Q & A

Financial planning crucial for first-time buyers

Consumer sentiment, buying modalities and what people need to know before zeroing in on their dream home were just some of the topics that were discussed during RoofandFloor, The Hindu’s online portal event, ‘Realty Connect’ where M.R. Jaishankar, Chairman and Managing Director of Brigade Group, was one of the panellists earlier this month. RoofandFloor later spoke to Mr. Jaishankar on a range of real estate issues that are relevant for a home buyer.

Excerpts of the interview…

As a marketplace, we interact with first-time home buyers who are confused between budget and neighbourhood choices. In your opinion, what should be their priorities?

I am assuming that we are talking of salaried professionals. The priority must be on financial planning. They should earmark money towards monthly payments without getting into debt. This is important, just as location too. They need to choose a location based on their requirements. Are they looking to invest in a property or do they want to buy a home for themselves? What’s the distance from schools, offices and residences of other family members?

Another dilemma for buyers is whether they should opt for properties available for immediate occupancy or should they pick an under-construction property?

In my view, this depends on each individual’s financial planning, and requirements. If they are in a rented place and want to move into their own home, they can choose a ready home. If time is not a constraint, they can look at under-construction projects. Price and overall budget of a project also needs to be considered.

The deal about hindsight is it helps us see the turning points. In your opinion, what do you think triggered this slump?

I will not call this a slump. I think what has happened is more a case of excessive supply over demand. At that time, the economy was performing well and the expectation was that the economy will improve further. That did not happen. Global economic reasons also affected Indian economy – not just real estate but other markets as well did not grow at the expected pace.

We have noticed an increase in enquiries about budget homes. Do you think they can lead the market recovery?

Budget homes are indeed a major component of the pyramid, that is residential properties. I agree that premium homes have taken a hit. But in my view, what has happened is that investors and buyers looking for their second, third or fourth homes are postponing their purchases. So demand is there, but not as much as was expected.

Where do you see the industry heading in the next 6-8 months?

Every few months, we say the industry is going to recover. But this time, the industry is more confident about recovery.

The Budget has been well received generally. It has met the expectations of the majority of people. In the long-term, overall size of business will definitely continue to grow. With a regulator in place, the industry can be said to have matured. This might weed out smaller promoters, perhaps about one-third of today’s promoters will be expected to fall by the wayside.

That leads us into thinking about the Real Estate Bill that has been passed. What do you think of it?

It’s a mixed feeling. If the regulator is going to be just another authority that must be approached for approvals, then I can say that the industry probably did not require it. But as such, we must accept it and make the best use of it. I can say that the escrow mechanism as well as REITs are positives.

We have either worked with or observed many women in the real estate industry. Real estate is generally considered a tough field to navigate. What is your opinion?

Yes. More women are entering the business. Brigade is also working to hire more women employees. From our experience, we have seen that women employees perform better.

Also, we have noticed an increase in the interest level of women employees, even in direct construction coordination. One of the buildings in Brigade Orchards will have an all-women management team at its construction site. We know that women can take up this challenge.

(Mr. Jaishankar was speaking with RoofandFloor’s Anita Kurup)


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