Saturday, November 01, 2008

Can 'Sunday Economic Times CEO Round Table on Real Estate' find solutions to the challenges of Pune real estate?

Uncertainty and lack of trust:

Today, when i saw Economic Times' ad focused on the property rates, i instantly started expecting a lot from "SundayET CEO Roundtable on Real Estate." I became anxious to read some 'serious solutions to the present crisis' on November 2, '08 issue of SundayET.

A moment later, i thought, "Am i over expecting? Could this Round Table give any solution to the Pune real estate market?" I asked myself this question because recently i have developed a new habit. The habit of rechecking my response to every shocking news i read or watch about global financial crisis and it's impact on Pune real estate. I am not an extremist by nature. My long association with Pune real estate market does not let me agree with some of my readers who are absolutely sure about the crash of Pune real estate market. Or like a typical builder in Pune, i cannot say, "Impact of the financial crises is not that serious and Pune real estate is safe" and totally reject the reality.

Oh! I cannot be completely pessimistic about the SundayET Roundtable. I am not the only one in India who knows that real estate is a local business. Every participant knows this. ET is aware that there is nothing like Indian real estate. There is not a single real estate company who has all India presence. There are only a couple of builders from Delhi and NCR who are trying to start a project in any city in India where there is a good demand and expected profit. Still should i keep on expecting from the SundayET Roundtable because in Delhi lobbying is a political reality?

The focus of the ad is property rates. Why? Isn't it naive to think that CEOs will talk about property rates at the Round table? CEOs have more important topics to discuss. For example bank finance to real estate projects. Who knows some CEO can demand subsidy for cement and steel! Am I thinking that the ad is about the solutions discussed at the Roundtable? Ad may be for selling more copies of the Economic Times on Sunday. Ad may be PR gig to show off the concern of big real estate developers. An ad may be only the space selling opportunity for ET. Am i reacting cynically? Is my desperation compelling me to expect an assurance from some third party, like this CEO Roundtable, that builders in Pune will be able to complete their projects? Is this the real challenge Pune real estate is facing? What is your take on the challenges for Pune real estate? Do you worry about walking to work from your residence or kayaking? Please, let me know in the comments.

1 comment:

  1. Hello Ravi,
    This Round table conference can be a good platform for real estate developers to put forward their collective demands, but there are few points which need to be addressed from common man perspective:

    1) Real estate developers come together and ask for government intervention during these bad times. Are they willing to share their profits honestly to government during their good times? (Particularly during those good times when they increase the rate by Rs. 100-200/sq ft a week?)

    2)They are demanding certain packages or they are demanding that banks should give them loans as lending to developers is almost stopped, but why should banks take a risk to finance a sinking boat when there is uncertainty of sell of project and hence chances of default?

    3) Should this industry be controlled by some efficient Government body for affordable housing like banks are controlled by RBI?

    4) When Cement/Steel companies start generating double or thrice the profits, their prices are curtailed to prevent windfall gains. Why such a rule can't be applied to Builders? e.g. Just like we have circuits in the stock markets, can there be price bands for a specific period in any real estate market? If such a band exist, it will be good for people and developers too. If the demand is at peak, the people can still afford to buy homes. There will not be windfall gains to developers and few people. During the bad times, government may support the lower price band so that the people can be assured that the rates will not fall below certain threshold and there will be some confidence in the perspective buyer about his investment.

    5) Indirect support to black money by this industry should be stopped and the deals should be on the registered as per their actual cost.

    5) Walk to work or Kayaking is an excellent concept but how many people can dream their dream house there? (To that matter it’s difficult for a good earning person to buy 2BHK at these places)

    6) In short this industry needs to be more professional and well regulated so that it survives bad times successfully.