It is the prevailing assumption that the implementation of Goods and Services Tax (GST) and Real Estate Regulation & Development Act (RERA) has made a long term influence on the real estate sector across the country. With the coming of the RERA and GST, the real estate sector in India is expected to see some serious changes. The consequences of policy changes are going to be long term. How it is going to shift the market, is yet to be seen.
Here is an interview with Nasir Mohideen, Chairman and Managing Director of the well-known construction house, Westline Builders, who has expressed his views on GST, RERA and the current real estate sector. Below is the brief of his interview.
What is the impact of GST on real estate sector? Is it as huge as it is portrayed?
Real estate sector is one of the most pivotal sectors of India's economics. Real estate sector also plays a very indispensable role in employment generation in our country. The value of real estate sector can be understood with its average 13-15% GDP contribution which in turn excites market for more than 250 ancillary industries and Government backed utilities.
In fact, as per my perspective, The Government of India neither had nor have the plans to adverse tax the sector unmitigated. Mostly, the earlier Service Tax and VAT together was charged to the purchasers between 11.5% to 13%. GST is now being charged at 12% after taking into consideration of the land which is GST exempt. Consequently, in reality, the commercial taxes for real estate has not changed much at all. It is much of a much, six or half dozen; it is more of a propaganda of cynicism than something that we all should worry about. The impact of GST on real estate sector is expected to be neutral under GST. If said right, there is going to be a substantial benefit from GST to developers and contractors as it will subsume and replace the current many indirect taxes, thus making it simple.
Nevertheless, I strongly wish that the Government will take a proactive role and lead to encourage the first time home buyers. Like in most of the developed countries by giving one-time specialized schemes; such as reduced rate of GST and reduced rate of registration charges. Middle-class people and now the salaried youngsters make their first investment towards their house which secures their future as well appreciate their wealth over time. Such schemes will encourage these first home buyers and shall be a boost for the real estate sector and shall also benefit the Government at large in direct and indirect taxes such as taxes on furniture, interiors and their vendors and so on.
What would be RERA’s effect on real estate?
RERA should be welcomed. It is supposed to happen as we head towards more transparent, more regulated and well-put country. It is always a better move. Even though when I read it, it sounded more like one-sided agreement; it will benefit the developers as well as consumers in the longer run. Developers henceforth shall be very conscious of their promises and progress schedule which will, in turn, save them from over engagements. Notwithstanding, the cost of adhering to all the sections of the act shall definitely add and consequently shall escalate the prices if not by too much at least to some extent.
The down part is there wouldn't be any pre-launch discounts, early bird offers etc. Earlier developers developed through internal accruals and presales. Which means they invested whatever it needs from their own pocket and for the rest they went to people. Therefore, a great deal of profit was passed on to the early buyers in the form of heavily discounted stock. This shall not happen henceforth. It is time for the banks to smile. Yet, it is the law of the land. It is here to stay and essentially it takes care of the concerns of buyers and tenders the entire flat booking procedure super transparent.
What is the current trend of real estate in the city?
Currently, Mangalore's residential property market is dominated by end-users. Mangalore is apparently the second fastest growing city next to Bangalore in our state. According to Numbeo, a user generated a global database, Mangalore ranks best in India and 41st in the world for quality of life, 12th in the global list for health care. Out of our first-hand experience, the opportunistic speculative investors are also making a comeback to the real estate as an investment category. The tier 2 cities with well laid out infrastructure and connectivity are also attracting IT giants. I have heard from my good friends in the IT industry that a major IT company has taken a large commercial space on long term lease in the city and other major players are also in look out for spaces. Residential demand is expected to pick up towards the end of 2017, but this time the recovery will be sustainable and based on much sounder market fundamentals.
Your project Westline Signature has got attention to our Mangalore in terms of vertical construction methodology. We would like to hear more about it.
Westline Signature is our first step towards incorporating international style, look and feel of construction in our own soil. Most of the Mangalorean's are well informed and well-travelled. They do understand newness, true luxury and do welcome such approach. A luxury apartment can be a true luxury only if it gives an opportunity to the occupants to stay attuned to the high life of the building and amenities it offers and experiences all the joy that comes with it. Westline Signature is work of undisputed architectural marvel, with the stunning amalgamation of stylish design and modern architecture. It is the hard work of many talented and well know national and international consultants. Its central and convenient location, the ease of getting in and out of the city and the positioning in the most elevated and posh locality of Nanthoor Mangalore adds to its strengths. The project is coming up in a verdant land wherein the structure occupies only 20 percent of the total area with about 80 per cent of open area to give the much-needed breathing space to the residents.
Apart from being the proposed tallest project of South India. Signature boasts of a few distinctive features. It is one of its kind of project designed to ensure minimum sunlight on the outer walls to reduce heat and ensure coolness. It is an ‘L’ shaped structure with minimal common walls thus ensuring the much-needed solitude to the inhabitants. The wall to wall french windows facade ensures that the apartments will have a pleasant brightness during the day. This is the first residential project of Mangalore with a proposed central chiller air condition system, thus giving a huge health benefit to the occupants contrary to the gas operated split AC systems. This centralised A/C shall also provide the benefit of hot water as to the residents 24X7X365 as a byproduct of heat generated by Air Conditioning system. The central A/C and the absences of individual heaters will also ensure energy efficiency saving nearly 50% of the energy bills of the residents.
The project is now in its ground floor stage. The unique and massive foundation of the upcoming skyscraper was constructed in a short span of as little as 45 days for such a tall tower using modern technology.
For current construction update and progress images or for any other update, Mr. Fraz Ahmed, Head of sales and marketing from our company can help on 9900033888. Or one could directly visit our our website http://westlinebuilders.com/signature/
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