The land is a limited resource – grab it before it diminishes. True that the length and breadth of land on earth are measurable and will not change. Little did we realize that there is a possibility to go vertical where the sky is the limit.
Leveraging brought in the facility for people to invest and buy real estate by putting in small amounts from their pockets.
“ plot kharido flat kharido dukaan kharido kyonki real estate mae invest karne se dher paisa banta hai “
People started investing left-right-center with an idiotic assumption that you invest in real estate and it gives you big returns.
This resulted in inflation since the supply could not keep pace with demand in real estate.
The developer, financer, investor, and customer started investing in industry most with a perspective of making money and remaining for self-use.
Developers started hoarding land with equity of NBFCs and PE funds and also private investors. Big lots of 50-100-200-300 acres.
“ zameen bandh lo , fir nahi milegi “
Look at the same barren lands lying all across the length and breadth of the country – UNPRODUCTIVE. Yamuna Expressway and Dwarka Expressway are some areas where land was consolidated in large chunks by the developers and now the same land is a reason for the developers becoming insolvent. This further led to financial mess within the NBFC-PE space leading to defaults which are now not manageable
An industry which is the second largest employer after agriculture and also contributes to the tune of 7 % in country’s GDP is in massive stress and along with itself has put the financial-legal system and the customer in total pain
Marketing essentially requires that the product is presented to the customer in the form and shape he can understand meaning that the customer sees that as a tool that will fulfill his need or desire.
However real estate marketing has taken a different tangent – Instead of talking about the product or its attributes it attempts to fool the customers’ minds by various ways some of which are listed below
If you buy at the start of the project your money will double on possession – this is a common spiel which the developer and the sales team use. I AM NOT SURE HOW WE ARRIVE AT THESE PREDICTIONS. If this was not enough we started
ASSURED RETURN & LEASE GUARANTEE.
Keep confusing and fooling the customer.
A product which should sell at Rs 4000 / sqr ft is positioned at Rs 7000 / sqr ft with a lollipop of Assured Return and Lease Guarantee
My submission is if the product is right it will sell at Rs 4000 / sqr ft why are you taking a liability which is difficult to honor
Idiotic Marketing ideas did not help sell inventory leading to a cash flow crisis.
Go to Google and ask what is the total housing shortage in India? you will find different figures starting from 20-to-25-to-30 million houses.
If an industrialist takes this as a data point for making an investment decision he will not find a better industry to invest in. And that is what happened in the last 2 decades – there was a noise in the market that there is an extreme shortage in housing and people started pouring in money.
The developers started consolidating land in urban regions and planning and constructing 3-bedroom, 4-bedroom apartments. A glut of housing is created and we see dark buildings with less occupancy. All investors and only a few end users.
Where did we go wrong?
The challenge is that the data may be correct but the presentation of data is what matters. The housing shortage is in EWS and Low-cost housing whereas the supply is in mid-segment housing.
Unfortunately, the industry which boasts of contributing to the tune of 7-8% to Indian GDP doesn’t have any legitimate trustworthy database which could table segment-wise demand and supply be it commercial, retail, residential, or industrial.
In absence of data, it is on developers’ hunch that the business decision is made which goes right or wrong based on market sentiments.
The real Estate Industry needs to be more transparent at the top of the pyramid at the regulatory level to create researched databases and supply based on such data
Idiotic Data has baffled each participant in this industry …” Bhagwan Bharose”s