Decline in prices have put attractive deals on offer

Hemant Tikoo, chairman, ExperionAfter a prolonged slowdown, the real estate industry is now hoping that new measures by the government such as housing for all and opening up of foreign direct investment alongside softening of interest rates could bring in the much needed push for the sector. spoke to Hemant Tikoo, chairman, Experion on what 2016 has in store for the industry. Excerpts:

How would you describe the current situation of the real estate market in India in 3-4 lines?

There has undoubtedly been a slight slowdown in the Real Estate sector. However, major announcements made in support of the industry like relaxation to allow FDI in construction development, The Smart City Mission, Launch of “Housing for All” by 2022 are optimistic strides for reviving the Industry. However, the material impact of various policy initiatives by the government this year remain to be seen in 2016.

How do you see the real estate market changing in 2016? Do you see an improvement in buyer sentiment? What is your advice to them for buying homes in 2016?

There has been an upturn in the country’s overall investment climate. We are hopeful that big ticket reforms made this year along with reduction in Interest rates will improve the market sentiment. The Real Estate development and Regulation bill once passed is expected to bring in transparency within the industry and is sure to boost the morale of the buyers.

Given a decline in real estate prices and attractive deals are on offer, it is an opportune time to enter into the market. One can expect both capital appreciation as well as a higher rental yield in the future.

What are your expectations from the Union Budget 2016 for the real estate sector?

The budgetary allocation for the development of Smart cities are being looked upon with immense interest. With affordable housing being a prime agenda of the govt., the emphasis given for the development of affordable housing projects is eagerly expected. Progress of pending infrastructure projects, particularly in major cities are also expected to get sufficient emphasis and budgetary allocation.

Where do you see real estate startup going in 2016? Will they consolidate? Can we also see more investment in these companies?

E-commerce has certainly added an interesting dimension to the real estate sector. Usage of innovative technology and sophisticated tools have brought in disruptive change in how people search properties especially NRI’s who are unable to see the property in person.

However, long term survival and success of start-up is highly dependent on their business models and funding. Today, most of them seem unrealistically overvalued and are based on speculative future earnings. They are yet to clock in profits. Considering many startups have mushroomed with lack of proper financial backing acquisition and consolidation seem quite foreseeable.

The growth of the start-up is entirely dependent on the growth of the sector itself. The future investment in start-ups is dependent on the performance of the industry.