Challenges in Indian Real Estate : Sanjay Raj
Mr. Sanjay Raj (Sanjay) is the Chief Executive Officer and Executive Director of Golden Gate Properties Pvt Ltd (GGPL). He is a Postgraduate in Management from “TAPMI” with a vision to redefine business for the 21st Century.
Golden Gate Properties Ltd is a Bangalore based Public Limited Company that started its operations in 1997. In a short period of time it has emerged as one of the leading developers in South India with its excellent projects of outstanding quality, reliability, affordability and efficient after sales service. The company engages various national and international architects (like HOK, USA) for its projects.
Speaking with CommonFloor.com, Sanjay Raj put forth some insightful information about the Indian housing market and challenges the real estate industry is facing today.
What is the outlook for the real estate industry?
The industry is little stagnated, but still a lot is happening. Bangalore is doing better when compared to other cities such as Delhi and Mumbai. This is mainly because here we have actual user in play.
Much has been said on the cumbersome process of approvals. What are your views on this issue?
It is the biggest challenge we are facing presently. The approval process has been made online here too. Despite this, it is still consuming a lot of time. Many NOCs are required before and after going to the main authority and also this process takes about 4-6 months.
So, do you think it is one of the main reasons for the delay in project completion?
Actually yes, project itself is getting delayed to start. However, it will be better to know the exact date as to when a project gets approved as everything is compiled by the norms that are being set. Things can get better if we can have one stop shop for all the approvals and say 45 days turnaround time for the approvals and the benefits can be passed on to the consumers.
What other factors do you think are the main reasons for the delay in project completion?
The main reason is approvals. Apart from that, issues with labourers, increasing home loan rates and banks tightening lending to real estate firms.
Why an average development in India takes 4-5 years to build and deliver, while larger projects in Singapore and Hong Kong are delivered in two years?
In India, we can also complete projects in 2 years if we have a better participation from the government and lesser interference from various government departments. Real estate is one industry, which has got increased amount of government interference such as water department, power department, fire for fire NOC, revenue department, khata, BBMP for building plan approvals and BDA for master plan approvals. Handling various government departments is the biggest challenge and the biggest reason for the delay.
How consumers’ behaviour in the real estate industry is changing?
Right now, consumers are extremely aware of what is happening in comparison to earlier. We are trying to be as much honest and transparent as we can. Presently, most of our clients are from IT industry, and they are quite educated.
What is your overview on affordable housing? Are the builders able to satisfy the demand of affordable housing in India?
Affordable housing depends on what is affordable to whom. Today, 25-35 lakh is what we consider as affordable. Earlier, it was 20 lakh, but today in that price range, providing lot of amenities can’t be possible and the quality of construction could not be that good too. Affordable segment will always grow and there is a huge demand in this segment. We are launching an affordable housing project on 15th of August in Bangalore called ‘Commune’.
Which housing segment is in demand at present?
The affordable housing segment is in huge demand. For example, when the Karnataka Housing Board launched their affordable housing project named Surya City with 20 thousand units, it had got 3.8 lakh applications.
The luxury segment is like a pyramid, higher the price lesser the buyers. And speculations are very less in this segment.
The middle segment, which is in the range of 50-75 lakh, is focusing much on the IT corridor such as Sarjapur Road, Electronics City and Whitefield. The location is most critical in this segment. If the location is good with right price, the middle segment would be the fast growing.
What are your current and future projects?
We have seven ongoing projects at present, and have launched three since January at Hanur road and Banashankari. We are launching the next project near Electronics City on 15th of August and another one on Sarjapur road in October.
