By Ayushi Ashar
Despite global economic challenges such as inflation, increasing capital costs, and growth uncertainties, India’s real estate market displayed remarkable resilience, reaching unprecedented heights this year.
Given the current enthusiasm for homeownership, the demand for affordable properties is anticipated to rise significantly, with an increasing number of individuals looking to transition from rental accommodations to spacious 2BHK and 2BHK+ homes.
At the same time, there will be a notable surge in demand for the luxury housing segment, driven by the interest of High Net Worth Individuals (HNIs) and Non-Resident Indians (NRIs) in acquiring more expansive and sophisticated assets within India.
The RBI has also done a tremendous job by keeping the repo rate in check, which has played a crucial role in maintaining the sales momentum of the residential real estate market.
The RBI’s projected 7% GDP growth for FY24 is not merely a numerical figure; it signifies increased disposable income for individuals. In the current scenario, there is a universal aspiration for homes with enhanced living standards, and this demand aligns seamlessly with a flourishing economy.
With demand trends on the rise, one crucial factor ensuring the sector’s growth is the timely delivery of projects by developers. Timely project execution is a key driver in fulfilling the market’s evolving needs and fostering economic growth.
Government’s role:
The Indian government’s initiatives like PMAY and RERA underscore the importance of timely project delivery. This promptness goes beyond mere efficiency; it significantly impacts public perception, job creation, market competitiveness, and, ultimately, the success of the entire sector.
Timely completion ensures that benefits reach intended beneficiaries, fuel demand for skilled and unskilled labour, enhance developer reputation and strengthen their competitive market position.
Delays impact both customers and developers. Those investing in under-construction properties often bear the burden of delays, continuing to pay EMIs on interest for an extended period without receiving tax benefits until project completion.
This burden is amplified for customers residing in rented accommodations. According to RERA regulations, developers also face penalties for delays and are obligated to pay interest to customers. Hence, timely project delivery ultimately creates a mutually beneficial situation for developers and buyers.
Customer confidence:
Traditionally, real estate has had to face the issue of low trust levels from customers. However, the past 2 decades have shown how progressive the industry has become by maintaining a certain level of transparency.
The bare minimum expectation from the customers is that they should receive possession of the dream home within the timelines committed by the developers. When developers consistently meet project deadlines, customers develop confidence in fulfilling commitments. This cultivation of trust is paramount in a high-value, long-term investment like real estate.
Completing projects on time eliminates uncertainties and anxieties customers may experience due to delays, ensuring a positive overall experience. Satisfied customers are more inclined to recommend developers to others, leading to increased referrals and business opportunities.
Increase in liquidity:
As real estate is a capital-intensive business, developers must maintain a stellar reputation in front of banks and other financial institutions. By keeping a consistent track record of delivering projects on time, developers can create enormous goodwill which is instrumental in attracting and retaining capital. A faster investment turnaround makes the market more appealing to domestic and international investors.
Conclusion
For a country like India, where the real estate sector is a significant contributor to GDP, the implications of timely project execution extend beyond economic growth. It acts as a catalyst for social development, creating sustainable and vibrant communities. Timely completion of residential projects ensures families have access to safe and comfortable living spaces, contributing to an improved quality of life.
Timely project execution is not just a logistical necessity; it is a strategic imperative for the growth and sustainability of India’s real estate sector. It fuels economic development, attracts investments, addresses the housing needs of a growing population, and enhances the overall quality of infrastructure.
As the industry evolves, a steadfast commitment to meeting project deadlines will be the linchpin for success, propelling the real estate sector into a future of unprecedented growth and prosperity.
(Ayushi Ashar, Director of Ashar Group. Views expressed are author’s own. Please consult your financial advisor before investing.)
