Mumbai: Manju Yagnik, senior vice-president of the Maharashtra unit of ‘NAREDCO’, an organization of the real estate industry, says that Indians living abroad (NRIs) live in the real estate market of the entire country including Mumbai-Maharashtra. Looking at the growth prospects, I want to invest. Therefore, the government should encourage by cutting stamp duty or tax. This will help strengthen the falling rupee by attracting permanent investment of NRIs. With regards to the current situation, price trends and outlook of the realty sector Manju Yagnik, Vice President of Nahar Group There was a detailed discussion with the commercial editor Vishnu Bhardwaj. Manju Yagnik, who has been in the industry for over 25 years, is one of the leading women developers in Maharashtra. Under whose leadership Nahar Group has always focused on building quality construction and convenience homes, the dream of home to 10,000 families has come true across Mumbai, Pune, Ahmedabad, Chennai and Jalore so far. Here are the highlights of the discussion:-
- After Kovid, the Maharashtra government had cut the stamp duty, then there was a big jump in the sale of houses and the revenue of the government. Does the government then need to boost the realty sector by reducing stamp duty?
Absolutely. There is a dire need to cut tax at this time, as this will not only benefit the realty sector, but the state and the entire country will benefit greatly. At present, NRIs are eager to invest in the real estate market in India, especially in Mumbai-Maharashtra. If the government gives incentives by cutting stamp duty or other taxes, then a large investment of NRIs will come in the real estate market. Which will not only strengthen the weakening rupee, but by giving tax exemption, lakhs of middle class families who are trying to make their dream come true will also get encouragement. Not only this, it will also increase the revenue of the government. Earlier also when the stamp duty was reduced, there was a huge increase in the revenue of the government and the economy of the country and the state was also supported because this industry has an important contribution of about 8% in the economy.
- Mumbai continues to be the most expensive city. It is not easy to make a dream come true here. What are the reasons for this and what steps should be taken to make it affordable?
See, Mumbai is a costly city for two big reasons. One being the financial capital, employment opportunities are highest in Mumbai Metro. Due to which the demand for homes is also high. Only when Tier 2 and 3 cities are developed as smart cities, the prices will be stable here. The second reason is that the land, construction cost and tax burden is very high here. 50% of the total project cost is spent on buying expensive land. Then the construction cost is high and in the last one year, the cost has increased by 20 to 25% due to the cost of construction material. Apart from this, debt is also very expensive for the developer. Therefore, to make it affordable, the government will have to speed up the project clearance process along with reducing the tax burden and the Reserve Bank will have to reduce project loan rates.
- What is the trend in property prices going forward?
It is such that there is no scope for the prices to come down as the developer’s profit margin has remained very low due to the increase in the cost of construction. Now the finance cost has also started increasing due to increase in interest rates. The tax burden is also high. Demand is increasing continuously. With the boom in the economy, demand has started increasing in the affordable as well as mid housing segment. Home sales in 8 major cities of the country including Mumbai, Pune have increased by 60% to a 9-year high during the first half of 2022. Property prices will continue to remain in an uptrend due to increased demand. Therefore, it is the right time to invest in housing property.
- Will the increase in home loan rates affect demand?
Home loan interest rates have increased from 6.5% to 7.5%. Despite this, rates are still at lower levels. Therefore, there will not be much impact on housing demand. And now due to the reduction in oil-commodity prices, the inflation rate is also expected to come down. Then probably the Reserve Bank will not increase the interest rates any more.
- What new housing projects is Nahar Group launching?
We currently have premium housing projects running in Mumbai, Pune and Chennai. Recently launched ‘Amaryllis Tower & Plaza’ with modern amenities at Nahar Amrit Shakti Township, Chandivali, Mumbai. The project is under construction at Balewadi in Pune. There are plans to launch some more new projects this year.