Rohit Gera, MD, Gera Developments, in an interview with the Herald speaks about the real estate market in Goa, their own performance and property as an investment option. Excerpts of the interview.
How do you see the property market in Goa? The Goa property market is currently stable and following the annual trends of absorption. The last 5 years Panjim market has had approx 7- 8 months of supply in November and December. This year is no different. We believe that while the Goan market is small, the customers are discerning. This is true both in the residential and commercial space.
What has been the response to your projects in Goa? We have had an excellent response to our projects in Goa. We are delighted that over 90% of our customers are either from Goa or have Goan roots. This is testimony to the support that we have received for our projects in Goa.
How many of your projects in Goa have been completed and how many under completion? We have already completed 3 projects covering 7 lakh sq ft. Of the 3 projects, one was residential and two were commercial.
At present, we are in the process of launching 2 new projects.
One residential and one commercial project.
In the projects still up for sale how much is already sold out? Do you buy back from customers you have sold to? We are currently at a sell out of 95% in our projects.
Has the mining ban affected the market for property? The word on the street is that prices are going to correct.
The mining ban has definitely affected sentiments in the market. We find that while people are affected by the ban, a deeper discussion leads to a finding that the majority of people expect that the ban cannot last indefinitely. As such, there is a degree of optimism that things will turn around sooner rather than later. The effect therefore is that some buyers are deferring their purchase decisions.
Have property prices stagnated or are they dropping as a result? If so, is it a good time to buy now? Timing any market be it the stock market, commodities market or currencies market is extremely difficult. If one takes this view, the long term prognosis for realty investments is extremely positive.
Real estate is the only investment opportunity where one can obtain a loan to finance the investment. Shares, gold etc cannot be bought by paying 20% of the cost of the investment and 80% finance. In this situation, the property has to show a long term growth of over 10% to provide a higher return on the investment made by the purchaser – this is something that we have seen happen over the last many decades in the real estate sector. Further, real estate is also the only category of investment where the income generation is possible from the asset through rental income. All in all, any time is a good time to purchase property if one has a long term outlook toward the investment.
How do you stand apart in an increasingly crowding market? Having been in the real estate sector for over 40 years, we understand that the most important thing for the customer is the fact that the developer is reliable and not there to make money at the expense of the customer. The customer wants to receive what has been promised in not just the agreement but also in the brochure. We are proud to state that we have given all the features and amenities and some more in all our projects.
We are also the only developer who offers a 5 year warranty on all our projects – this covers any manufacturing defect and we stand by our products.
We also believe that we must be responsible developers and our projects must be planned keeping the ecological balance in mind and minimize the impact to the environment. This too is something that our customers appreciate.
Do you command a premium in the market? How much in terms of percentage other parameters like location, amenities etc remaining the same? Yes we command a premium in the market.
We believe customers are willing to pay a premium of 10%- 15% for what they expect from us and what we give them.
For example, our agreements have a clause which states that if the area of the flat is less than what is agreed to in the agreement by more than 0.5%, we provide the customer a refund for the area that is less. While this does not happen, it provides the customer a great deal of comfort that they are dealing with a brand that they can trust. This trust is a part of the premium that customers are willing to pay to purchase property from us.
It is critical to note that a property is not a short term purchase. People come back to us sometimes 20- 30 years after having purchased from us. We are around to provide them help, support and necessary documents even after decades of having sold the property to them. This sort of comfort translates into the premium. [H]