The Banyan Tree Group is a Kolkata-based real estate company and a prominent player in the affordable housing segment. Prabir Roychowdhury, Director, Banyan Tree Group spoke to BE’s Aritra Mitra.
Q. Has the affordable housing segment improved after the recent tax benefit provided in the 2019-20 Budget?
A. Yes. For the first time there has been an improvement after the hastily implemented demonetisation and the introduction of the Good and Services Tax (GST). Also, the tax deduction of Rs. 1.5 lakh for the interest paid on housing loans in the current fiscal year up to March 31, 2020, has played an important role in improving the situation of the affordable housing segment.
Q. How is the affordable housing segment performing in tier-II and tier-III cities as compared to metropolitan cities?
A. The segment is performing better in metropolitan cities as compared to tier-II and tier-III cities. This is because in metropolitan cities, affordable housing enables a consumer to purchase a flat with various modern amenities like club house, gyms, swimming pools, indoor game facilities and community halls along with other benefits. All these facilities are available in a safe and secured housing complex. The penetration of such complexes, with modern facilities, in tier-II and tier-III cities are relatively less. However, metropolitan suburbs are witnessing a rise in the number of such complexes.
Q. What can be the long drawn impact of the present economic slowdown on the real estate market?
A. The present economic slowdown is bound to have several adverse bearings on the real estate market. If there is low purchasing power for the consumers, there will be lesser number of projects launched and the prices of the real estate market will be on check. This stagnancy of prices will impact investors and that is bound to negatively impact the real estate market.
Q. According to a recent finding, Kolkata witnessed a 19% increase in the sale of homes from January to September, 2019 which is more than the growth observed in some other metropolitan cities. What can be the reason for this?
A. Yes, there has been a higher sale of homes in Kolkata this year compared to other metropolitan cities. The main reason for this relatively better performance of Kolkata is the pricing of the industry. The price escalation index has remained constant - between 8% and 10% - and that makes Kolkata an affordable metropolitan for real estate consumers.
Q. What popular consumer preferences are emerging in the affordable housing segment?
A. Present-day consumers prefer to enjoy the benefits of modern amenities in a secured complex. They also wish to have a pocket-friendly apartment in a desirable location that will offer them a delightful lifestyle. Fitness spaces and gyms, swimming pools, community halls for social gatherings and club houses are some of the most sought after lifestyle enhancing facilities in the affordable segment.
Q. The situation in the real estate market has led to diversification for many leading players. How do you view this trend and what are the sectors in to which real estate players are diversifying into?
A. Due to the economic slowdown and its impact on the real estate sector, many prominent players are not being able to launch new projects and hence, the only option left for them is diversification. The prominent sectors include hospitality, education, healthcare, logistics, and many others. Many players are shifting from the housing segment to the commercial segment. We have our own hospitality wing and are currently in the middle of a new hospitality project in Mondarmani, West Bengal.