With the real estate sector gradually gaining momentum in the city, realtors and developers feel that people are slowly coming out to make more purchases. Venu Vinod, managing director, Cybercity Builders and Developers spoke to Express to provide a better perspective.
Have people finally come out of the ‘wait and watch’ mode in the city after bifurcation?
Post-bifurcation we actually expected the prices to come down, but if you observe the trend in the market, the prices for high rise buildings have gone up. But definitely things have improved from before. For example, on an average we sell 25-30 apartments a month, but earlier we used to sell around 20. We have a lot of outsiders buying apartments. So there is an increase in demand.
What is your view on the government’s initiative on housing for all?
The cost of land is a major cost component for any real estate project, but the banks and financial institutions do not provide funds to purchase land. We wish the government directs the banks and financial institutions to help the developers with loans for purchase of land and subsequently for developing it. Moreover the real estate projects face a large number of taxes (i.e. VAT, Service Tax, stamp duties etc).
We request the government to introduce a proper tax regime which will simplify the calculation of taxes for the real estate projects and introduce a system of a single challan for submission of all the taxes making it easy for the developers to calculate and submit the taxes.
A What are the challenges you face as a developer?
As a developer there are a lot of challenges, mainly in the construction process. We do not have any control whatsoever over the cost of raw material.
I cannot build total apartments and then sell, because the interest rate is so high, the product pricing will be very high. So the main model followed by 70-80 per cent of the builders all over India is to book and then build. So we are not in a position to control our input cost, whereas our sale price is fixed. Second major concern is the labour component. Getting skilled labour is very difficult.