M.S.Yatnatti Editor Property Politics
Developers are embracing technology to reach their target audience and increasingly sales are digital and on social platforms
by Admin User - Sunday, 8 July 2018, 09:24 PM

By : M.S.Yatnatti editor and video journalist Bengaluru :Post the introduction of RERA and GST, fly by night operators are out and the real estate market has transformed into a more structured and accountable industry. A developer operating in a post RERA world needs to streamline systems, processes and practices to allow for greater transparency with the end customer.The new regulations, however, have also created a funding gap for developers, primarily during the initial stages of a project, where working capital needs were primarily being met earlier with the help of pre-sales.

It is important to note these regulatory reforms have also created a change in developer strategies and customer buying patterns. We now see developers splitting their projects into smaller phases in order to reduce completion time, inventory overhang and manage cash flows. Additionally, end buyers are seeking security in their investments, hence prefer to choose a developer with strong credentials and track record of delivery.Let us understand Real estate which is also a deeply localised business and each market operates with its own set of parameters hence, it is important to understand these further.

In Mumbai Metropolitan Region (MMR), developers are reportedly spending more time on planning their projects right from the configuration to the ticket size of each apartment, prior to its launch. Additionally, MMR has seen an increase in the launch of compact units catering to the middle income population constituting a majority of the home buying aspirants. Developers have realised that the perfect formula for selling, going forward, will be to have the right property in the right market and location at the right price.

Reportedly Pune has witnessed a similar trend to MMR. The market has observed a steady increase in sales as buyers seem to prefer well-designed and planned compact apartments. A few developers are going the extra mile to provide furnished units with fixture to drive sales. Today, almost all developers are embracing technology to reach their target audience and increasingly sales are taking place through digital and social platforms. Additionally, real estate broking and advisory firms are playing a key role in aiding developers outsource their sales function so that they can focus on their core developmental expertise.

Comparatively, and reportedly Bengaluru has a slightly divergent market scenario, with the influx of start-ups and healthy demand from the IT-ITeS sector. Here, developers are launching projects in the mid-segment housing category catering to the salaried workforce. Due to the growing need of IT and Office Parks, developers are also eyeing logistics and warehousing centres.

According to a MD of NBFC Compared to last year, the market demand in Delhi-NCR is being led by affordable housing with the average size of units being reduced. The developers here are catering to young buyers on the lookout for small and affordable apartments. Gurgaon has also seen a rise in commercial leasing, primarily driven by technology companies.

Industry stallwarts today subvention schemes designed in favour of homebuyers are the norm followed across markets for new projects. These schemes help developers drive sales and get timely funding from banks/financial institutions as well as work as a financial assistance tool for homebuyers with low or no burden of EMIs, until possession. In markets like Mumbai where af fordability has always been a big issue, subvention schemes have met with huge success, although at a cost to the developer.

According to reports commercial space is also witnessing a systemic change with more focus on developing smart spaces that are more people centric. These developments are interactive, lively and cater to the millennials. Mumbai, Bengaluru and NCR have also seen the emergence of co-working spaces, flexible working hours and hybrid offices. Aided by rapid urbanization, rising office rents and lack of quality ready-to-move-in supply, coupled with the millennial’s ‘pay per use’ culture (Uber, AirBnB) has created a demand for co-working spaces across most cities.. In reaction, developers are trying to be innovative by creating new-age & modern developments that are a mix of retail, hospitality and next-gen work spaces while also continuing with existing traditional commercial developments.

Real estate market now belongs to organized players who will grow from strength to strength in this environment of consolidation and strict compliances set by government under RERA & GST, as well as the changing trends and demands of consumers. It is also clear that demand has shifted from being driven by investors to end users. Hence, all new developments and customizations by developers are being done to attract them. In the current environment, understanding customer requirements within micro-markets and assuring the delivery of well configured units with flexible finance options will play an increasingly important role in making projects successful.