PR Blog

Real Estate is Improving, But Developers Are Not

The title of the post says it all. The current trend in the real estate market is one of optimism and upswing. As much as I hate to put a dampener on this mood of joy, I feel that someone has to look at the picture from a more realistic standpoint. Hence, this post.

So, let us begin by examining the reasons behind the title of this post. How is it that real estate is improving but the developers responsible for the market are not? For starters, there are many things to cheer about in the real estate market. Buyers can take advantage of a slight reduction in prices of built-up projects and established developers are launching new projects targeting the middle-class buyer. Infrastructure, too, is improving in far-flung areas and previously neglected regions. Gurgaon is the biggest example of this infrastructural development.

The media, too, is casting a favorable light on the real estate sector. These news reports in the Indian Brand Equity Foundation and The Economic Times are just an indication of such optimism. On the economic and corporate fronts, organizations have started hiring thus signaling an end to the gloom of recession.

These factors, collectively, boost the morale of the property buyer and give him newfound hope in the real estate market. Unfortunately, when he does go to buy that apartment or invest in the real estate market, he returns disappointed. Why? Here are the reasons.

One, just look at the promotions. These are mainly offers that are of little or no use to the middle-class end user. After all, does a buyer really want a car with the flat?

Secondly, there are umpteen number of projects by builders that are hanging in the air with no clarity on their completion. People have lost faith in investing their hard-earned money in projects that have a completion timeline of two to three years.

The overall reputation of so-called reputed builders has also been hit dramatically by last year’s recession. Builders and developers have not been able to live up to their commitments to the customer, thereby eroding their name and reputation considerably.

Moreover, the recent launch of “affordable housing” by several developers is somewhat misleading. After all, what is “affordable” for one may not be so for another. Moreover, the affordable tag often does not include additional and hidden costs that make it difficult for a buyer with a budget of Rs. 20-25 lacs to buy an apartment.

Factors such as these make it difficult for the average, middle-class buyer to realize his dream of buying an apartment. The real estate market may surely be maturing and improving but I really can’t say the same for many developers. They really need to start looking at the average Indian buyer with renewed respect and go that extra mile to earn his trust and loyalty once more. Offer prices and projects that are realistic. Commit and deliver. Clarify affordability. Avoid hidden costs. These are just a few. Am sure you, the consumer, can come up with many more.
Do share your views and experiences with the developers and real estate market in India.