Home buyer's wait-and-watch haunts real estate

9/1/2019

PUNE: The real estate market in the city is still recovering from the “triple shock” of demonetisation, RERA and GST implementation, with sales numbers showing a marginal improvement last year over 2017 - a far cry from the peak in 2014.

This was revealed in the reports of consultancy firms Knight Frank and Anarock, and realtor Gera Developments. While Knight Frank and Gera released their reports on Tuesday. The report by Gera estimated the sales in 2018 to be 17% less when compared to 2014. The data provided by Anarock showed a 27% dip in sales in 2018 over 2014, while Knight Frank found the sales to be down by about 4% in 2018 over 2014.

In essence, all the reports pointed that the market had yet to stabilise from the triple shock of demonetisation (brought in 2016), the real estate regulation act (RERA) and GST, which were introduced in 2017. Experts said the prevailing trend was also reflective of the market’s “yet-to-build confidence” in RERA, which is a work in progress. “Though developers have rolled out freebies, buyers are expecting more,” Paramavir Singh Paul, branch director – Pune, Knight Frank, said.

The agency said while new launches were back in the Pune market, the spurt in launches was yet to translate to sales. “Buyers are still in the wait-and-watch mode. They are waiting for the prices to come down further,” the agency added. The reports by Knight Frank and Gera pointed to a long-term correction in property prices by about 3-5%.

However, this has failed to stimulate buyers, which can be attributed to two factors -  developers tempering the supply sharply and focusing only on a few projects and offering freebies like white goods discount, modular kitchens, stamp-duty waiver, among others, but not quoting an upfront discount.

“After a prolonged down cycle, it seems there are finally green shoots visible in the Pune’s real estate sector. Although it is too early to say, but it is expected to stabilize by the end of the year,’’ Rohit Gera, managing director, Gera Developments, said. Anuj Puri, chairman, Anarock Property Consultants, had said though there was a pick up in 2018, the same was way-off the peak seen in 2014 and 2015.

According to real estate lawyers dealing in RERA cases, the implementation of the law has been far from satisfactory, with a lot of loose ends remaining to be tied up. “Although there are rulings being given in the favour of consumers, realtors are not paying up on time and going for an appeal even in clear cases, which is postponing things,” Harshal Jadhav, a Pune-based property lawyer, said.

Knight Frank’s Paul said RERA was better than the previous laws even in its current iteration, estimating a clear verdict in 3,200 of 5,000 cases so far. The studies have also found that the market is preferring “ready-to-occupy” projects to those in early stages of development — a sign that people were yet to believe that under-construction projects would be delivered on time under RERA.