Jagannath Prabhudessai, President, Credai Goa
Real Estate in Goa had almost doubled in the last ten years. However, presently the state is staggering under the pressures of the inherited economic slowdown, says Dr Jagannath Prabhudessai, President, Credai Goa chapter. Besides, Single window clearance delay in approvals from the concerned authorities, non-formulation of clear-cut Regional Plan has led to projects get stucked, he says.
Excerpts of the Interview with Sandeep Pattnaik of Gharabari.com.
Q1 When big-ticket investments in realty sector are focusing on top cities in India, where do the dynamics in Goa stand?
A1 Goa is popularly called as “Rome of East” or “Pearl of the Orient” which appropriately portrays its insight in the eyes of an international tourist. Goa has rightfully earned the reputation of an idyllic retreat, a home owner’s paradise, as it offers an exquisite climate, a vibrant culture and is well-connected by International Charters and domestic airlines, rail and road. It is one of the prime cultural and tourists centre of India. Majority chunk of the tourism in India is accredited to Goa whose exclusivity lies in bringing in international revenue, much more than any other state in the country.
Real Estate in Goa had almost doubled in the last ten years. This growth can be credited first to the local need and second to investors within and outside the state of Goa. Presently the state is staggering under the pressures of the inherited economic slowdown.
Q2 Builders in the state are concerned over the delay in formulation of a proper Regional development Plan [RP] which had stuck their projects. Also systemic flaws in RP have lead to rampant corruption. What is your view about that?
A2 Non finalization of the regional plan has resulted in lack of certainty in the real estate sector. The regional plan is expected to provide clarity on issues like conversion of agricultural land into real estate & investment in infrastructure. However, the RP for Goa is in the offing, though the timeline for its launching is not yet clear.
Q3 Which are the other grey areas before the Real Estate developers in Goa those need quick attention for redressal? What are the recommendations of CREDAI-Goa to the Govt.?
A3 The Real Estate Sector in Goa has been staggering under the pressures of the inherited economic slowdown.
Oversupply, high interest rates and sluggish economic growth have not been able to pull down the residential prices. The real estate inventory has been gathered in heaps for long and will take months to clear the existing stock at the prevalent absorption rate. Builders are very cautious and are launching new projects carefully. The availability of fundamental construction materials like stone aggregate, sand and bricks is crucial for the quality and timely construction of projects. The ban and the paucity of sand have lead to a direct demand-supply equation leading to cost escalations and delays in project delivery. The cement sector is also reeling under cost pressures.
Single window clearance delay in approvals from the concerned authorities is one of the major reasons behind many project delays. The sector is looking for more restructuring in the form of single window clearance and granting infrastructure status to further boost the real estate sector.
Hurdles are due to certain policy which leads to delay in execution. Our industry needs continuous approvals. But execution comes to a halt when approvals don’t happen. We suffer on those counts. The buyer looks at the project where continuous work goes on.
Q4. How is the realty price hovering in the state for residential space? Report has been that, despite fall in home sales, it could not prevent pricing to come down in major cities.
A4 As mentioned, oversupply, high interest rates and sluggish economic growth have pulled down residential prices but to a trivial extent.
Investing in the property of one’s choice is not just based on a single decision. It is an amalgamation of various factors which play an essential role in the hunt for the perfect haven. Family aspiration, personal motivation, financial limitation and prevalent policy and real estate norms - all these impact on the decision in one way or the other.
It is very revealing that the younger generation in the age group of 25-35 years seems to be keen about the sector. 30 per cent of those planning to buy a home for themselves belonged to this age group. This is reflecting on the intent of a young generation that is really keen on realising its dream of owning a home! While, nearly 50 per cent who wants to buy property as an investment, were aged between 35-40 years. Another interesting finding is that very few wanted to upgrade to a larger home if they were living in their own house say 5%. The rest are those residing in rented accommodation are now wanting to buy their own home.
All this is still keeping them away from purchase because purchase an apartment or a flat is a big issue for common salaried man. They simply cannot afford the EMI’s. Purchase of Apartments affordable to top level employee in the Company. Therefore sale is restricted to these and unaffordable to the rest. The main factor actually is the economic slowdown.
Q5 Do you think any of the cities in Goa can be considered to be included within the Union Govt’s ‘Smart City’ plan?
A5 Prime Minister Shri Narendra Modi and his cabinet of ministers have brought visible macro economic changes. The ministry of urban development has announced plans to evolve smart-cities in all states of India.
Parameters like Information & Communication Technology and resource utilization intelligence, green cover and carbon neutral, digital governance, efficient transport, public hygiene and solid waste management, efficient law and order enforcement, public awareness and participation etc. structured the city to be smart. The cities in Goa is specifically lacking in these parameters and these are dilemmas that need to be addressed.
Panaji, the capital city is heavenly & has a number of old churches and buildings dating back to Portuguese era and is well connected to all the parts in Goa. Margao is the commercial capital of the state & has a railway-station, which is an advantage over other cities in terms of connectivity. Vasco-da-Gama has a port and close is the Dabolim airport. In reality the cities in Goa are harmonized. The University in Goa is near Panaji but away from other cities. Manipal Hospital and NUSI Wockhardt Hospital are two major hospitals & at two different locations. The industrial estates are in the interiors of Goa.
This is obvious that Goa is like a city-state in itself. It is apparent that cities in Goa have no appropriate infrastructure and facilities within its limits. Therefore the three cities mentioned could be considered as a single unit and be integrated into the expansion plans.
The sentiment of all stakeholders — developers, financial institutions in the state’s real estate sector has deteriorated. The silver lining is that realty developers are positive and an evident optimism is prevailing about the economic scenario. The Members of CREDAI-GOA are expecting an improvement from the announcement of the budget.