After years of price fall, we have seen home prices continue to rise for the last over 2 years. This is a positive sign as both sales and new launches have been significantly good. The luxury segment too has seen increase in sales and new launches- in fact to compensate for the years of downplay. While we started seeing emergence of positive sentiment translating into robust sales and positive price movement after years of disruptions , we’re however faced with adversity in the form of war, supply chain disruption, inflation, global challenges and rising interest rates.
While affordability levels are still good, the impact of increased selling prices as well as increased interest rates will dent affordability, leading to dampening effects for the industry. Rising interest rates translate into higher mortgage payments for home buyers . However, given the fact that the overall increase in cost of homes over the past 5 years has been negligible, this increase in interest rates can be absorbed by borrowers looking to buy homes. However,the increase in interest rates will affect the cost of borrowings for developers already reeling under severe margin pressure on account of inflation in input costs which potentially will drive up home prices.
At Gera Developments, we have ‘customer-centric approach. We have come up with ‘Home Equity Power’,a novel concept , to relieve customers under financial strain, allowing them to withdraw part of their own contribution paid to us in case of a financial exigency. This is something no developer has done.There are also other firsts to the brand’s credit like the first Metro-connected offices in Pune, the first project built by an all-women project team, Pune’s first shopping Mall, Pune’s first intelligent building. Each of these, is a product , keeping the customer at the core of what we do.
With let’s outdo as our guiding philosophy along with our deeply engrained values of trust , quality, customer first, we as an organisation are driven to challenge the status quo and raise the bar. To keep the customer sentiment high, we keep doing lot of customer-centric innovations like child-centric homes which is an entirely new product category. Just like senior citizen housing is more about managing the facility for senior citizens than just providing homes with handicap-accessible features , child-centric homes in a similar way are all about the organizing aspect.
Real estate is a sentiment-driven business based on trust . Especially in a housing sector , customer’s sentiment holds the key. The more the operational transparency in the real estate business , the higher the trust of the property buyer. Unlike the US which publishes housing data every month, India too needs organized housing data to be disseminated to bring about transparency in the market. The US market though tracks housing starts – there is a basic assumption that the projects get completed in a reasonable period of time. In India on the other hand, there is no guarantee that projects will be completed and there is no guarantee of the time frame, phasing or delivery schedules. As a result, there is no authentic data about the real estate projects in any city in the country. The Gera Pune Residential Realty Report is one initiative to bring out unbiased data to the public. Several such reports are in existence but they are all based on a sample surveys unlike the Gera report which takes a census based approach. The industry can get a research agency to undertake a similar study across markets, gather the data and disseminate it to the public, the government (state, central and local) to make decision making far more efficient. For example, local governments can plan to deploy resources to build infrastructure where projects are being built and more people will come to live in a few years.
Rohit Gera, Managing Director, Gera Developments