India’s real estate industry faced unprecedented challenges due to coronavirus. The pandemic brought construction activities to a halt and severely eroded the market of its potential buyer-base. Property transactions dipped to near-zero level during the nation-wide lockdown. The real estate sector hopes for a better future. Managing Director of Utkal Builders Ltd, Sharad Baid shared with Orissa POST about his take on the future of the sector in the post pandemic period.
What is the current status of the real estate market of Odisha? How did the pandemic affect it?
Covid has certainly impacted the market but I guess the general public has realised the importance of a home. A home is where your safety net is. In March when the whole world was confined to their homes due to pandemic, nothing else mattered but a secure & safe home. So we have seen a lot of traction in ready properties. People want to shift from their rental accommodation to their own homes. People also need ready to move in flats where they exactly know what they are buying. So to that extent pandemic has caused a pragmatic shift in demand to ready homes.
How much more time will it take for normalcy to return?
Hopefully, things will come to normalcy by June this year when the vaccine is expected for general public. But again there are talks of a new variant of the virus which apparently is much stronger and is affecting the younger population and even people with stronger immunity.
In Odisha which one is a bigger market: land or apartments?
Land comes with a lot of baggage. It’s not for everyone. Finding a clear and marketable title of a land is a Herculean task. For seasoned developers like us, who have a battery of lawyers for doing due diligence, sometimes we even find it difficult to get a clear land title. Apartments on the other hand are a safer real estate investment. From that perspective we feel apartments are a bigger market.
What is Utkal’s future plan for Odisha?
This year we are celebrating our 31st foundation year in Odisha and we have massive plans for the state of Odisha because we feel there is a big mismatch in the premium housing segment. I believe our Utkal Royal Residency in Kalpana Sq, till date is one of the most premium residential projects in the city. We have plans to build such premium residential projects with top notch finishes where the owners get a sense of pride in staying in an Utkal property. In the commercial segment, we believe in building asset classes – a build to lease model, which makes it imperative to build non fatigue properties to earn attractive sustainable rents over time. When one builds to own, you treat the asset like an investment, which enhances quality. Our Utkal Kanika Galleria in Kalpana Square & Utkal Centre Point in a small city like Jajpur is a testimonial to that.
What is your take on current real estate price?
The construction costs have gone up because of rise in steel & other raw material prices. The project costs have gone up significantly due to new GST norms & increased fee structure of statutory clearances. On top of that the inventory of ready flats has come down significantly, hence I see the prices coming up marginally in the times to come especially for the ready apartment projects. For the under construction projects, prices may be consistent for sometime but eventually will go up. With the growth in urban population & rising aspirations, there is no substitute to MoGhara.