The Real Estate industry in Gurgaon is passing through a critical phase, as there is huge oversupply at the moment; and it will continue to hurt sentiment, as more projects are being launched across the Millennium City. Prominent realtor and Chairman of Remax group, Sam Chopra, believes that to give a fillip, and bring middle income customers into the market, there is need for a slight price correction.
The right price for affordable property on Dwarka Expressway should be something between Rs. 3,500 to 5,000 per square foot, and the price of HUDA plots also needs to come down, he believes. If the builders can somehow launch the new projects in this price range it will definitely help the end-users, as they are crucial for any market to remain sustainable, says Chopra. He also feels that though the investors have played an important role in building and boosting the Gurgaon market, the time has come to have a healthy mix of investors and real end-users in realty projects.
It is pertinent to mention that in Gurgaon a ‘new’ property normally reaches the hands of an end-user in almost the third or fourth transaction. The majority of the buyers in the market right now are those who are looking to invest for a short term maximization of profits, say observers.
In Chopra’s view, another important move could be to launch projects that make it feasible for builders to sell 1000 square feet flats for somewhere between Rs. 35 to 40 lakhs. “It is only at this rate that a person earning around Rs. 5 lakh per annum would be able to buy a flat. Right now a huge population in this group has been left out of the real estate market,” he asserts. When asked which areas in the City the end-user should look at for buying property, Chopra points to the Dwarka Expressway, as well as projects on the Gurgaon-Faridabad Road. Most other areas in Gurgaon are out of the reach of the average buyers/end users, he says.
A major challenge will be posed in the near future when the Delhi government allows vertical expansion, as per the latest Master Plan, he predicts. There will be massive supply in the areas of North Delhi (around Kanjhawalla) and the area from Sultanpur to Chawla – that has a large number of farm houses. “Delhi beats Gurgaon as far as urban infrastructure, power, and municipal services are concerned. Once good supply at the right price comes in Delhi it can hurt Gurgaon,” he says.
To avoid this situation the government will have to improve infrastructure in the City – particularly roads, power, connectivity, and transport services – including the extension of
the Metro.
Putting a question mark on the efficacy of the Dwarka Expressway, Chopra says it remains to be seen how it becomes an integral part of the Gurgaon eco-system. “I do not know how a person from the Expressway will be able to come seamlessly to DLF Phase 3 or 1. There need to be internal roads that ensure access, but this is not happening,” he asserts. Instead of helping the cause of the Millennium City, Chopra predicts that the NPR, SPR, KMP and the Faridaboad road could create a greater threat for Gurgaon – as Manesar, Faridabad, Sohna, and Dharuhera may end up giving internal competition, and putting pressure on the City.
The Gurgaon City managers need to understand that far from being a suburb of Delhi, Gurgaon has emerged as a metropolitan city in its own right, and needs to be managed like one. “The complacency of the administration and politicians needs to end. Unless steps are taken, only MG Road, National Highway, Expressway, and Sohna Road to some extent, may survive. If prices go down in neighbouring Chattarpur, Pushpanjli Enclave and areas near Dwarka, the investors will rush there,” he predicts.
Another important step that the government could take to bring more transparency into this sector is to push for the Real Estate Regulatory Act. “This Act, in its present form, is adequate to ensure that builders with good credentials operate in the industry, and there is responsibility and accountability among the builders, brokers as well as buyers. Those who do not conform to the ethical standards will be weeded out,” he asserts.
His own company, Remax, is creating a set of certified brokers in every part of the country, by imparting education, support and technical knowhow-so that they can serve the clients in the best possible manner.
Right now no one is monitoring the real estate industry; while stock markets, commodities and insurance have got a regulator, there is no mechanism to regulate this business, which accounts for almost half of the income that an average person generates in his lifetime, he says. The Haryana government’s decision to go for compulsory licensing of brokers has no teeth as well, as any one with requisite fees can get a license, he quips.
NAR India Convention in Gurgaon
To bring about transparency, and to streamline the profession of Real Estate brokerage in the country, a convention of property professionals is being organized in Gurgaon, by the Association of Property Professionals (APP Delhi-NCR), under the auspices of National Association of Realtors India (NAR India). Giving details of the event, Samir Chopra, President of APP-NCR told Friday Gurgaon that a series of events will be held as part of this Convention – on October 5, 6, and 7.
Real Estate portal 99 Acres and Remax will hold training programmes on Multiple Listing Service Certification, and Role of technology in Real Estate, to equip the new age brokers with the necessary skills. Sam says that the objective of this Convention is to promote transparency, accountability, fair dealing and ethical practices, for the overall good governance in the industry.
Remax and Franchise India will also organise an Award Ceremony, along with a felicitation dinner, for members of NAR India as well as APP. Prominent members of the Real Estate community, including top builders, real estate professionals, and members of civil society and the Administration, are expected to attend the Awards, says Chopra.
Chopra also revealed that NAR India organises four such meetings of the board members every year, to take stock of its activities. This organisation comprises 24 city-wide associations of Real Estate professionals (like the APP), that are trying to bring about an institutional system in the Real Estate brokerage industry. NAR India is also the official owner of ‘Realtor’ trademark in the country, and today only 2000 people can officially use it, he says.
The Multiple Listing Service Certification, which is being created for the first time by NAR India members, is a mix of what is being offered by Facebook, and sites like 99 acres. Thousands of members of NAR India will be able to access property listings that are genuine, listed by serious brokers. In Delhi NCR, APP has around 5000 brokers working with its member associations.
Chopra says that the objective of NAR India is to provide meaningful Real Estate education to Real Estate professionals, particularly its members. Keeping this in mind an ‘Education Committee’ has been created, with members from different State Associations, to conduct Real Estate programmes, and certify Real Estate professionals based on standardised education programmes, he adds.
When asked about the reason behind the efforts to promote education and networking among Real Estate professionals, Chopra says that the objective is to create a set of professionals who do not exaggerate, misrepresent or conceal pertinent facts related to a property or a transaction. “We want to create a set of professionals in the Real Estate industry who can do business ethically, and ensure that the interests of all the stakeholders, including buyers, is safeguarded,” he asserts.
In his opinion the Real Estate industry right now is highly unorganised, and there is a need to streamline and scrutinise the participants. Right now any one and every one can become a broker, without any knowledge of the business, and this is what is harming the industry, he feels. Through these events NAR India, APP and similar organizations are trying to bring some order to the realty business, he states.
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