Gera Developments has delivered several projects that have become landmarks in their own right. The company has spread its footprint across Pune, Goa and Bengaluru and has strong plans to develop about 8.6 million sq. ft. in 2018-19 across these locations.
Replying to Yash Ved of NewsBarons, Rohit Gera, Managing Director, Gera Developments Private Limited informed “The average size of homes launched has dropped drastically”.
NB: How was the year gone by for 2017?
Rohit: 2017 will go down in the history of Indian real estate as the year that changed the sector forever. The year started in the aftermath of demonetization with wild speculation and predictions that prices would correct 30% to 40% across the country. This as expected put a stop on new sales.
The government however did try to promote the real estate sector by loosening some of the conditions around the tax-free scheme for affordable housing. This along with the inclusion of middle income group into the category of people who can avail of the interest subsidy from the government pushed developers to reconfigure their product mix towards more affordable housing. As a result, the average size of homes launched has dropped drastically.
NB: What has been the impact of RERA and GST act?
Rohit: The of the Real Estate Regulatory Act (RERA) ensured delivery to the customer a priority and simultaneously made certain that the developers, who would earlier launch a project with virtually no capital, now require financial strength and capability before entering the business. This led to a cleaning up of fly by night operators and the introduction of GST will further streamline the supply chain of developers and bring many small-time contractors and vendors into the GST net.
India has improved on the ‘Ease of doing Business’ rankings put out by the World Bank but the one category that barely moved was the ‘Ease of dealing with Construction Permits’ where the movement was from the rank of 185 to 181. The government is determined to reach the rank of 50 and, therefore, one can certainly expect an improvement in dealing with construction permits, which will further streamline and professionalize this sector, in the near future.
NB: What outlook do you see for real estate sector?
Rohit: For the real estate sector to actually start seeing a good momentum of sales, necessary to raise the overall GDP of the country, there needs to be a stable tax structure and tax regime. The current chatter around taxing the unsold ready inventory with developers further leads to instability in the mind of the home buyers. This causes further deferment of the decision to buy a home. This is detrimental to the industry and the economy. As RERA settles down and the economy recovers from the impacts of demonetisation and GST, one can expect better days for the real estate sector in 2018.
NB: What is the total area under development?
Rohit: We have a total area under development of about 2.8 million sq. ft. and for FY18-19, we are eyeing total area under development of about 8.6mn sq ft.
NB: How many projects are you planning to launch?
Rohit: We currently have 3 projects which are in pipeline and planning to launch 7 more projects for the next year.