Indian Real Estate - The only way is UP Its been over five months that the new BJP led government has taken charge at the Centre. With impressive pro-business policy announcements and a good budget, the government has tried to instill a positive sentiment in the country. A stable government in Delhi has also fuelled positivity in the business sector even as it found flavour with the international business community. The real estate sector is not too far behind. The Prime Minister Narendra Modi, in his Independence Day speech, mentioned that he would strive to get FDI in the real estate sector. No wonder that the PM understands what ails the sector which feeds allied sectors like steel, cement, iron etc. This sector is the largest employer in India though it remains to get Industry status. Importantly, it addresses one of the basic needs of mankind, a home. Allowing FDI in the real estate sector will help speed up pending projects as also will bring about a healthy ecosystem for acquiring lands and completing large scale infra projects on time. This is the need of the hour. While most players in the sector are reeling under severe cash crunch, the market seems to have become more sensitive to the customers needs. Today it is the actual user and not the investor / speculator who are buying properties. With a boosting economy, more and more Indians are becoming millionaires every year. This new breed has opened up a new set of customers for the sector which is bracing itself to meet their tastes and expectations. Few years ago we saw an upsurge in the demand of low cost or affordable housing while today if we analyze the trends it is the high end apartments and luxury homes which are in demand. Now look at the most happening markets in real estate. Mumbai, the financial capital of the country and Gurgaon, an emerging technology hub in the North of India. Both these places are seeing huge demand for homes across segments. While Mumbai remains to be the dream city for property buyers, the present rates at which properties are sold have raised a caution and repelled decision making for many. Gurgaon, on the other hand, is witnessing a steady growth...a good sign for a twin city. However, the one location that has maintained steady growth when it comes to demand and supply is Bengaluru. The Silicon Valley of India has been home to migrants from all over the country, interestingly even from places like Mumbai, New Delhi and Pune. This is driven largely due to the IT sector here, the most vibrant entrepreneur ecosystem (home to most start ups!) Coupled with awesome weather, an efficient public transport with good connectivity and cosmopolitan culture has made heads turn for Bengaluru. These factors fuel Bangalore real estate’s growth despite some other markets witnessing a slump. A very important trend, which I feel will stay for a long time, is the emergence of luxury homes as the prime puller for the high net worth individuals and NRIs who wish to settle down here after packing up from the US, UK or the Middle East. Interestingly, there is a large chunk of NRIs who are making a beeline to buy luxury homes which can cost anywhere between Rs. 2 Crore to 20 Crore. With more and more millionaires being made in Bengaluru, it is not surprising that the demand for upscale homes is growing. I may not be able to have last-minute data to validate but can safely say that Bengaluru remains the most preferred location for people to purchase and consume property while Mumbai for its vibrant resale market where people invest to get higher returns when they sell after using it for some years. Other important happening is the emergence of smaller towns in mainstream real estate development. Places like Mysore, Coimbatore, Bhopal, Indore, Bhiwadi in Rajasthan, Nashik and Kolhapur (Maharashtra) are now witnessing new construction activity. This is a very healthy sign since the load on city infrastructure is lessened due to people preferring small towns as well. Civic development authorities are also playing a very important role in providing these cities with good infrastructure a must-have for a good living. All these are signs of growth. With the PM re-affirming his vision to give the necessary fillip to the real estate sector, it is not too far away that we would get to see a better and vibrant real estate ecosystem in India. One important point I would like to make here is that the Centre must consider a uniform code of conduct for the real estate sector in India. Presently, every state has its own rules for real estate and is archaic in nature. With one single code, the delays in clearance of properties, registration, payment of stamp duty etc would pick speed and bring in more transparency in the business. This would also do away with malpractices which directly have an impact on the property buyer. We look forward to a more brighter era for the real estate sector which would address the housing needs of the discerning Indian diaspora
Posted on: Fri, 21 Nov 2014 07:32:52 +0000
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