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‘Big gap in understanding RERA and GST’

Margao based Nanu Estates Pvt. Ltd., is one of the state’s oldest real estate player. The company completed more than 100 projects till date and is primarily in the residential segment of the market. Here Narayan Krishna Naik, director, talks to Serilda Coutinho on the current situation of Goa’s real estate industry and future outlook.

Q: How has 2018 been for the Goa real estate industry and what are the expectations for the current year?

Sales are slow and it has been like that for the last three years. It appears that people are confused in regard with the pricing. They want to wait and watch the market movement. A slowdown in sales has been observed from over three years in Goa. We are stagnating. People invest in real estate only if they have extra saving so it all depends on the overall situation in the country as well as in the Gulf to predict their purchasing power as most of our clients are Gulf based.


Q: How has property prices moved over the last two years?

Land as well as the apartment prices are stagnant over the last two years. Between the segments, it is the residential segment that is performing well. Commercial properties might work well in the metros or for Panjim city, for instance a commercial project like the Patto Plaza. But the major chunk of the clientele is for residential housing. In our case about 90 percent of our projects are in the residential segment.


Q: What is the typical profile like of a home buyer currently?

Most of the clientele are Goans, NRIs and those working on the ship. Purchase of our properties are mainly by locals looking into buying a house for their basic requirement. Our clients are in the market because they want a house for their own use rather than as an alternative or additional investment.


Q: Has there been an impact on sales post the implementation of RERA and GST?

There is a big gap in understanding RERA and GST as many concepts are not clear. Hence it has affected sales adversely. Many builders have not started new projects post the implementation RERA after looking into the guidelines. It is too early to predict the outcome of RERA as it has been implemented in the state just about a year back. It will take some more time to stabilize.  We have been compliant to RERA guidelines and had completed our paper work even prior to the implementation of the act. So we it did not make much of a difference to us.


Q: What are your ongoing projects that enterprise is currently working on?

Post RERA we have just started one project in Margao . Apart from this we also have villa projects in Colva. All the apartments and villas are being sold as ready-to- move-in properties once the occupancy certificate is obtained. This exempts us from paying the 12 percent GST imposed on under construction projects.


Q: How much has the shortage of sand in the state affected construction activities of local builders?

Yes there is a shortage of sand in the state and it has affected many builders. However we have an in-house sand manufacturing plant so we are not impacted with the shortage. With an in-house plant and most of the products that go into building manufactured by us we have a control over the quality of the construction. For example we make our own concrete blocks, pavers, metal and sand. While sand and metal is sold in the state, the concrete blocks and pavers are only for our captive consumption as they attract 18 percent GST on sales.


Q: Registration of property deed has gone online. How will this benefit consumers?

A switch to the digital platform is definitely a positive move. Online registrations have been made compulsory now and registrations through the sub-registrar office are discontinued. The system was earlier tried out in Mapusa and Panjim and implemented in Margao just a week back. Currently it is working on a trail error basis with the feedback given by the users and real estate companies. The process is time consuming. It is an ongoing process so it is too early to comment on the usefulness of the platform but the expectations are that it will make the process of registration much easier in the future.


Q: As a local builder do you have plans of venturing out of Goa? 

No there are no plans. There is plenty of scope in the state. We have projects in the pipeline but are yet to decide where to launch. The reason for withholding the projects is poor sales. We will launch it at the right time depending on the market. Margao and Colva are where we have ongoing projects while our completed projects are in Margao, Panjim and Sangolda. We have not worked ventured into studio apartment. Though the trend is popular in the north coastal belt in the south there is no demand for it. Our presence in Goa is across the state including Panjim, Mapusa, Ponda and Porvorim but majority of our properties are located in the south.  We also develop plots for slae. Earlier plots were sold like hot cakes. We currently have plots in Ponda, Navelim, Vasco, Mapusa and Varca.


Q: What about constructing green buildings?

Sapna city in Margao is one of our green compliant projects approved by the Indian Green Building Council. Building green increases the construction cost as there is an additional cost it comes with. But the cost of living for the residents is much lower as they can save on electricity and water with the use of solar energy and rainwater harvesting among other benefits.

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