The year 2018 could well be regarded as the ‘Year of Affordable Housing’. Aided by key reforms of RERA, GST & Benami Transactions Prohibition Act ‘ and further supported by Government’s policy initiatives like Credit Linked Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (PMAY) have given a big push to affordable housing, leading to the revival of residential real estate.
Global Signature, that has established itself in the affordable housing domain in a short time, made significant contribution in boosting this high potential segment. Pradeep Aggarwal, Chairman, Signature Global, speaks about the resurgence of affordable housing and its role in reviving real estate. Discussing the prospects of real estate in 2019, Aggarwal talks about his company’s future plans, especially its blueprint in 2019. Excerpts:
Question: How do you look back at the performance of real estate in 2018, particularly the hard-hit residential real estate?
Answer: After two years of turbulence and subdued realty, it was a rewarding year for the sector, with a spotlight on housing. As key reforms of RERA and GST settled in and their short-term disruptive impact was greatly eliminated, residential realty witnessed signs of revival, with affordable housing in the driver seat. This, despite the fact, that the sector faced liquidity crunch precipitated by NBFC crisis which has now been contained to an extent by the Government’s pro-active policy measures.
As it was a year of end-user driven realty, developers realigned their working strategies in line with the real demand. And as a result of that, there was a healthy uptick in new launches, with rising affordability leading to pick up in sales, especially in high potential affordable housing segment.
Another factor which gave a fillip to residential realty this year was developers’ focus on projects completion and delivery. As a result of this, there was substantial inventory of completed, ready-to-move projects in the market. This was lapped up by home buyers as they were not only saved from risking their investment in under-construction homes but also saved considerable GST of 12 per cent in standard homes and 8 per cent in affordable housing.
Q: How do you see the role of reforms in reviving the fortunes of real estate sector?
A: Reforms have played a significant role in rejuvenating real estate sector, especially residential realty which has been facing headwinds for years. It is the result of reforms that the speculator/investor market has given way to consumer market, with end-users calling the shots. The Government’s policy of providing substantial interest subsidy under PMAY has helped boost the demand for affordable and mid-segment housing which is the main driver of residential real estate today.
Notwithstanding all this, still few more hurdles need to be removed with reformed policies. One of these big hurdles is fund crunch. Since affordable housing can effectively help meet the target of ‘Housing for All’, the Government should meet the funding needs of the sector. This price-sensitive segment of housing has been sourcing funds on high interest rates from PEs and NBFCs. I have always been suggesting that the Government should allocate certain percentage of total bank funding for this segment. High transaction cost of affordable housing needs to be brought down. The GST of 8 per cent and additional 6-7 per cent stamp duty is too high.
To promote faster completion of projects, the Government should come up with pre- approved building plans. It is heartening that the Government is considering bringing down the GST rate on construction material.
Q: How was Signature Global’s performance in 2018?
A: It was an equally rewarding year for us, both on the delivery and new launches front. We were successful in delivering our first affordable housing project – Solera, Sector 107, Dwarka Expressway, four months ahead of the Government-mandated deadline of 48 months. We also made a mark by launching three major projects.
Following the success of our first housing project in Karnal- a low rise affordable housing development last year, we added new feather to Karnal realty with the launch of Global City, spread over 30 acre in Sector 28 on NH1. This is a green, pollution-free, secured and well- located development, offering over 500 plots and over 1600 low-rise premier apartments with a dedicated commercial plaza, at highly affordable prices. We made our foray in Uttar Pradesh with the launch of our first retail project- Signature Global Mall in Vaishali, Ghaziabad. We also launched Signature Global Roselia in Sector 95 A Gurugram – a 2BHK development in around three acres.
Q: What has been your success mantra?
A: We believe in customer-oriented development and cater to what the market demands- that’s well-designed, high quality lifestyle homes at highly affordable prices, with assured timely delivery. We have lived up to this, earning the trust of buyers. We are very serious and focused on delivery. And to ensure faster delivery, we are making use of state-of-art technology. As a result of this, we could deliver our 1,000-unit Solera project in Dwarka Expressway ahead of time. In fact, we are striving to deliver our projects within 36- 42 months. Going forward, we will be delivering 1,800 more homes in FY 19.
Q: What’s your outlook for real estate sector in 2019?
A: I believe the New Year will herald good tidings for the real estate sector. I expect economy and job creation to gain momentum. And with the Government’s continuous focus on infrastructure and streamlining approvals and promoting ease of doing business, real estate should get the desired push. Affordable housing will continue to drive residential real estate. With foreign funds and investors seeing big opportunity in affordable and mid segment housing, one would see heightened activity in this potential segment. One would witness completion of lot of projects with the easing of liquidity. And finally, I look at 2019 as a year of consolidation with real estate emerging as a sustainable asset class.
Q: Going forward, what will be your future plans?
A: Living up to our motto of ‘Har Parivaar Ek Ghar’ (House for Every Family), we will emerge as number one company in affordable housing by developing one lakh homes in the states of Uttar Pradesh, Haryana, Rajasthan and Maharashtra by 2022. We are aiming for 50,000 affordable homes in Haryana, 25,000 in Uttar Pradesh, 15,000 in Rajasthan and 10,000 in Maharashtra.
Q: What will be the Signature Global’s agenda, specifically for 2019?
A: We will have a twin focus on delivery and new launches. We will deliver our projects- Synera, Sector 81, Gurugram (824 units) and Andour Heights, Sector 71, Gurugram (980 units). Under the Pradhan Mantri Awas Yojana, we will be launching a big affordable housing project in Rajnagar Extension (Ghaziabad), offering 9000 lifestyle homes. Under the Haryana Government’s Affordable Housing Policy, we will be launching new projects in Sector-37 D, Sector 93, Sector 79, Sector 63, Sector 89 and Sector 92. Apart from this, we will be launching low-rise premium floors under the Deen Dayal Awas Yojana of the Haryana Government over 30 acre in Sector 36, Sohna.
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