A Safe Home & Real Estate!

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When darkness surrounds you, either you light a torch or train your eyes to look in the darkness...

Yes, lock down philosophy it is as by now you must have know it anyways yet for those who are new readers the quote is by me only & courtesy the time at hand to analyze myself at length! Well, the “Lockdown” must have become most said or used word in recent times; I am sure, even more than Google! Means the number of time word “Google” is used all across the country, sure lock- down has replaced it in terms if being used in conversations!

Already fifteen days i.e. two weeks of lockdown are over & if for many its disturbing or frustrating to sit down at home but many on other side has got used to it (well few are even started to like it)! Many theories has started  floating whether the lock down period will be curtailed or will be increased, what if its increased & discussions goes on! Then there are discussions about what if lock down ends on 15th of this month, how that will ensure we are safe & most importantly something which nobody seems to be sure so nobody is speaking about (as usual) & that is life after lock down! And that’s natural as we seldom speaks about our real fears (just like in Harry Potter saga the wizarding world never used  to take name of Lord Voldomart & calls him as "the one who should not be named") & especially when its uncertainty then it’s always backed up by fears! Though the economists & business world is very much thinking about it at individual as well at industry level as their survival hangs on it. Already many small-scale daily over the counter earners are on gas (a phrase) means there everything was dependant on their daily business’s collection & the EMI’s for various things doesn’t stops, to defer is one thing & to wave away is another!

Well, coming to my bread & butter, real estate what else, that way one good thing about real estate is its raw material doesn’t run away or goes waste or decay or demands extra space to store unlike any other industry, so on face real estate seems to be least hit & then land prices (not home) is something which always has increased with the passing time, is a history of real estate! But, this but is very much important as it’s not anything like the history we know till now, the situation which we (read as world) is facing none of the actively living humans has faced it is a bitter fact! This is in every real sense a global slowdown, like entire business world being hit by a global typhoon or hurricane & for which no body was prepared of! Real estate as usual is confused to face the situation, which it is for any hurdle it has faced in the past, as hurdles is not something real estate likes & the recent history of real estate is full of hurdles! Problem was & is with real estate (means mostly builders) it just refuse to accept the problem in actual. Confused, well I will give an example by analogy; if a child is failing in Mathematics unit tests & reason is it’s not just understanding the technique to learn maths, then as a parent will you blame teacher or the child or maths itself? Andin the end what you do, instead trying to find out why the child is repeatedly failing in unit tests in maths, you think wait till final exam that by that time the child will have mastery on the maths & you do nothing thinking this is only right way! Outcome is the child gets flunked in maths in final exam & then you blame everybody for the failure but the your own self as a parent (well, actually this is true for most of the businesses in India but as usual the dumbest gets the lime light, sorry fellow developers, it’s just analogy)! And I am not some great management or busines guru to comment like this about business nor I run some thousand crore empire, but my own small outfit yet if I am wrong then tell me why every single real estater is crying since last at least three years! As if that much time you don’t get solution to for your tears (read as bad times) the something is definitely wrong with which we are doing business or we are expecting from the business, right? As if really the child doesn’t understand the subject & don’t have capacity to learn Maths then change his branch & try something which it will excel in or speak with his teacher what’s the problem with the child’s performance, that’s the way you would have done with your son or daughter, then why not with your business i.e. real estate!

And as per many financial pundits, the final blow (is it yet?) to the business (read as real estate) came in at worst time but I feel it’s in best times. Because logically you suffer most damage when get hit & needed to stop suddenly when you are going great & at full speed! But any ways real estate was already hit & limping when the covid disaster hit the world & one more thing it’s not just real estate, every other industry is going to hit is a fact so if you were already slow & it’s like you got more time to digest the impact than a fast moving thing. Look at the entertainment or hospitality or tourism type service industries, which were the only flourishing in last few years, they were in full speed & a sudden halt has over thrown them by every aspect of business! At least real estate has that much to cheer for & should be thankful for the timing of this covid blow! Well, now the question is what next or what's up ahead, by real estate any hurdle means only one thing or two i.e. rate not increasing & sales not happening. By most other (rather all other) industries the only hurdle is sales not happening as per expectation because in any other industry rates not increasing is never an aspect of revenue projection! But in real estate industry calculations were & are made (that’s legacy) first & foremost that’s the rates of finish product will increase (read as flat’s rates) & sale will happen eventually till the projects gets complete. And problem is on first assumption we buy raw product i.e. land & already many have burnt their fingers (and what not) by doing business with this assumption. Rates increasing (barring a few location) was history any ways but sale figures too was an issue & with present hit more confusion is there.

I am not painting a dark picture but sharing few facts as then only we can be able to deal with the situation as well look at silver lining to the darkness! Main problem is material supply chain as along with internal distribution system most materials like tiles & plumbing as well electric fittings etc was to come from  China & all that been hampered since February causing delays. And most of the site labours which were from other State as well rural part of Maharashtra has fled & we don’t know when they will be back & by me this is major concern as you can bring alternate materials but who will actually lay the tiles or make plaster or fit the taps as you can ask any lay man to do specific skill works like plumbing or tiling types! And then even if you get some labour force (skilled) then they are going to ask bomb for their services as they are smart enough to encash this scenario where demand for skilled labours will be more than supply! And this is going to make big dent on the budgets of construction cost assumed, how to repair it?  If this is on execution front then issue of managing head office as well marketing & sales is another issue. As first how to reach clients now & more than that how to motivate them for buying a home when most of them are unsure about the future!

And then what about the housing finance burden as RBI has advised (not ordered) to respective banks to defer the instalments due, on existing project term loans for three months but first three months is hardly anything & second deferring instalment is like just shortening the length of the rope of the hanging sword on our head!  What’s needed is waver of the interest for at least six months & extend the term loan repayments by one year as that much time is bound to be needed to make things on track. This is something entire real estate fraternity (including manufacturers of materials & vendors) should come together & demand & even flat holders included too, as they too are part of any project. And imagine what if any builder stalls his project because of his financial incapability, what do you think will happen to your booked home & investments?

Well, indeed a dark picture but now silver lining, as RERA has already (to my knowledge) extended the time limit of completing the projects by three months though this too needs to be revised & efforts must be made for that. Most important is don’t panic as your raw material is not running away or it’s not perishable & this is true for the investors in readymade units also! Take a complete review of your in hand projects & focus on that only instead running behind new ones (as usual). Speak with your clients, vendors, financers & your staff also as they all will be looking at you for some confidence. Best part is post this disaster (well that only term I can use) people will be in dilemma about investments so guide them on right way & a home is the safest & best investment not from money angle but from shelter also. As this is a place which opens its doors for you twenty-four hours & happily, when entire world is locked down! People are smart enough to understand the situation & all they need is a push in right direction. Rather this entire episode has emphasized the importance of having a home of your own very strongly.

Indeed memory of people is very short (especially our countrymen) yet this time there will be many changes in entire life style or say attitude towards the life, in the society for sure. In the marketing avenues also, as new mediums like On-line Games to Virtual Site Visits will be opened up along with more people going for e-news papers or news apps. Even many of the organizations have already switched to Zoom App for online meetings which we also can use for meeting our clients instead making them take out half a day just for meeting their builder or staff. Hereafter he world will change definitely as life keeps evolving, point is are we (real estate) ready to accept the change & adopt it as there only lies our future, which indeed is bright; only if we change ourselves in right direction!

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Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/al0NZ-7Zhq0

Please do visit my blogs to know about our philosophy at Sanjeevani ! (Click the links below)

https://visonoflife.blogspot.com/2019/11/infrastructure-development-real-estate.html

http://jivnachadrushtikon.blogspot.in/

Creating Togetherness; team Sanjeevani Way(Click link below)

https://www.flickr.com/photos/65629150@N06/albums/72157627904681345

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