It will boost economy, safety, transparency

India Post News Service

NEW DELHI: The M3M Group is a conglomerate of businesses having a wide portfolio of real estate projects straddling ultra-luxury and premium residential complexes, commercial, hospitality, IT SEZ and education. M3M has scripted its market success and built formidable brand equity within a short time-span owing to a firm commitment to innovation, technology, quality, customer satisfaction and ethical behavior of the highest standards. M3M is today ranked amongst the foremost real estate brands in Delhi/ NCR.

In an e-mailed interview, Mr. Basant Bansal, Founder Chairman, M3M Group, comments on the impact of demonetization and other issues connected with real estate. The following are edited excerpts:

Demonetization:

Demonetization may be a short-term itch but it will generate long term gains. It will ensure a boost in economy in the long run and will lead to improved transparency. The surgical strike on black money would crash inflation which would benefit the genuine buyers. This decision is positive for the end users looking to buy their dream homes. Also with the implementation of Real Estate Regulatory Act (RERA) the sector is soon going to cleanse, boosting India’s image globally.

Prices have either corrected or remained stagnant for the last few years, which actually means that the prices have substantially corrected once adjusted against inflation. Since prices have reached their lowest in most of the markets and demand may pick up soon, this may lead to an increase in prices. Many prospective home buyers have been deferring their buying decisions in anticipation of a price correction. Demonetization has added to the perception that the prices will correct further. This has led to a large pent-up demand component being created in the housing market.

With inflation under control, India is entering into a low interest regime as home loan interest rates have expectedly come down and are expected to decrease further. It will result in lowering of EMIs for home buyers along with more people meeting the eligibility criteria. This coupled with rapid urbanization, robust economic growth and higher salaries would create a very large segment of new home buyers resulting in enhanced demand for housing, especially in the urban areas.

With banks flush with funds and interest rates at their lowest in a few years, the opportunity is there for many to fulfill their aspirations of buying a dream home.

Scope for NRI investments

The investment in real estate by NRIs can be looked at in two contexts: one as pure investment and the second as end user driven. So, if the person is looking at the first perspective it makes sense to invest in under construction projects where the objective is to attain capital appreciation or ready to move in apartment where the objective is to attain rental income. In addition to this, amenities offered play a key parameter that influences the decision. Quality of the product, distance from the city centers and transport hubs, surrounding environment are other factors to be looked at. Cheaper access to funds is another factor. Home-loans are available to NRIs at very low interest rates, around 4-5 % which is another added incentive.

With increased globalization, Indian consumers are exposed to global standards and wish to live a luxurious life. World-class clubs, concierge services, landscaped parks, swimming pools and health clubs and many other features now form the basics of most of new residential development. Interior designers, architects, design firms and hospitality brands offer the best-in-class features to meet the growing aspirations of well-exposed affluent Indian clientele.

As for safety of investments, the passing of RERA (Real Estate Regulation and Development Act 2016), the Benami Transactions Act and now the demonetization move will ensure that the sector will lose much of its historic taint and become more transparent. Only players who conduct their business with integrity will survive.

Lot of Indian banks have branches offshore and at present evaluation of NRI mortgage funding is relatively easier if a person is from the same place where the bank has a branch. Indian banks need to have stronger relationship with foreign banks where NRIs have transactions and based on their evaluation, home loan should be given in India. Asset based home loan approvals should be encouraged. Also, the banks should have separate counter for NRI home loan approval; this will make the entire process seamless.

USP of M3M projects

Gurgaon a few years back had small projects, the development that we see today was not there. The city had amenities, but they were few and far between. The families had no avenues of recreation in their residential complexes, they had to go out for family outings. This is where we conceptualized M3M Golf Estate. It had all the components of resort-living at one place, providing avenues of recreation while providing the best-in-class facilities.

Our flagship project was launched in October 2010, and is spread over approximately 75 acres of lush green space. It has a 9-hole executive Golf course designed by Golf Plan, USA. The architecture is a perfect synthesis of eco-friendly green landscape and cutting-edge designs. A combination of low-rise, mid-rise and high-rise towers, it has luxury golf residences and penthouses and is conveniently located on the Golf Course Road Extension.

1. Cell no. – 8373929895 What are the Major impacts of demonetization on Real Estate?

There are always two sides to a coin, similarly for this regulation – while it may be a short-term itch, it will generate long term gains. No less than a structural coup, it will ensure a boost in economy in the long run and will lead to an improved transparency in all the sectors including real estate. The surgical strike on black money would crash inflation which would benefit the genuine buyers. This decision is positive for the end users looking to buy their dream homes. Also with the implementation of Real Estate Regulatory Act (RERA) the sector is soon going to cleanse, boosting India’s image globally. PM Modi has rightly stepped forward for the welfare of the people as well as for the nation’s growth.

2. Will property prices go down after demonetization in India? If yes, how?

No, the prices have either corrected or remained stagnant for the last few years, which actually means that the prices have substantially corrected once adjusted against inflation. Since prices have reached their lowest in most of the markets and demand may pick up soon, this may lead to an increase in prices. The reasons for this belief is as follows. Firstly, many prospective home buyers have been deferring their buying decision over last few years in anticipation of a price correction.Latest move by Government to demonetize high value currency notes has added to the perception that the prices will correct further, which has resulted in more home buyers postponing their buying decision. This has led to a large pent-up demand component being created in the housing market.

Secondly, with inflation under control, India is entering into a low interest regime as home loan interest rates have expectedly come down and are expected to decrease further. It will result in lowering of EMIs for home buyers along with more people meeting the eligibility criteria. This coupled with rapid urbanization, robust economic growth and higher salaries would create a very large segment of new home buyers resulting in enhanced demand for housing, especially in the urban areas. An enhanced demand will further lead to shooting up of prices.

3. Demonetization Brings Happy Days for Residential Property Buyers?

With pent up demand in the market riding on the prospective buyers postponing their decisions in the hope of price correction, banks flush with funds and interest rates at their lowest in a few years, the opportunity is there for many to fulfil their aspirations of buying a dream home.

4. What should any NRI keep into consideration while Investing Back Home?

The factors that drive the sentiment amongst the Non-Resident Indians to invest in a property back home are many. The investment in real estate by NRIs can be looked at in two contexts: one as pure investment and the second as end user driven. So, if the person is looking at the first perspective it makes sense to invest in under construction projects where the objective is to attain capital appreciation or ready to move in apartment where the objective is to attain rental income. In addition to this, amenities offered play a key parameter that influence the decision. Quality of the product, distance from the city centers and transport hubs, surrounding environment are other factors to be looked at. Amenities such as Clubhouse, amphitheater, concierge services, sports facilities are the attractions. Cheaper access to funds is another factor. Home-loans are available to NRIs at very low interest rates, around 4-5 % which is another added incentive. The average NRI prefers to invest in a flat/plot, the HNIs are interested in premium residential markets such as Delhi NCR.

5. Do Indian Developers delivering Realty at par with the quality available oversees?

Growing competition and rising aspiration has led to high-end real estate development in India. With increased globalization, Indian consumers are exposed to global standards and wish to live a luxurious life. This acts as a cue for developers to develop classier projects. Enviable location, spacious living spaces and pleasing architectural design are the basic expectation of modern home buyers today. World-class clubs, concierge services, landscaped parks, swimming pools and health clubs and many other features now form the basics of most of new residential development. Interior designers, architects, design firms and hospitality brands offer the best-in-class features to meet the growing aspirations of well-exposed affluent Indian clientele.

6. How safe is Real Estate Investment in India Today after such a big jolt to the Industry?

In the past one year, there have been positive and potentially long-lasting changes in the Indian real estate. The passing of RERA (Real Estate Regulation and Development Act 2016), the Benami Transactions Act and now the demonetization move will ensure that going forward, the sector will lose much of its historic taint and become more transparent.Only players who conduct their business with integrity will survive. This bodes well for end-users, who will be aware of their rights, have the assurance of not being cheated and will no longer need to contend with constantly rising prices. They will be able to buy properties of their choice at affordable prices, in projects which will assuredly be delivered on time.Over the long term, the Indian real estate sector will emerge stronger, healthier and capable of long periods of sustained growth.

7. India’s Real Estate Market: Time for the bubble to burst! What are your views on this statement?

For the real estate industry, 2016 saw the biggest changes in decades, especially on the policy front. Some of the biggest game-changing policies like GST and RERA cleared hurdles, and are on their way to full implementation. The demonetization move caused considerable turmoil; however, along with the Benami Transactions Act, it promises to bring greater transparency in the real estate sector.Affordable housing will come into sharper focus now than in previous years, and REITs promise to open up the real estate market to smaller investors in the coming year. Another plus is the infrastructure status to the affordable housing segment.The country’s real estate markets are definitely poised for growth in the medium-to-long term on the back of higher transparency and further consolidation.

8. What are the Initiatives Government is taking to boost Foreign Investment in Indian Realty Market? What are your suggestion?

Thanks to a proactive government keen on improving India’s ranking globally and strengthening public institutions, India is poised to become a modern economy. We came 4^th in developing Asia in terms of FDI inflows as per the World Investment Report 2016 by the United Nations Conference for Trade and Development. For the real estate and construction sector, the government in 2015 removed all restriction on foreign direct investments except for a three-year lock-in period for select projects. There’s good appetite for Indian real estate among investors and the easing of FDI norms will lead to speeding up of investment process. Any investor-friendly, streamlined policies from the govt. will enable the Indian real estate sector to meet its massive capital requirements leading to opportunities for large-scale real estate developments. The recent regulatory reforms like RERA, REIT, GST, Benami Transactions Act are all in the right direction as they will further boost investor-confidence in the real estatemarket. 2017 saw the government provide infrastructure status to the affordable housing segment, providing a further boost to the realty market.

9. What is the current trend in Real estate in your region?

The government’s demonetization move certainly impacted the real estate sector. However long lasting positive changes are expected. Lately, there has been a sharp easing in lending rates, especially after banks migrated to the Marginal Cost-based Lending Rates (MCLR) system coupled with heavy inflows of deposits following demonetization. Home loan rates at present are at one of their lowest levels. All this is stoking demand and will definitely provide a boost to the real estate industry.

10. What are the major USP’s of your project? Why do you feel that it could be the trend setter in your region?

Gurgaon a few years back had small projects, the development that we see today was not there. The city had amenities, but they were few and far between. The families had no avenues of recreation in their residential complexes, they had to go out for family outings. This is where we conceptualized M3M Golf Estate. It had all the components of resort-living at one place, providing avenues of recreation while providing the best-in-class facilities.

Our flagship project, it was launched in October 2010, and is spread over approximately 75 acres of lush green space. The project has a 9-hole executive Golf course designed by Golf Plan, USA. The architecture is a perfect synthesis of eco-friendly green landscape and cutting-edge designs. A combination of low-rise, mid-rise and high-rise towers, it has luxury golf residences and penthouses and is conveniently located on the Golf Course Road Extension. The project is fast emerging as the landmark project in the fast-emerging metropolis and will be the benchmark of the future.

11. What kind of special support you are getting from the Indian Banks facilitating the home loan for NRI’s?

Investments from NRIs will make the Real Estate market in India flourish. Lot of Indian banks have branches offshore and at present evaluation of NRI mortgage funding is relatively easier if a person if from the same place where the bank has a branch. There are some measures if incorporated will promote not only NRI investment in India but the right kind of investment. Indian banks need to have stronger relationship with foreign banks where NRI have transactions and based on their evaluation, home loan should be given in India. Asset based home loan approvals should be encouraged. Also, the banks should have separate counter for NRI home loan approval, this will make the entire process seamless.

12. What is your opinion on the future of Real Estate in India?

The year 2016 has laid the foundation for the strong future of the real estate industry. Policies like Smart Cities Concept, Housing for all by 2022, GST, RERA implementation, Demonetization and Benami Transaction act are all steps to propel the real estate sector. The real estate market will go through a phase of consolidation. Overall, the industry will see a lot more confidence from the buyers/investors, greater transparency, positive outlook by foreign investors and cashless transactions.