Realty looks up to budget to regain lost ground
The realty industry is sincerely hoping that 'Team Narendra Modi' addresses concerns regarding ease of doing business
Feb 20, 2015
Source : The Times of India

 

HYDERABAD: The verdict is unanimous. The NDA government's first full budget, to be presented next week, will either make or break the future of India's real estate sector that's been struggling to get back on its feet for over a year now, feel market experts. 

"India has a lot of potential. Its IT/BPO sector is a matter of envy for the rest of the world. We are really hoping that the forthcoming budget encourages investors to come to India in large numbers," said Alastair Hughes, chief executive officer (Asia-Pacific) of Jones Lang LaSalle (JLL) Property Consultants Pte Ltd. Hughes was in the city for a session on 'Catching India's Economic Upswing', organized by JLL. 

Among other things, the realty industry is sincerely hoping that 'Team Narendra Modi' addresses concerns regarding ease of doing business (as highlighted by HDFC's Deepak Parekh), lack of transparency and need for more sectors for Foreign Direct Investment (FDI). 

"We are hopeful that the government will continue with its current approach and touch upon these points in the budget. If that happens, the sector will start looking up in the next 9 to 12 months," said Anuj Puri, chairman and country head of JLL. 

Stressing the need and importance of real estate investment trusts (REITs), the two said that it would not just bring more liquidity in to the market but also attract a larger number of retail investments. "At present, there are assets worth $10 billion that can be used for this," Puri added. 

While admitting that the absorption of commercial/officer space is currently not translating into residential sales - as is the norm usually - Puri expressed hope of the situation changing soon. "There are three factors that are hampering the growth of the residential sector: very high mortgage rates, high price of homes (when compared to the salary growth of buyers) and over supply of units. Once increments/bonuses come through, this market might pick up again," the country head claimed. 

Puri's sentiments were seconded by Hughes who insisted that the Indian market that had lost its sheen post the global economic slowdown followed by the political uncertainty at the national level, is now on way to recovery. "Post the 2014 elections, western companies are looking at India seriously again. That is a good sign," Hughes maintained. 

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