Tuesday, December 29, 2020

Real Estate, Santa Claus & New Year!



“Christmas is doing a little something extra for someone.”... Charles M. Schulz


Charles Monroe "Sparky" Schulz was an American cartoonist and creator of the comic strip Peanuts. He is widely regarded as one of the most influential cartoonists of all time & no wonder as only the kind of brain Schulz has which can define a big thing like Christmas in so simple words! Indeed Christmas does set the tone of the year end & mere sight of that "Ho ho ho ho" signature laugh Santa Claus has the capacity to lift the mood of the masses across the society going beyond the self created boundaries such as religion, caste, gender, color or class! And especially on the background of the worldwide lockdown, this Christmas has special meaning as in any way its year end also, giving hopes for the upcoming New Year. Out of above list if someone needs the Santa & his Christmas gifts with best luck most, then it’s the real estate (with due respect hospitality industry also), in not just Pune but the entire country. As usual many people will frown  saying, "aa gaya apni jaat pe"; sorry guys here “jaat’ doesn’t mean any caste neither I believe in one but it means fraternity I am in i.e. builder or say real estate & I don’t blame them! As why I said real estate not just because I am from that industry but the spectrum of the society it covers & the importance of the same which no govt has yet acknowledged on many fronts of which revenue & employment are two main! Of course along with these two aspects buying a home is every individual's basic right too & not just need, again something we have never seriously thought about & outcome is the cancer not just to the real estate but to entire society i.e. illegal housing or slums! 

Now, one will ask what relevance of Santa Claus or Christmas with this, well nothing, just a coincidence & after all what a person keeps going on but hope of which Santa Claus is a symbol! Now coming to the scene of real estate & what it needs at the start only I must say Santa Claus has gifted the real estate many things even before the Christmas arrived i.e. reduction in stamp duty (though for limited period) is one such & then UDCR i.e. simplification of development control rules or we can say just DC rules for entire State (barring few regions) which is like a Bible for the real estate, also came in existence. As well, the latest gift from Santa Claus is now you can pay the development charges as well premiums to the local body which is our beloved PMC in our case in installments & that to at mere 8.5% yearly interest rate! And housing finances (please note, to the home buyers only) have been offered at easy terms & at lowered interests & many such gifts  have been showered on real estate (not just builders) by the govt which has acted like a Santa Claus for this industry! Again, one will ask what more you (read as builders) want, do you expect the Santa Claus will sale or buy your flats also that too at your rate! Well, surely no, that much sanctity is there in the builders (at least till now) but what I was pointing at is the scene in real estate wasn’t very lucrative even pre-lockdown era. The uncertainty among the production industries which is directly connected with real estate & the impossible equation of keeping home prices in control of the home buyer (just like infamous Duckworth Louis in Cricket where some team ends up with a task to make 30 runs in 1 ball to go) same situation was (and still is) present in the real estate.

Uncontrolled land prices with no Govt interested in doing something about it & in addition to hiked rates of essential materials like steel & cement is one issue. And then various premiums as well development charges by the local bodies including many of them illegal also (road development charges for e.g.) , the delay in implementing right policies (such as Metro FSI or TDR on less wider roads & many such)  along with delay in obtaining hundreds of NOC's from different departments  & on top of it step child treatment from the financiers (read as bankers) & many such things has literally broke the backbone of not just builders but of the entire real estate already. And as I said real estate doesn't mean just builders, indeed they play a pivotal role but right from govt to banks, to professionals like Architects, Charted Accountants, Advocates to various Service’s Consultants to suppliers to contractors to labors & finally home buyers, all of these are associated with this industry in their own way & whenever we say real estate, just mind its future of all these segments is at stake! Agreed, all of them have earned their fortune in past by their association with real estate, yes even flat buyers also as or else if they go to sale their respective flat today, will any of them be selling at price below market rate just because they have got their flat at lower rate in past? Well, we all know the answer & that does get reflected in present redevelopment deals by the existing flat holders the way they try to encash their present flat’s potential! Now, the issue is not about existing flat holders or the builders who have had their piece of cake but of today’s or say new genre of both fraternities i.e. builders & home buyers, as its their future we are talking about here!

Now, with all positive (read as good things) I have written which Santa Claus alias Govt has showered us with, one will surely ask, what more real estate wants! I repeat, I don’t say govt to buy the homes build by the builders & help them making profit, as even if Santa Claus asks you ask for your wish you should not be a that fool to ask for the Sky & the Moon; all I am asking is, govt to make the policies such that the common people will be able to buy the homes build by the builders & the builders will be able to make those homes at the affordable price for everyone & not just for the few lucky ones! This is possible only when govt will make the policies thinking on these lines as well do its job what it is meant to do i.e. provide proper infrastructure evenly to all around the city which includes roads, water & power supply & basic civic amenities like education & public health. As well the govt must stop allowing illegal homes to be built which is direct threat to the legal homes as well entire social & physical health of the city! I think this is definitely not asking for the Sky & the Moon! As more infrastructure in place means more land available for development & livable homes creating more turnover which in turn helps to all the segments related to the real estate, indeed appreciation may not be (should not be actually) much but the volumes will boost entire economy & faster!  

As for the builders, lets realize gone are the time of doubling your investments (read as builder's financiers too) in one or two year time, instead buy the land (and tdr) at a price where you can think of selling the homes on such lands at affordable price of the needy customers. As well for the home buyers, don’t just go for the per sq ft rate the bleeding builder can negotiate or the lavish specification but look for what you really need & is a good home in first place! These are good times to buy a home if you have money but before that understand what a good home means & for that you will need a good builder too! And for the landlords (read as redevelopment society members too), no harm in encashing your piece of land as much you can but do mind over greed is what has landed most builders in trouble along with their investors & especially if you are thinking of redevelopment of the society then think more as apart from your own home you will be part of the society which you will be living in! No need to tell about the margins to the suppliers or the contractors as they are the one who knows to survive yet be rational while dealing with any developer is all I will say. And the bankers or the financiers, please do mind if the real estate industry survives then only you all will make money, so do look at the real estate needs from this vision or attitude instead either treating it as milking cow or untouchables! The govt also must understand that it also is directly party to the profits or losses of the real estate & it needs to boost the morale of not just the builders & home buyers but even the laborers also which makes a big part of the real estate. The benefits must be passed on to them as well think of their welfare which includes labor children's education & some permanent home making for them! 

Lastly, all those who are related to the real estate & expects Santa Claus to bring gifts for them in the New year ahead, we all has to play  Santa Claus for some lesser unfortunate segment than us & if we fail to do that then we don’t have moral right to ask or expect gift from the Santa Claus, that’s all! Let’s welcome the New Year keeping the greater good for the real estate in mind then definitely we all have a Santa Claus keeping our gifts with us even in the darkest of the night! 


Sanjay Deshpande 

Sanjeevani Dev.

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