Jitendra Mehta, Chairman, JVM Group and President, CREDAI MCHI Thane, lists the reasons why he expects rising growth through 2024 – and beyond, in the real estate sector.

By Nichola Marie

The Confederation of Real Estate Developers’ Association of India (CREDAI) – MCHI (Maharashtra Chamber of Housing Industry) has written to Finance Minister Nirmala Sitharaman with their concerns over the impact of the goods and 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 viability of redevelopment projects. Is there any update on that?

Given the challenges that the situation results in – new flats are given to existing residents from the old building for free, and yet a notional value is taken and GST is levied on the same. It doesn’t sound logical and impacts the viability of some redevelopment projects. Given this, we at CREDAI MCHI Thane support the move of CREDAI MCHI in raising the issue with authorities and as we understand, concerned officials are going through the representation. CREDAI MCHI Thane is looking forward to a quick resolution of this issue – and on a positive note.

Which segment among residential, commercial, retail, and recreational do you see as demand drivers?

Over the years, my experience has been that residential is the segment that majorly drives demand – not that the other segments do not, but residential is usually ahead of the others. Going ahead too, I see the same continuing in Thane and the Mumbai Metropolitan Region (MMR).

Metro cities or Tier 2 and 3 cities – where do you see more significant growth coming from?

Going ahead, in a post-Covid world, it should be Tier 2 and 3 cities that have huge demand and ongoing projects that can meet this demand – so I would look at bigger growth trends from Tier 2 and 3 cities.

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?

In real estate, over the years as also in the present, on-time delivery is the important factor that helps create a brand. Real estate developers have understood this, and in CREDAI MCHI Thane, we have seen our members stressing on this aspect, as they go about the process of creating a brand. In situations where a project gets delayed, the regulatory norms safeguard the home buyer – MahaRERA is excellent in this regard. In Thane and the MMR, it is rare – although not entirely impossible – to see a situation where there are multiple delays in possession across projects of a single company, to the point that buyer confidence is impacted. In such scenarios, each company will have its unique set of challenges and, while consolidation is the obvious solution, some may find exit as the better option, while others may find partnering with established players an ideal alternative. So, it will differ from company to company, based on their situation.

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?

Housing is a basic need, and demand and supply will always be the factors driving price trends. During the pandemic, we saw some changes in demand trends for housing. Now, we are seeing other changes, and the demand/ supply ratio in certain geographies has impacted prices. There are highs and lows when it comes to demand for certain segments/ types of homes, and the market trend also shows that home buyers are booking homes in under-construction projects. This, despite the hike in home loan interest rates. So, the future definitely looks positive, in terms of momentum in 2024.

What kind of an impact has RERA had on the realty sector since its enactment?

It has enhanced transparency in property deals, as also accountability on the part of developers, which translates into a win-win for home buyers. Confidence levels among home buyers are high, and ensuring safe and secure transactions is the biggest impact.

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 under-construction projects?

In Thane and the MMR, we are witnessing a good quantum of bookings when it comes to underconstruction projects, so I would say there is no hesitation while buying a home in under-construction projects.

According to you, what does 2024 have in store for the real estate sector?

In Thane and the MMR, I foresee growth trends in sync with changing customer preferences, as well as changing market trends and scenarios. Customer is the focus, and homes are being created in sync with their changing requirements. Redevelopment will be the next big story on Thane’s real estate scene, and we should see rising growth through 2024 – and beyond!