Dhaval Ajmera, Director, Ajmera Realty & Infra India Ltd, sheds light on CREDAI-MCHI’s aims and objectives for the real estate sector, and the transformative trends ushering in a bright future.
By Nichola Marie
The Confederation of Real Estate Developers’ Association of India (CREDAI) – MCHI, has written to finance minister Nirmala Sitharaman with their concerns over the impact of the goods & services tax (GST) being levied on rehabilitation apartments being built and given back, free of cost, to existing occupants as part of redevelopment projects and has requested a change in GST structure to ensure the viability of redevelopment project. Is there any update on that?
The delegation from CREDAI-MCHI, led by our visionary president, Boman Irani, had a pivotal meeting with the Hon’ble Finance Minister, Nirmala Sitharamanji. The objective was to navigate the intricate GST-related intricacies and set a course for a brighter future in the real estate sector.
During this crucial meeting, various multifaceted issues affecting the real estate industry were discussed. The delegation addressed three primary concerns. First, there was a request for a nuanced exemption of GST on the rehab component. Second, an emphasis was placed on redefining the criteria for affordable housing, liberating it from the existing ₹45 lakh cap. Lastly, options for developers to choose between the assessment scheme and the composition scheme on a one-time projectwise basis were explored. Smt. Sitharamanji assured the delegation that she would present these matters before the esteemed committee.
Which segment among residential, commercial, retail, and recreational do you see as demand drivers?
In the dynamic landscape of the real estate sector, the demand drivers reflect an evolving consumer preference for integrated living spaces. While all segments hold their significance, the residential sector remains a pivotal driver, catering to the burgeoning needs of India’s growing middle class. This demographic’s increasing purchasing power has led to a notable preference for developments that offer a comprehensive living experience.
Integrated living concepts are swiftly gaining traction within the residential sector, with homebuyers gravitating towards properties that offer a holistic living experience. This trend is marked by a strong inclination towards developments that encompass not only residential units but also an array of state-of-the-art amenities. These amenities range from integrated office spaces and educational institutions to healthcare facilities, recreational parks, and retail complexes with multiplexes.
The emphasis on integrated living underscores the growing demand for convenience, accessibility, and a balanced lifestyle within residential communities. This trend reflects a shift towards a more inclusive living environment that fosters a sense of community and convenience for residents. As the real estate sector continues to evolve, developers are actively responding to this demand by creating vibrant living spaces that cater to the diverse needs and aspirations of the modern Indian homebuyer.
Metro cities or Tier 2 and 3 cities – where do you see bigger growth coming from? The evolving landscape of the real estate sector is witnessing a significant shift in demand dynamics, marked by an increased preference for properties located in regions boasting robust infrastructure. This trend is particularly prominent in the burgeoning demand for real estate in Tier 2 and 3 cities, highlighting the growing allure of these locations among homebuyers and investors.
While metro cities have traditionally held the spotlight as prime hubs for real estate development and investment, the emergence of Tier 2 and 3 cities as key contributors to the sector’s growth is a notable trend. These cities are experiencing a rapid transformation, characterised by the development of essential infrastructure, improved connectivity, and a burgeoning economy. The presence of robust transportation networks, enhanced connectivity, and a growing industrial and commercial landscape have propelled the demand for real estate in these regions.
The promising growth trajectory of both metro cities and Tier 2 and 3 cities presents a wealth of opportunities for developers and investors alike. While metro cities continue to be hubs for diverse economic activities and investments, Tier 2 and 3 cities are gradually carving their niche as promising real estate destinations. The evolving landscape in these cities is indicative of their potential to become key drivers of the real estate sector, offering a conducive environment for sustainable development and growth. As the real estate sector continues to diversify and expand, the increasing focus on Tier 2 and 3 cities underscores their rising prominence in shaping the industry’s future landscape.
Buyers prefer established brands in effecting their home purchase decisions as they are extra cautious about delivery. Do you see consolidation taking place in the sector as residential developers who are unable to deliver as per the stipulated deadlines will either look for exits or partner with established players?
The residential sector is indeed witnessing a trend toward consolidation, as developers increasingly recognise the benefits of collaborating with established brands. Consolidation enables developers to leverage the expertise and credibility of established players, enhancing their project delivery capabilities and boosting customer confidence. This strategic approach contributes to the overall stability and sustainability of the real estate sector, promoting better outcomes for both developers and homebuyers.
Despite the increase in property prices, along with repeated repo rate hikes, real estate in 2022-23 performed pretty well. So, will the momentum continue in 2024 as well?
The real estate sector’s resilience in the face of challenges, including price fluctuations and repo rate hikes, underscores its adaptability and robustness. While 2022-23 exhibited promising performance, the sector remains cautiously optimistic about the momentum carrying forward into 2024. Factors such as evolving market dynamics, policy interventions, and economic indicators will shape the sector’s trajectory, and we are optimistic about the sector’s continued growth in the upcoming year.
What kind of an impact has RERA had on the realty sector since its enactment?
RERA has had a transformative impact on the real estate sector since its implementation, instilling a heightened sense of transparency and accountability. It has significantly enhanced buyer confidence, leading to increased trust in the sector. RERA’s emphasis on fair practices, timely project delivery, and the protection of buyers’ interests has streamlined operations, leading to improved project execution and a more regulated real estate environment. This has ultimately contributed to fostering a more vibrant and sustainable real estate ecosystem.
There was a lot of talk at Natcon 2022 about how we are seeing a steady stream of launches. But don’t you think people are still hesitant to invest in underconstruction projects?
While there may be concerns surrounding investment in under-construction projects, we are witnessing a gradual shift in buyer sentiments due to the sector’s increased focus on transparency and compliance. With the implementation of RERA and the industry’s commitment to timely delivery and quality construction, we are confident that buyers’ trust will continue to strengthen. Developers are actively addressing these concerns by adopting customer-centric practices, which will further bolster confidence and encourage investment in under-construction projects.
According to you, what does 2024 have in store for the real estate sector?
In 2024, the real estate sector is poised for dynamic growth and transformation. We anticipate an increased emphasis on sustainability, technology integration, and customercentric practices. Policy measures aimed at fostering a conducive environment for growth, coupled with innovative project designs and improved infrastructure will drive the sector’s evolution. The sector’s resilience and adaptability, combined with evolving consumer preferences, are expected to pave the way for a thriving real estate landscape in 2024, characterised by sustainable growth and enhanced customer experiences.
