Expert Advice: Sunil Mantri on Why The Best Time To Buy Property Is Always 'Now'

Sunil Mantri, Chairman of Mantri Realty, does not believe that large unsold inventory, which has been making news for a while now, will significantly affect real estate developers. In a tête-à-tête with Katya Naidu, he insists that large inventory will not push for price cuts; instead, the real estate prices will remain stable. As a developer of commercial, residential and SEZ properties, he believes that the demand will only rise, going forward.

PropGuide: Does the figure of seven lakh unsold homes in India put pressure on developers? Sunil Mantri: I think large unsold inventory is largely a publicized media perception. There is a very limited stock of ready-to-move-in properties in India in unsold inventory. In fact, most of them are under-construction projects, which are counted in the inventory numbers too. It is a well-established fact that it takes three to seven years for a project to be completed, given the delays and other factors. In the meantime, most of the inventory gets sold.

PropGuide: How much of the total unsold inventory do you think is in the ready-to-move-in category? Sunil Mantri: Only a quarter of total unsold inventory is ready-to-move-in. That number being not very large is in fact the standard rate of inventory that exists in the market. Based on my market reading, only around 10-15 per cent of the unsold inventory is under lock and key. Moreover, the ready-to-move-in inventory is the lowest among premium and mid-segment projects.

PropGuide: Mumbai ranks highest among cities with large unsold inventory. Why is it so? Sunil Mantri: Mumbai has the largest number of high-rise buildings and skyscrapers. These have longer construction timelines; hence, the inventory rises. 

PropGuide: Many home buyers are waiting for prices to drop. Even the RBI governor wants developers to lower prices. What is your take on that? Sunil Mantri: There are many home buyers sitting on the fence. It is a matter of perception, which is similar to when buying gold. The truth is, no one can define the peak and bottom of the prices in a real estate market, not even developers. The best time to buy a property is always 'now'.

PropGuide: A report by PropTiger Data Labs forecasts that the property prices will remain stable. Do you agree with it or do you think there will be any price reductions? Sunil Mantri: I agree with the findings. Property prices will not come down drastically, though there might be discounts on a case-to-case basis. If at all the prices drop, it will be a mere 5-10 per cent drop. Moreover, there have been a few green shoots in the economy and a slight increase in uptake of commercial property. This, we expect, will lead to better uptake of residential property.

PropGuide: How will the growth in uptake of commercial property drive the growth in uptake of residential property?Sunil Mantri: Latest reports say that the uptake of commercial property is picking up. This will translate into increased demand for residential property in India and will grow ten folds than that of the commercial property. This is purely based on a calculation of office space occupied by a person and the living space that he or she requires.

PropGuide: What are the green shoots in the economy that will enhance the real estate sentiment?Sunil Mantri: There have been a few developments, which will contribute to rise in home buying. With the Indian GDP growing, job creation will accelerate in the country, which will further spur real estate demand. Earlier, the GDP was stagnant at around five per cent while now, it is growing at a rate of eight per cent and is likely to touch the mark of 10 per cent in future. There have been plenty of job creation announcements too. For instance, the investment by Apple phone maker Foxconn in India has the potential to create as many as 50,000 jobs in the country. And, a trend that we have observed among young people is to invest in property in India as soon as they get a job. Nowadays, even banks are willing to fund the young home investors.

PropGuide: Do you believe that demand will improve going forward? Sunil Mantri: Yes, though the real estate market has been sluggish for a while now, the scenario will soon change. Slowly, the negativity will go and in next six months, the real estate market will stabilise. The demand, we expect, will be the highest from mid-segment home buyers.