This is the time every year, the month of January, when the real estate developers make promises to be the year ahead as their best year ever. Will 2020 be their best year ever… for real this time? Ravi Sinha examines it in the context of their learning of the past and willingness to change in 2020.
“What will you do differently this year that will ensure you get different results?,” I asked this question to many developers and the response has been more or less the copy & paste of the past many years weathering the slowdown now.
I nevertheless wished to delve deeper and hence changed the question this time, “What has been your biggest learning of the year 2019 and how do you plan to make amends this year?” Again no clarity of thoughts, and it’s all about sheer optimism and enthusiasm, even fake claims to look holier than thou before the media.
Well, I have not only been an information digger; I try best to get into the psychographic analysis as well. It’s rather a different approach on my part that I try best to dig deep inside their minds. And hence, I peeped into the social media profile of the real estate developers and their key functionaries to assess their new year resolution. After all, this is not just another new year but also the beginning of a new decade.
What I found out was that literally every real estate developer and professional has posted something along the lines of “2020 is going to be my best year ever.” Hope keeps us alive in a stagnant market like the Indian real estate where everyone lives with a wing and a prayer. Right? Come on now, we all do it, often to self-assure, if not brag on social media. It’s healthy to publicly set expectations for yourself. Well, the problem is when you actually don’t follow through on the claim.
So if you are planning to make 2020 your #BestYearEver, like we all do, then I have the most important question for you, “What will you do differently next year that will ensure you get different results?”
Cut, Copy & Paste industry voices
Let’s take some industry feedback first. Deepak Goradia – Vice Chairman and Managing Director, Dosti Realty maintains that the biggest learning for 2019 has been understanding the importance of assessing the potential home buyers’ concern and proactively doing everything you possibly can to bridge that gap between looking to buy and purchasing the property. The end user market is still very strong despite the economic slowdown. However, what buyers look for is the ease of the initial payment that needs to be put in when investing in a property.
“One of the vital changes required in the year ahead is some additional stimulus by the government to help increase investment in home buying by way of lower interest rates, the incentive for taking a fast decision in a short time period, a possible change in taxing structure, etc. From a developer’s point of view, it would be trying to liaison with financial institutions and come up with schemes that can ease the initial payment requirement of the potential home buyers especially for nearing ready possession and under-construction properties,” says Goradia.
Apurva Gupta, Chief Marketing Officer, Rivali Park is of the opinion that the year 2019 witnessed a couple of slowdowns in the Indian realty market. The unattractive returns on investments (ROI) in the Indian housing segment have further dropped down in most favourable locations, thus keeping probable buyers at bay. This further indicates that investors are required to eagerly wait for the market to recover. There has been an abridged homebuyer sentiment due to lack of reliance on under construction properties that have been delayed or stuck due to some reason and unsold inventories.
“Buyers and end-users likely to invest are refraining from investing into a depreciating asset; rather they prefer to wait in anticipation for realty values to drop down to their lowest best. The economic slowdown of 2019 did not witness much price corrections; buyers favoured to follow the wait and watch policy in a market where renting homes seemed to be an inexpensive option,” says Gupta.
Do these voices, be any stretch of imagination, look like a sector that has learnt its lessons and is ready to make amends for #BestYearEver? Unfortunately not! To me these overtones are more reflective of a routine preaching on part of the developer community as to what should the buyers do and what should the policy makers do. What about you sir?
Time to get realistic
2020 hardly promises to be the #BestYearEver for the Indian real estate, simply because the sector has historically been arrogant to read the writing on the wall. They continue to live with their fancy illusion that this is just another cyclic slowdown. The raw statistics of ever increasing migration to the cities and the housing demand make them predict for self-belief that sooner than later the market will yet again turn out to be sellers’ market.
Some of the learnings that could have goaded the sector to the road to recovery are:
Land bank is more of land liability; better focus on JV/JD
Know your execution capabilities; timely delivered smaller projects could be your better flagship
Listen to your buyers and be accommodative if you wish to sell under construction property
Learn what home buyers really want, instead of living with your own fancy ideas
Understand your scalability; simultaneous multiple projects is a debt trap
Lending is not all about switching the lenders and rollovers have a shelf life
Change your communication philosophy; gone are the days of monologue with advertising clout
Enhance ROI Understanding; brand trust outscores short term ROI goals
Working smart matters more than working hard and even the right intentions without doing right things won’t land you anywhere. Last, but not the least, identify who all are your “fuel my ego” breed around and get rid of them. Do understand the growing power of new age communication rather than have an ego to get your name printed with industry stories of mainline newspapers.
The very definition of likable, credible and trustworthy has changed in today’s marketplace. To adapt to the change is do-able and in 2020 having the paradigm shift in the mindset will make the difference between failure, or massive explosive growth.
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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