesting and
last question my final standard question
to all our guests rames recommendations
um anything good books OT anything that
you want to recommend to our listeners
so anupa my lead all in Sury nice right
from history to palt to fiction into
non-fiction I I love reading them all I
do sometimes for Light reading read up
currently I'm reading a book on written
by Adam Scott on the Dilbert's
principles it's interestingly it's a
satire on uh corporate life and it's
quite amusing today when I've been in
the sector for 20 25 years and I see how
things uh are and how a person like Adam
Scott writes about it and portrays it
with pretty pictures it's it's light
reading I enjoy them all okay uh
anything else you want to talk talk
about maybe you know business history
anything else that you're reading that
you find interesting well I do have a
great level of interest in Indian
history I I do read up a lot and
sometimes you know you see history
repeat itself in a certain interesting
ways when I look at how India was
considered at the time of Independence
that it would the kind of problems that
we saw at the time of Independence a lot
of it seems to be repeating itself even
today but I'm sure and I'm hopeful that
things will change and a lot of it will
also depend on the level of uh awareness
that we all build towards and I think
yeah I I I I'm completely a a student of
History if I may say so I enjoy it I
listen to music right that's another
thing that I thoroughly enjoy uh playing
the instruments or listening to
classical music yeah anything you know
Western classical Indian classical any
favorite uh I think Indian classical any
day for me and Western instrumental
music I think that's something that
within that any composers or I listen to
a lot oh boy there you go folks nice
list of recommendations out there of
course the D principle by Adam Squad
Indian classical Western classical you
can listen to to them all and we are
ending on a note of optimism on our
country and I'm pretty sure that the
world is going to look at us very
differently as compared to when history
was there when we got independent folks
with that that is a wrap on this episode
OFA my guest rames ranganathan CEO okay
Raa cor homes rames thank you so much
for doing this for our
listeners
Посмотреть больше похожих видео
Dr. Hiranandani - The KING Of Real Estate Business Worth 12000 Crores | FO 116 - Raj Shamani
Quite some Mix of establishments in Sector 106 Gurgaon
Ep : 06 How To Start Real Estate Business Without Debt | New Business Idea Series | Dr Vivek Bindra
Sushil Kedia Latest | Sushil Kedia Today | Sushil Kedia CNBC Today | Sushil Kedia Zee Business
April 2024: What Does Capital Gains Mean For Real Estate Investors & Market Update #capitalgaintax
The Demographics of Real Estate Investments
5.0 / 5 (0 votes)