Interest rate increases in view of the current RBI move will eventually affect overall acquisition costs for homebuyers and may dampen residential sales to some extent. The impact would be minor; but in fact, the cost for buyers would rise as monthly EMI outflows increase, says Subhash Goel, MD, Goel Ganga Developments.
In an exclusive interview with Sanjeev Sinha, Mr Goel talks about the latest trends in the real estate market and shares his business outlook. Excerpts:
How do you see the real estate market growing and the development space changing in India?
One of the most well-known industries in the world is real estate. Housing, retail, hospitality and commercial are the four sections. This sector’s expansion is well supported by the expansion of the corporate environment and the demand for office space, as well as urban and semi-urban accommodations. After the agriculture sector, the real estate sector employs the most people in India. This sector is also expected to attract more non-resident Indian (NRI) investment, both short and long term. The real estate industry is becoming more organised. There has been a significant improvement in the product, quality, design, and delivery timelines, fostering trust and transparency among developers and buyers. Residential property demand has increased as a result of increased urbanisation and rising household income. India is one of the top ten fastest-rising housing markets in the world.
What is the scenario of luxury residential housing in India?
It is a thriving market, as dual-earner couples have increased household purchasing power. Given the flexible work-from-home culture, larger balconies, and self-sufficient project amenities, post-pandemic homeowners are looking for space upgrades, and the luxury realty market in India is set to explode in 2023. After resolutely recovering from the pandemic’s suffocating effects, it has seen spectacular growth, exceeding market expectations and attracting the attention of several high-net-worth individuals.
With the recent hike in the repo rate by the RBI, what would be the impact on prices with respect to real estate? How much percentage increase can we expect in the market?
Rising interest rates and inflationary trends in basic building materials such as cement, steel, and labour costs will add to the financial strain on the residential sector. Interest rate increases will eventually affect overall acquisition costs for homebuyers and may dampen residential sales to some extent. The impact would be minor; but in fact, the cost for buyers would rise as monthly EMI outflows increase.
Under the current scenario, which of the two – under construction vs ready-to-move-in property – is being preferred by investors?
As we all know, nothing interesting is ever completely one-sided: there are always positives and negatives, and the decision will be based on a variety of factors such as what the buyer is looking for, his needs/requirements, and whether he is buying for investment or end-use. End users prefer ready-to-move-in, while investors prefer under construction because it allows them to take advantage of launch offers and prices offered by developers.
What are your immediate expansion plans keeping in mind the boom that the real estate market is witnessing?
The residential market is performing exceptionally well, while the commercial sector is expanding at an exponential rate. One of the key factors driving real estate growth is good infrastructure. Improved connectivity via railways, air, and roads, as well as proximity to medical facilities, educational institutions, entertainment hubs, retail markets, business centres, schools, and retail outlets, among other things, drive up real estate prices because it is one of the most important factors for a buyer when selecting a property. With the government focusing on infrastructure reform, the real estate sector can only expect an increase in demand for quality housing.
At Goel Ganga Developments, we have more than 13 million sq. ft. planned in the near future across our portfolio of Residential, Commercial, Education and Warehousing.
What is the USP of your upcoming luxury residential housing projects?
Goel Ganga Developments has always been known for its prime locations. The premium location facilitates higher ROIs on the property for homeowners while also fetching higher rentals for investors. All of our projects are designed with a well-supported social infrastructure in mind, allowing for easy access to a family’s needs such as groceries, malls, multiplexes, schools, colleges, hospitals, workplaces, and excellent connectivity. We have a specialised team focused on identifying, planning, and implementing the highest quality specifications and construction technologies to give our product a competitive advantage in the market.