Senior executive at Lodha Developers Pvt Ltd
- Sales growth across affordable, mid-market and luxury home segments
- Supply fundamentals in Mumbai and Delhi NCR (National Capital Region)
- Performance across large-, medium- and small-sized developers
Reflecting on where we left off more than a year ago, pressure on home sales and housing finance growth in India has persisted over the past 1-2 years. What forces are currently shaping the outlook for property developers in India?
You mentioned it was a blessing in disguise that a lot of fresh launches were postponed due to coronavirus. To what extent is there a wall of potential new supply coming in over the next couple of months, given that everybody postponed at the same time?
You mentioned property sales volumes would have returned to pre-coronavirus levels in around October. You also mentioned that, comparatively, there were better realisations. Could you elaborate on that?
You mentioned that some of the trends we discussed relating to Mumbai weren’t yet trending in Delhi NCR. Could you elaborate on the sales trends there?
You spoke about Gurugram and Noida. What is happening in the satellite cities of Mumbai? How do demand and supply conditions shape up?
We’ve talked about the tier 1s. How would you characterise the conditions for tier 2 cities across India?
Are there any specific tier 2 city pockets where you see an accelerated recovery as with the tier 1s?
You mentioned the developers, specifically referring to the cat-A developers, have experienced decreased funding costs. How would you characterise bank or NBFC [nonbanking financial companies] financing appetite to residential developers?
You pointed towards the better realisations combined with essentially developer OPEX being reduced in the improved EBITDA margins. To what extent is that sustainable? If the market opens back up, people want to visit homes. Would the promotions and events come back in the first place? To what extent is the margin uplift temporary?
What about realisations? You mentioned developers were particularly aggressive in October, November and December 2020 and that sales will come off a bit as the stamp duty relaxations expire. Nonetheless, I know there’s some concern around bookings might have grown but that bookings-to-sales conversions have lagged. How should we think about sustainability of realisations or of sales growth over the next couple of months?
You mentioned there is currently limited supply, or more limited supply, in the ready-to-move and the near-term development completions. Where is the majority of pending supply concentrated in Mumbai? Is it constructions that are likely to be completed nine months from now?
Considering the supply picture, but then netting that off against the expiry of the stamp duty relaxations, how do you think about the price impact over the next couple of months? Is it likely that prices and realisations continue to grow, or do you think they will start to plateau vs where they are, that 5-8% higher than last year or pre-coronavirus, etc?
We talked about different types of cities and geographies. We didn’t talk about different classes, from affordable to mid-income to luxury or high end. Are there any broader trends you would point us towards on how sales are playing across those three segments?
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