'We aim to provide luxury housing at affordable prices'

“Our objective of venturing into different sections of housing is to provide luxury at affordable prices and ensure quality living for all,” says Ram Raheja, director and head, Architecture & Design, S Raheja Realty.

Ram Raheja discusses the issues plaguing the realty sector and future prospects of the industry in an interview with Ganesh Nadar.

How important are clients to you? Everyone has a dream of owning a house. So how do you deal with customers who have a small budget?

Clients are of utmost importance to us. At S Raheja, our aim has always been to provide quality homes to all.

Due to high disposable income and greater aspirations, every buyer today wants to live a better standard of life.

Thus, keeping in mind this pyramid of society, the company ventured into mid-level/ affordable housing on the outskirts of Mumbai and other tier-II cities.

Our objective of venturing into different sections of housing is to provide luxury at affordable price and ensure quality living for all.

Banks give housing loans easily to salaried persons but not to small businessmen, is there any way you as the builder can assure him a loan?

At S Raheja, we value the aspirations of our patrons and try to make the process of buying a home as comfortable as possible for them.  

It is our dream to build and provide housing for as many people as possible.

The company makes sure that all the approvals required for the development of the project are in place so that the buyers do not face any problems while applying for a loan.

However, the banks have their own regulations and processes to follow and we do not interfere with those.

Therefore, though we never discriminate amongst our buyers, it is not possible for us to assure them a loan.

The cost of raw materials are rising as if there is no tomorrow, how do you calculate costs and prices in such a situation?

The price of all the raw materials, especially cement has risen significantly in the last few months. The impact of that on the real estate sector is inevitable. 

Given that the policy of our company is to provide luxury housing at affordable price, it is a challenge to calculate costs under such circumstances. Therefore, it is a hit which the entire industry is taking and we are no exception.

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Most businessmen consider the government an impediment, how is it in your sector?

With the public and private sectors working together, pros and cons are expected and real estate market is no exception.

Our company aims at providing quality projects to the society and therefore we are open to working with all segments of the industry who share the common goal.

With rent acts keeping rents at unbelievable rates decided in the fifties, old buildings are never repaired. Redevelopment is the new mantra. What is the potential of redevelopment?

Re-development is our company’s forte. With a limited supply of land, especially in island cities like Mumbai, we see redevelopment defining the urban development in the future. The demand in this sector has seen a great rise in the recent past and it is growing at an equal pace by opening multiple opportunities for industry players across the city.

The building industry pays the highest tax to the government but you are not considered honest businessmen. You are treated like criminals by the government, why is this?

S Raheja Realty is a trusted name for three generations. We have earned the faith and respect of the buyers and government alike.

However, there is a lot of negative perception about the real estate market. This is due to several reasons like the builders finding loopholes in the business and using it to their advantage.
Also, a lot of times the projects remain unfinished and builders do not deliver what was promised to the buyers.

Negative impressions are easy to form and therefore just like in any other business, due to the misdoings of a few, the whole industry gets blamed.

When will the white money, black money components of flat rates in cities stop?

It looks positive and we are looking at improvements in terms of finances in the coming years. With transactions happening more systematically through banks, the scope for illegal handlings is on the fall.

With the new rules that the government has come out to protect buyers, has it made life difficult for you?

The new regulations have been a welcoming change. It has been to our advantage, as we believe in 100 per cent transparency in our dealings.  

The new rules make things very transparent thus making the industry a level playing field for all builders.

It allows people to choose builders on the basis of quality of construction and not other gimmicks and tricks.

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What have realtors done that the government thinks that buyers need protection?

Some developers find loopholes in the business and use it to their advantage. Also, some of the projects remain unfinished and some do not deliver as per their commitment. Negative impressions are easy to form and therefore just like in any other industry, due to the misdoings of a few, the whole industry gets blamed. 

We at S Raheja believe that our buyers are the most important part of our organisation and whatever we do is with their best interest in mind.

As a policy, we do not launch any projects unless all the approvals are in place, irrespective of the demand or any other situations in the market.

What is the impact of the falling rupee on the sector?

The impact of the falling rupee has been manifold. Good part is that we are attracting positive NRI investment in the real estate market in India.

However, the negatives are plenty. The cost of the building materials have raised, there has been reduced cash flow in the market.

All this has an effect on the construction cost and the net price of the final product. From sales view point, the sentiment of the buyers from various other industries is not positive since there is great uncertainty.

What are the reasons for the slowdown of the real estate market in India?

We believe that the real estate sector has great potential in our country. India as a country has a great young population and with its combination of economic growth and aspiration for a better living, we believe there will always be a great demand in this sector. 

The demand differs in different parts of the country and even within two areas in the same city. 

However, this period is a passing phase due to various factors like falling value of the rupee, certain new RBI regulations and a general uncertainty in the market, which makes investors apprehensive.

What is the impact of this slowdown on the developers and builders?

As discussed, the impact differs from builder to builders, in different parts of the country and even within two areas in the same city.

We at S Raheja Realty carefully select our projects and make sure our projects target a real user, building in areas where there is a great demand and limited supply thus our sales is not subject to the sentiments of investors.

Therefore, our company is not affected as much by this phase.

What kind of measures are taken to increase sales during the festive season? 

The company places the interests of its buyers before anything else and the pricing is done keeping that in mind. Therefore, as a policy the company does not give any special offers or discounts to them.

However, there is always a sprit of festive investment, thus during the festive season and we work on increasing our marketing strategies to make the most of this period.

How do you see the growth of luxury housing in tier-I & tier-II cities?

There is a huge demand in the tier-I & tier-II cities. The aspiration for a better standards of living and the economic growth over the last decade is a great factor which has created this demand.

S Raheja ventured into this segment last year, Some of our projects in places like Palghar and Varanasi have had a great response.

We are also looking at expanding within this segment it self by entering more such tier-II cities. 

Most of the buyers here are first time homebuyers. Also, people who are looking for a top quality product in their city.

We are aiming at providing a mid-income luxury housing (luxury with reference to providing the best amenities and quality in the respective areas).

What is the mindset of the buyers looking at investing in luxury homes?

Luxury is a very subjective perception and means different things to different groups.

What is luxury in the context of a city like Mumbai may not be so in tier-II cities like Varanasi. We believe in providing the best quality products and amenities within the budget of the respective groups.

Why is S.Raheja venturing into mid-cap housing, is there a demand?

Indian real estate market is vast owing to the huge population. In a modern Indian family, both the spouses are working which leaves them with greater disposable income.

This ensures that there is a constant demand for quality housing.

S Raheja recognised this and wanted to reach out to all the segments. Some of our projects in places like Palghar and Varanasi have had a great response.
We are also looking at expanding within this segment it self by entering more such tier-II cities.

What do you prefer building, luxury homes for the rich or affordable homes for the poor?

Every project is just as special; working in different sectors and programs allows us to explore different special contexts within diverse urban fabrics. This is very exciting for me personally.  If talking about a preference, projects that give us the scope to explore our creativity and make a difference with our work are always welcome.

Will you build homes for the poor if government gives you the opportunity?

Given an opportunity, we would love to build homes for all the sections of the society. If the government is ready to work with us, we will ensure that quality homes are made available to as many Indians as possible.