Realty demand to grow post elections: Colliers
Mar 28, 2014
Source : The Times of India

 

DELHI: Colliers International, the leading real estate services company, has released its India Residential Overview and Forecast Report.

Due to the pessimistic economic outlook, sales volumes have come down by 15 per cent to 40 per cent in cities like Gurgaon, Mumbai and Delhi. In the primary market, developers in 2013 did not reduce the base selling price, but many were willing to negotiate and offered various incentives. New launches were also down in Mumbai and Delhi by 38 per cent and 28 per cent respectively.

Bangalore bucked the trend and more units were launched in the city in 2013 as compared to 2012. However, the new launches have dried up in the 4th quarter. In the secondary market, a substantial discount was available and prices were well below that of the primary market.

Investors shied away from the market, as they found it difficult to flip units and do not foresee significant capital appreciation in the realty sector in the short term.

Projects that were close to completion witnessed robust demand from end users (especially in Gurgaon and Noida).

Pan-India Highlights

According to Colliers International latest residential report, demand for residential units in both the primary and secondary markets remained subdued. Pressures of increasing unsold inventory and a liquidity crunch resulted in fewer project launches. There was an increase in the incentives being offered to sell property, such as easy payment plans, discounts and free gifts with bookings. Mumbai, Delhi, Gurgaon and Noida registered stable capital values throughout the fourth quarter of 2013. Select micro markets in cities like Bengaluru, Chennai and Kolkata witnessed increase in capital rates in the range of 3-9 per cent.

Residential market like Bangalore and Noida which are primarily driven by end-user, saw marginal increase in end-user and investor activity with many new projects in the pipeline offering various attractive offers and other promotional schemes to lure buyer interest.  .

Pressures on rents in cities like Mumbai and NCR continued with the officials of multinational corporations and expatriates that are currently trying to optimize their costs negotiating on rental values. However, asking rentals have not changed much from previous quarter.

Various positive amendments at policy level are announced in various states like state government has increased the ready reckoner rates for residential and commercial properties by up to 20 per cent in 26 posh zones of Mumbai. The increase in rates wills impacts micro-markets like Worli, Napeansea Road, Altamount Road and Carter Road. In NOIDA and Gurgaon, in order to boost residential real estate activities, the state government has decided to allow mixed land use in commercial zones notified in the master plan.

2014 Prognosis: The overall economy growth is expected to rebound in the second half of 2013-2014 with core inflation trending down and other factors such as expected good agriculture growth, and a likely increase in export figures due to rupee’s depreciation. With economic recovery in place, real estate demand is likely to boost post general election due in the spring of 2014 as the political uncertainty will decline significantly. It is anticipated that the annual transaction volumes in 2014 will be similar to 2013, albeit the second half of the year is expected to be stronger than the first half, as market activity after the general elections is expected to be better than now until then. Development completions will continue to be below average as developers shall refrain from adding more supply until the overall market improves. Most of the cities are expecting the completion of various projects that were launched during 2009 to 2010 and which have already been delayed one or two year. This additional supply will keep capital and rental values stable across all micro markets

Says Amit Oberoi, national director, Valuation & Advisory Services and Research “The Indian real estate markets are primarily sentiment driven, and the perception due to the adverse economic climate is that the residential sector will witness lower demand until at least the national elections. We believe that for those looking at a longer-term investment, this is a good time to buy a property. Property today is available at good discounts, and with prospects of a stable government the demand is likely to rebound. In the secondary market, a substantial discount was available and prices were well below that of the primary market. This is primarily because investors shied away from the market, as they found it difficult to flip units and do not foresee significant capital appreciation in the realty sector in the short term. On the other hand, projects which were close to completion witnessed robust demand from end users (especially in Gurgaon and Noida).”

Latest Realty News

Unitech signs Rs 1,100-cr leasing deal with Aricent, Fidelity
Mar 28, 2014
DELHI: Realty major Unitech has leased about one million sq ft office space in its under-construction SEZ at Gurgaon to Aricent and Fidelity in a deal that would give about Rs 1,100 crore rental income over 15 years
Congress, BJP candidates under-valuing their assets, says Yogendra Yadav
Mar 27, 2014
DELHI: Aam Aadmi Party's Yogendra Yadav on Tuesday accused rival candidates from Congress and BJP of under-valuing their property to an extent that negated the Election Commission rules and Supreme Court judgment mandated to ensure transparency in polls.
Sahara India Real Estate Corporation Limited,Sahara Housing Investment Corporation Limited
Mar 27, 2014
DELHI: The Supreme Court Wednesday asked Sahara Group chief Subrata Roy to deposit Rs.10,000 crore with the market regulator SEBI for his release on interim bail from judicial custody.
Real estate, construction sectors hit, as companies divert funds to poll contribution
Mar 27, 2014
DELHI: As India's mammoth general election approaches, jackhammer drills are quietening down at construction sites and earthmovers and cranes remain parked.
Solve water woes of NCR to boost realty sector
Mar 27, 2014
DELHI: As summer sets in, the hapless people of the capital and the NCR will once again face water shortages and the tanker mafia. As is the norm, there will be heated debates on the crisis, but nothing concrete ever happens on the ground.
SC to take up Sahara repayment proposal today
Mar 26, 2014
DELHI: Sahara India Real Estate Corporation and Sahara Housing Investment Corporation, the two Sahara group companies under pressure from the Supreme Court to return money to millions of investors, on Tuesday offered another schedule for the repayment. The Supreme Court will take up the new proposal on Wednesday afternoon.
Realty development in Dharuhera
Mar 26, 2014
DELHI: Dharuhera is the fastest growing industrial town on the outskirts of Delhi. One report says that in terms of demography, Dharuhera is the fastest growing town of Haryana, and that it is also the new growth corridor of Gurgaon and New Delhi.
Supreme Infrastructure gets Rs 618-crore construction orders
Mar 25, 2014
DELHI: Supreme InfrastructureBSE -1.82 % has secured three orders cumulatively worth Rs 617.7 crore for various construction works, the company said today.
Too many houses,too little money
Mar 25, 2014
DELHI: For over a decade before the crisis actually hit, especially between 2002 and 2004, a lot of investors from around the world were parking their money with banks in the U.S. for very low interest rates. Money was so widely available, and so cheap, that banks started lending them to individuals as home loans (housing mortgages). Since banks didn’t know what to do with all the spare cash lying around, in many cases, they lent this money to people who wouldn’t be able to pay back.
Bhiwadi: Best bet for middle class
Mar 25, 2014
DELHI: Bhiwadi is one of the fastest growing destinations with manifold developments taking place in the residential, commercial, and industrial sectors here. The big advantage of Bhiwadi — for that matter places on or near NH-8 — is the ease of connectivity. The place has attracted a lot of industrial activity and provided scope for a boom in the real estate.

Latest Realty News Of State

Realty Talk's