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  • Anuj Puri - Chairman & Country Head, JLL India

    Anuj Puri

    Chairman & Country Head, JLL India

    DATE: October 26, 2015, 12:00 PM

    SUBJECT: Is the worst yet to come for Indian real estate?

    PF

CHAT CLOSED. READ TRANSCRIPT BELOW

  • MODERATOR:

    Hello and welcome to a chat with Mr Anuj Puri, Chairman & Country Head, JLL India on whether the worst is yet to come for Indian real estate


    ANUJ PURI:

    Hello


  • R

    RAM

    What factors are likely to lead to a rebound in residential real estate? When is do u think RERA bill will be passed?

    ANUJ PURI

    There is no doubt that by and large, selling prices must come down before any significant revival can take place. Reduced interest rates alone are not sufficient. Also, pending policy initiatives such as the Land Acquisition and Real Estate Regulatory Bill must be finalized and implemented. The Indian real estate market is still giving off signals of uncertainty for foreign investors. Though investments are coming in, the passing of these bills would open up a floodgate.


  • B

    BALASUBRAMANIAN

    This question pertains to the real estate bill 2013 that is pending for passing by the parliament. The penalty for agents, with reference to section 54 is 5% of the project/ flat cost (FOR VIOLATION OF PROVISIONS OF SECTION 10) whereas the agent's remuneration by the builder is hardly 2% of a flat that he sells. Further what is your view on section 10 (c) 1 A? Is this anomaly an outcome of poor drafting of the bill given the disproportionate penalty that seems to be inconsistent with the principles of natural justice? 2. Were stake holders consulted at the time of drafting of the bill? 3. Is it possible to amend this clause and make it proportionate to the remuneration of the agent before parliament passes this bill?

    ANUJ PURI

    Stakeholders were definitely consulted during the drafting of the RERA's latest versions. The problem is that the level of consultation has not been deep enough. In its present form, the Bill still reflects a lack of deeper understanding of all the issues that are pertinent to the sector. However, there are also indications that a greater depth of understanding and consultation with industry bodies is now in effect. In fact, this can be one of the reasons why the final implementation is taking so long. We are all hoping for the best


  • P

    PADMANABH

    Many experts feel that the Mumbai real estate market is likely to correct upto 30 percent on the back of unsold inventories? Would it be advisable to wait or book one flat at prevailing prices? In case there is a correction how much lower can prices go down further?

    ANUJ PURI

    Let me be blunt - it is never advisable for a buyer without sufficient market knowledge and without the risk appetite of a seasoned investor to try to time the market. Corrections, if they do happen, do not happen at a city level, but at a project and micro-location level. To wait for prices to come down across the city is not wise, because quite a few locations are seeing healthy sales and will therefore not correct. The right strategy is to identify suitable options, approach developers and negotiate for the right price. You would be surprised by how much good can happen with this approach


  • A

    AJIT

    I am looking to buy a house/plot/apartment on the ECR road in Chennai. Will it be prudent to wait a couple of years, for the price to further correct?

    ANUJ PURI

    Chennai is one of the most stable and the least volatile residential real estate markets in India. I would not advise you to wait for a correction, especially in this corridor. The state government is expected to complete the four-laning of a 33.5-km section on the East Coast Road (ECR) between Akarai and Mamallapuram by March 2016. The reduction in travel time along this stretch will attract buyers in search of beach homes, villas and high-rise apartments. This will cause prices to rise. Also, the development of social infrastructure including cinemas, hotels, educational institutions and hospitals in the IT corridor on the Old Mahabalipuram Road is also attracting demand from end users and investors.


  • R

    RAKESH

    Affordability is the biggest issue as of now. In last 5 years prices have almost trebled in Pune.This may be true for other metros also. So which regions can the middle class can now look at for owning a decent home in any of the top 6 cities in India?

    ANUJ PURI

    One has to understand that appreciation is a natural and desirable phenomenon on the real estate market. If it did not exist, nobody would invest in it. Appreciation is a sign that a market is healthy and growing. In a growth scenario, end users and investors will always find opportunities in emerging corridors of cities. This is true for Pune and all other markets as well. The other thing to look for is the degree of financial pain that developers are in. If there is sufficient evidence that such pain exists, they will be ready to negotiate on their prices even if they do not officially announce rate cuts.


  • R

    RAJ KUMAR KANODIA

    Will the reduction in interest rates on home loans by banks have any impact on current residential real estate scenario?

    ANUJ PURI

    Reduction in interest rates does bring about a more positive sentiment, and will have an impact on buying behaviour in markets where affordability of properties is not a massive issue. In cities and regions where prices are unaffordable, reduced interest rates will not have much of an impact.


  • P

    PRAVEEN

    When do you think a common man in india can take an erring builder to task . Almost 95% projects in NCR are stuck up and their is no solace for we comman man. What legislations are needed in order that the common man who invests his lifelong savings in buying a house is not harrassed in terms of getting possession on time or escalation in costs by the builders as the project nears completion?

    ANUJ PURI

    The current environment is one of buyers getting into a lot of activism, and pressure on developers - especially in the NCR region - has gone up tremendously. The authorities are taking note of grievances, and the courts have become very supportive of buyers. This is already a vast improvement over previous times. However, I agree that the scenario is still less than optimal for buyers. In my opinion, only the implementation of the Real Estate Regulatory Bill can have a sweeping effect on the market. Until then, buyers must continue to do the highest levels of due diligence and choose their projects wisely


  • R

    RAMESH

    Dear Sir, would like to know particularly about Mumbai, frequently read the news that there will be correction in the realty market; but since more than 8 years yet to see builders lowering their prices. Am interested in Mulund area, like Wadhwa atmosphere project, what is your opinion for above project @ 23,500 psf on carpet basis?

    ANUJ PURI

    Residential property prices in Mumbai are currently stagnant, but new launches are already being sold at reduced prices. This can be seen as a correction of sorts. At the same time, one needs to keep in mind that developers have their backs against the wall financially, which is why they are not reducing prices in ready inventory.


  • S

    SANDEEP RAI

    Already market is in a downturn and is it likely to continue for long? Is the commercial segment likely to perform better in comparison to residential. What is your view?

    ANUJ PURI

    Commercial real estate is already picking up, and is performing better than residential. I would say that this is a clear indication that the worst is over. We have seen in the past and this is a well-known market fundamental - that when office space absorption picks up, residential demand also comes back, albeit with a slight lag. We can hope to see a good improvement in the overall market in the next six months


  • P

    PARAG

    Since prices in Mumbai suburbs are out of my reach, I wish to purchase a residential property on the peripheral areas. Which are the top locations I can look at including Navi Mumbai?

    ANUJ PURI

    Kharghar is a very good investment destination now. In previous years, this area had become overheated and there was a lot of opportunistic supply and speculative buying and selling. Now, it has once again become stable and there are many growth drivers. You can also take a look at options in Ulwe in Navi Mumbai. This location offers relatively affordable homes with decent growth prospects. There are also good options available in Airoli, Koparkhairane and even New Panvel


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