A large section of people earn between Rs3 lakh and Rs5 lakh per annum. What do you suggest for these buyers?
In my opinion, there is a strong demand for every category of housing and there is something for every kind of buyer. Buyers have to simply look at a few things before opting for a developer. They should look at the quality of construction in other projects, track record of his delivery and capacity to build. If he is building his first project, inquire about the company and the promoters. Seek advice from local real estate brokers. Even lawyers can help you verify the builder’s approval papers issued by the authority.
You were primarily into developing commercial office spaces. Then you entered the residential space. What benefits do you offer to buyers from your experience?
Shakti Nath, chairman and managing director, Logix Group
What we are doing is different in the sense that we are sensitive towards certain aspects of a township and the surrounding environment.
Our townships will have enough green cover. Our projects will also be energy efficient with solar lighting in landscaped areas and rainwater harvesting mechanism in place. These features are usually seen in commercial buildings.
But bringing them to residential projects is a unique feature. Moreover our projects, unlike others, will have ample space for recreational activities.
Your company has project-level funding from equity firms such as Alpha Tiger Property Trust Ltd and TAIB Capital Corp. Ltd. How important is this information for a homebuyer? If a homebuyer knows about the equity partner, does that mean the project is more secure to invest in?
Like I said before, developer’s track record and his capacity to deliver the project on time matters the most. Foreign direct investment (FDI) or equity partner shouldn’t be the criteria for selecting a housing project. In my observation, during the slump that hit the markets globally, not many FDI-funded projects were on track. This happened because most such firms were hit in their native regions. In India too, many FDI-funded projects that were announced in 2006-07 are yet to be completed.
Developers have been demanding extension of tax holiday under section 80(I) B of the Income-tax Act for promoting affordable housing. If the government allows this, how will it affect homebuyers?
Tax holiday is given to developers who build housing for lower income and middle-income group in the range of 1,000 sq. ft to 1,500 sq. ft. Any tax holiday at this point will only boost demand for this category of housing as tax exemptions will help developers to bring such housing in greater numbers. More the supply, lower would be the price levels. This will help people buying affordable houses.
Sales momentum in several projects has slowed. What is your opinion?
Sales and prices in the real estate market are cyclical phenomena. Both slumped during 2008-2009 and now we can see a recovery. An indication comes from the fact that developers are increasing rates. Even we are increasing it slightly. With all this, buyers are cautious now. They now like to wait for the right kind of launch, right kind of pricing in the market.