Event Report- Real Estate: Trends, Issues & Consequences

Moneylife Foundation on Wednesday organised an interactive discussion on real estate titled ‘Real Estate: Trends, Issues & Consequences’ jointly conducted by industry experts Pranay Vakil, Chairman, Knight Frank (India) Pvt Ltd and Pankaj Kapoor, Managing Director, Liases Foras.
Speaking on the occasion, Pranay Vakil said, “One of the major reasons why the prices are high today is infrastructure. Nobody wants to travel long distances for work. Title insurance is another major issue in this industry.”
He also spoke on what he learnt from the short recession, “Liquidity is vital. Developers realised this when sales volumes declined drastically due to the liquidity crunch. The slowdown gave customers ample choice as affordable housing came into the industry in a big way. Investors are ‘fair-weather friends’, Sell ‘ready’ products during a slowdown; contracts can be broken; healthy growth can be sustained by a gradual increase in prices; high-value transactions hyped by the media are not the ‘real’ market and the need is to innovate sales strategy.”
Mr Kapoor said, “Are we heading towards another asset bubble? Are the prices affordable? What is wrong with the valuation and where is affordable housing? The government is responsible for hiking prices.”
He added, “We need a regulator for this industry to grow and curb wrong practices.”
The workshop saw participation from several investors, research analysts and industry experts. The event witnessed a healthy exchange of ideas between the participants.
Ms Kavita Hurry, CEO, ING Vysya Mutual Fund asked the speakers to highlight three major issues in the sector.
“Three most important things we need in real-estate as a priority are—rental housing, all over the world there is organised rental housing. Here you are left at the mercy of the broker who does not know anything. Secondly, infrastructure— the government cannot be a provider, it can be a facilitator. Thirdly, all these need funds, so get foreign parties excited about India,” said Mr Vakil.
Mr Kapoor said, “We need to address the congestion issue in the island city. If we move five buildings from the island city to Bandra, there will be a whole shift in the crowd. If we can shift Mantralaya, BSE or the Income-Tax office, there will be a difference. There are three-four magnets which draw the crowd there.
Everyone knows about it but there is no intension to do that because they are sitting in luxurious places. We need to add more connectivity. We need a complete master plan for Mumbai to reduce the congestion. We need a regulator, and urban planning.”
Other industry experts also voiced their opinion. Raymond Dastur, Vice President, real-estate, Shapoorji Pallonji said, “The government has to play an important role to facilitate housing which is affordable. We need the regulator who will facilitate the business.”
“FDI has already come into the city and we still have to see the results. There needs to be more transparency for FDI to flow into this country and more strict laws so that foreign players are also convinced while investing,” said Jesal Saghvi, executive vice president, Westbrook (India) Advisors Ltd.
The consensus among the audience was that there is a dire need for a citizen action forum to make higher authorities listen.

Date: 05 May 2010
Time: 2:30pm to 6:00pm
Venue: 304, 3rd floor, Hind Service Industries Premises, Off Veer Savarkar Marg, Shivaji Park, Dadar, Mumbai 400028

You can watch Moneylife TV on YouTube of previous events