Panaji (Goa) With the real estate markets across the country having bottomed out, the future of the construction industry looks promising in the near future, a senior industry expert has said.
Rohit Gera, Managing Director of Gera Developments Private Limited and Vice President of CREDAI Pune, said that many of the indicators across the real estate market in the country are now showing signs of market having bottomed out.
“Over the last few years there has been a correction in prices this has been followed by continued lower levels of demand. As a result of the implementation of RERA, the number of projects being launched has gone down consequently the total inventory for sale has reduced,” he said talking to PTI at the sidelines of an event to launch company’s childcentric project ‘River of Joy’ near Panaji.
Gera said that for the real estate buyers, in terms of affordability when looking at the drop in prices in real terms and comparing people’s affordability three years ago versus today after factoring in some amount of salary increases as well as the reduction in interest rate, the overall affordability equation looks extremely attractive.
“In light of these factors it is expected that the real estate sector would see a turnaround in the foreseeable future,” he added.
Responding to a question on impact of GST on the industry, he said the new taxation has “certainly impacted the industry since it is in addition to stamp duty at a rate of 12 per cent as compared to 5 per cent plus one per cent when it was service tax and VAT respectively.”
“This additional seven per cent burden has certainly been dampener to home buying across the country,” he added.
Gera said that smaller service providers and vendors find the process of registration and updating of data cumbersome and as a result obtaining the pass through benefits is proving challenging.
In the current circumstances, he said the luxury segment has been most affected out of all segments. “Most luxury home buyers already have an existing home and are amongst the savviest investors across the spectrum. There is no urgency for them to buy a home and when things look difficult in the market they are the first to take a decision to defer their purchases,” he said.
Speaking about Goa, he said that coastal state is already a destination for premium homes with a demand from across the country for holiday homes.
“As mentioned earlier the luxury segment is highly cyclical and therefore once the sentiment in the customer segment for luxury homes changes we will see the demand return to this segment in Goa,” he stated.
Gera currently has four projects which are underway in Goa.
The real estate industry giant said that “those cities which have vibrant job creation will see good demand for homes.”
