CII discusses Challenges for Real Estate in India and the Way Forward Post COVID-19

New Delhi, May 18, 2020: The confederation of Indian Industry (CII) organized a virtual conference for the Indian Real Estate sector to discuss the challenges being faced by the sector post CoronaVirus outbreak and the way forward.

The Panel discussions were divided into three sessions where various respectable names from the industry participated. Along With Mr. Pradeep Aggarwal, Chairman-ASSOCHAM, National Council on Real Estate, Housing and Urban Development and Founder Chairman, Signature Global Group, many other dignitaries were present like Mr Amit Grover, Executive Director, DLF Office Business Ltd, Mr. Geetambar Anand, Chairman & MD, ATS Infrastructure Ltd., Mr. Navreet Singh Kang, Chairperson RERA, Government of Punjab, Mr. Rajive Kumar, Chairman RERA, Government of Uttar Pradesh, Mr. Rajan Bandelkar, VP, NAREDCO and Director, Unnathi Estate (Raunak Group), Mr. Gaurav Karnik, Partner-Real Estate, Ernst & Young, Mr. Amarjeet Bakshi, Founder and CMD, The Bakshi Group, Mr. Vipul Roongta, MD, HDFC Capital Ltd., Mr. Rishi Raj, Chief Business Development Officer, Max Ventures & Industries Ltd., Mr. Daljeet Singh, MD, Advance India Projects Ltd. also shared their views.

The lockdown in the nation has forced every industry including Real Estate to remodel its business strategy considering the new challenges. Mr. Pradeep Aggarwal said, “the Developers must not lose hope as to deal with the newer challenges we would need a new affordable policy. Developers need to change their beliefs, as the lockdown has made everyone feel the need for a home which has become as essential as food for everybody. Therefore, in the coming 10 years, Affordable Housing would be playing a major role in one of the best-emerging markets i.e. Real Estate”. “This is an adverse time and we should try and create new opportunities out of it to move forward”, he added. The lockdown has impacted the sector adversely for which Mr. Aggarwal suggested, “Single window clearance, liquidity infusion, and GST cut down up to 50 % for 1 year are factors needed for the survival of the sector immediately”.

The participants agreed to the fact that Migration of the labor is the major problem the Real Estate is struggling with, to which Mr. Geetambar Anand, Chairman & MD, ATS Infrastructure Ltd. added that “whoever goes will not come back for 3-4 months and this is going to hit business but we need to support each other.

Availability of capital, manpower, and the will of the entrepreneur are the factors which will help us create opportunity amid crisis. Mr. Vipul Roongta, MD, HDFC Capital Ltd., said, “NBFC’s and HFC’s which were providing 40-50 % funds to Real Estate are reluctant now but this began even before COVID outbreak. Now, FM’s announcement of buying a bond is positive, therefore ample liquidity is there.”

He also indicated a new trend, “there has been a psychological impact on people of this situation, every tenant is ready to buy a house of his own but nothing above 50 lakhs is selling”, he says.

The real estate sector has been struggling for the past 2-3 years now and post-Covid 19 the problems may seem to aggravate. Mr. Daljeet Singh, MD, Advance India Projects Ltd., shared his concern about the interest rates.” How can a developer survive acquiring land at such high rates? That’s a big concern.

We need a breather in form cutting down these rates. Even Sanctions take a lot of time – it’s as bad as a lockdown”, he raised his apprehensions.

On the other hand, Mr. Navreet Singh Kang and Mr. Rajive Kumar, Chairman-RERA, Government of Punjab and Government of Uttar Pradesh respectively motivated the developers; they agreed that relaxation in timelines are not enough for the already ailing sector but emphasized on patiently supporting each other and take decisions with interests of all stakeholders in mind.

CII’s Virtual Panel discussion concluded that with the digitization process and new ideas, the Indian Real estate sector can overcome these challenging times. In 6-9 months the demand and supply will start picking up, if the government keeps supporting it.