New Delhi, March 24, 2017: 2016 has been a turbulent year for real estate. The industry faced headwinds in terms of slow sales which was then followed by a reduction in project launches. Interest rates that were expected to come down stayed stubbornly high. The passing of the Real Estate Regulatory Act (RERA) added more confusion to the industry. This is been a year when judicial intervention for non - delivery by developers has been at its highest.
The demonetization move by the government has further added challenges to the industry. Unsubstantiated comments and wild predictions of price falls have led many customers to defer their home purchase decisions. This too has added further stress to the developers.
Demonetization will lead to a negative impact on those developers who currently follow a business model where they sell with a large cash component. Customers in this segment will be severely affected and as such their real estate purchases too will be impacted. There may be some downward pressure on prices as these developers are forced to sell their inventory at discounted rates to generate cash flow.
As we have already seen there is only a small impact where customers are purchasing from reputed developers paying full check towards their purchases.
Looking forward one expects that the government will take actions to back up the move of demonetization. This may further create some amount of issues for some developers. However, the much awaited reduction in interest rates as well as benefits expected in the budget should help revive the industry over the next few months.
With the elimination of black money from the industry that is likely to happen, as well as the implementation of the RERA a large number of fly by night operators will be forced to leave the sector leaving the industry in the hands of professional developers with a long term vision for the industry and clear customer focus. This will ultimately be in the interest of the home buyer in the medium to long term.
The most important question for customers however is whether to purchase from developers where there are deep discounts being offered. If the developer is in a shortage of funds crisis then it does not make sense for customers to buy even at discounts from such developers. This is a time when customers must be extremely cautious about where they choose to make the investments.
On an overall basis I do not see a major crash in prices as was predicted earlier however there may be some specific project level discounts offered by developers to tide over the current market conditions.
Gera Developments 2016 highlights
Gera Developments continues to see sales and progress of construction across projects. We believe customers are becoming more discerning and this shows up in the faith shown in us during these uncertain times.
Despite the volatility faced by the realty sector, the company is poised to see a year with the highest revenues till date.
Gera’s commercial brand ‘IMPERIUM’ has seen overwhelming response in both Pune and Goa. While Gera’s IMPERIUM GRAND is 90% sold, Gera’s IMPERIUM STAR has also notched up sales of over 70% in Goa. What has really provided a fillip is the sales achieved during the pre-launch stages of Gera’s IMPERIUM RISE in Hinjewadi in Pune with approximately 50% of the project already sold out with the development at the basement stage.
Gera Developments has also had remarkable success in the residential space with its ‘Trademarked’ offering, ‘ChildCentricHomes’ Gera’s Song of Joy, Phase 1 having been sold out. At Bavdhan, where Gera Developments has its luxurious hi-end residential offering, Gera’s Isle Royale, Phase 2 has been launched due to encouraging customer demand. Though the sales in the luxury segment continue to be near zero across the market, the fact that sales at Isle Royale continue to take place is testimony to the product and brand.
As a derivative of our core philosophy, ‘OUTDO’ and community creation, Gera Developments has achieved an extraordinary reception for the launch of its community initiative, LINT (Learning Inspiration Networking Training) for its commercial customers of the ‘IMPERIUM’ brand in Goa.
Known for transparency in the Pune realty market, the mobile application has simplified and provided hassle-free interaction with customers hugely enhancing the experience especially in tracking safety and quality to name a few.
Over the last 47 years, Gera developments has been accepted as a stable and reliable brand by key stakeholders having gone through various economic challenges in the country. The company already meets most norms of the RERA before the act has come into force and has been providing 5-year warranty consisting of preventive maintenance and repairs, since last the 12 years.
As we reflect on our delivery during the past year 2016 celebrating our sustained achievement of an A+ credit rating, we look forward to 2017 with the necessity for continuous improvement being the starting point. All of this is best driven and encapsulated in one word OUTDO, our belief system.
Corporate Comm India(CCI Newswire)