RACHNA LAL
suvA
The importance of the real estate industry cannot be ignored in any country. It is indeed an important part of any economy.
After all, the world got a reality check when the decline in home prices brought about the 2008 global financial crisis.
With elections just a few weeks away in our own country, whilst we listen to the politicians and the people, it is also important to understand what the business community feel, have to say and what their expectations are.
This week we decided to interview a growing real estate agent, Praneel Dass, the managing director of Inglewood Realtors.
Mr Dass started the company in 2007 in Lautoka which back then, he said was not an easy task as many people were not fully aware of the role of real estate agents.
“The survival chances of Real Estate Company in the Sugar City were very less but then I trusted myself by believing that through hard work and honesty goals are achievable,” he said.
Today, he has grown in the West and has now starting entering the real estate industry in the Central Division.
Mr Dass said he is quite comfortable with the current size and outlook of his business.
But he does feel drastic change to the current policies will harm any business.
“So it really isn’t a matter of specific policies but the potential changes that are proposed,” he said.
What sort of policies are you looking at post elections?
I wish to approach this question from two different angles.
As a consumer – and from a consumer perspective – I am looking at bread and butter policy of cost of living. Be it removal of VAT, import substitution or export stimulation, I wish to see a general reduction in cost of living and basic food items.
I feel this issue touches on each individual and families. I feel the cost of living is not commensurate and seriously disproportionate to the prevail wage rates.
Therefore the natural carry on from this policy would be a look into the minimum wage across the labour divide and an upward review of industry specific wage rates.
As a businessman and realtor, I feel the prevailing policies for foreign and local investors are quite friendly. For foreign investors the regulatory requirements stemming from Investment Fiji approvals, Fiji Revenue and Customs Authority approvals and registration and Reserve Bank protocols are quite prompt and facilitative. I commend the current administration for strengthening the processes.
Having said this I must say that niggling issues remain a hurdle in land conveyance with a case on point being the approval process at Director of Lands office.
The Director of Lands office plays a pivotal role in the whole equation because foreigners usually invest in land totaling more than an acre therefore coming within the purview of the Directors jurisdiction.
I say this with constructive intent as State leases and land more than an acre are quite difficult to market and sell because of the incredible delay and red tape surrounding the approval processes.
For foreign and locals alike this is a cause of concern and dissimulating towards investor confidence as there is quite a lot of money involved in these transactions.
How important are consistencies in Government policies?
Consistency and a degree of predictability are vital in personal and business life.
Let’s take an example the current policy regarding investment in the North is tax exempt – the full details of the exemption being relaxed for this example.
If I were to invest in the North, I would do so with an understanding of the competitive advantage the tax policies provides and expect it to remain for a number of years.
This would enable me to recoup the initial injection of capital into the project and enjoy the fruits of my investment.
The whole contextual picture being the injection of capital in the North, the creation of employment, the incidental growth in commercial activity as a result of my investment and wealth creation all falling within the ambit and intent of the policy. If there is a drastic change in the tax policy and it is scrapped then my investment is rendered nugatory because the reason for the investment was the tax incentive.
This would result in a total collapse in investment and the spirit the policy intended to implement in the first place.
The same speaks true for policies such as change in retirement age. Individuals usually do financial or educational planning for their children keeping in mind their retirement age and earning ability.
So if the income stream disappears overnight due to a sudden change in retirement policies the domino effect is the adverse effect on an individual’s investments and ability to educate his/her child. It is said the best laid plans of mice and men often go astray but when the plans depend on one’s State policies the plans are salvageable and within control from disastrous results.
Therefore, I believe consistency is the all-important constant when it comes to implementation of policies.
How investor-friendly are current policies?
I will speak from a realtor’s perspective and focus my response to my field of expertise. I must also say that State’s laissez-faire approach to the real estate industry must be commended. The regulatory framework governing our industry is quite friendly and facilitative.
Current foreign investment policies are also very investor-friendly and stimulating.
In the same breath I must say these policies must be backed with service delivery and a degree of qualified advisory personnel at relevant junctures who deal with investors.
This is lacking and I will refrain from using a case example but the policies are usually frustrated by the administrative dis-functionality or laxity.
I am quite satisfied with the prevailing policies in my field of business.
What impact will drastic changes in current policies have in the business climate?
This depends on the drastic changes. I believe my comments on consistencies in policies answers this question quite adequately however certain needy areas deserving of drastic changes would be an exception to my comments above.
What impact did the 2009 devaluation have on your business?
My business is in a facilitative field where I arrange the marriage of vendors and purchasers.
A reduction in the purchasing power of the dollar affected one side of the equation and created a market where there could not be consensus on the price of properties.
This resulted in a downward spiral in the real estate prices with an unable pool of purchasers.
The net result was a general slowdown in business but since 2009 the resilience of our people and economy has shown through once again and I believe the market is quite healthy at present.
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