After a fairly dull end to 2013, how do you expect Indian property prices to perform in 2014?There is no doubt that the underlying forces for a very buoyant residential real estate market in India have been there for quite some time. Also, there is no doubt that both domestic and international investors have recently shown an immense interest in this sector.
When we take into account the size of our country, the ever growing population and the rapidly changing dynamics, there is no doubt that there are very different opinions with regard to the small to medium-term prospects for the Indian real estate sector. So, what factors do you need to take into account when looking at Indian property?
One of the most crucial factors has been investors switching to residential property.There is growing signal that despite the fact international investors and domestic investors, seemed to target commercial property at the beginning of the Indian real estate boom, residential property is now more in demand. There are quite a number of reasons for this increase in demand for residential property, many components of which are likely to continue for some time more to come.Ajnara India Ltd. one of the major realty players of Delhi/NCR has been developing several residential projects in the region. Mr. Ashok Gupta, CMD, Ajnara India Ltd. says, “The growth of demand for the residential property has increased manifolds over the last several years. Increasing population, diverse needs and investors from abroad have significantly taken the demand to the rise. We as a company have also moved our focus to residential development than commercial development due to current demand graph.”
Another major contributing factor has been the tightening of finance.While the Indian economy is expected to grow by 5% approx. towards the end of 2013/14 this is well down on the boom times of the recent years. Indeed the Reserve Bank of India has forecasted that inflation will end 2014 around 5.3% approx., which does seem fairly high, but is certainly a major improvement on the current level of 6.5% approx. As a result, financial institutions are now limiting ready finance for the real estate sector although interestingly this has opened up other options.Cosmic Group, one of the most trusted developers of NCR has been known for its project concepts have successfully launched several projects. Mr.SushantMuttreja, MD, Cosmic Group says, “Last year we saw a pretty stiff demand for real estate throughout the year. The decrease in purchasing power due to high inflation rate saw customers not willing to invest. Although experts feel the New Year will be a happy one for real estate sector as the demand forecast shows a commendable rise in residential property demand”.
Over the years, as we might expect in a boom real estate market, some of the developers overextend themselves on a financial basis and paid the price. Therefore, it is perhaps no surprise to learn that both international and domestic investors are now targeting partially completed developments which only require additional finance to get them over the finishing line. So, taking account of the lack of new developments and the relatively small number of partially finished developments this will likely help to maintain real estate prices in the short to medium term.
Growth of middle class may also be another contributing factor.The Indian and Chinese economies have performed tremendously well over the last five years or so, especially in light of the US mortgage crisis which impacted the worldwide economy in form of recession. There has been a slowdown in economic growth of late which has perhaps caused many economists to restraint in their optimistic forecasts from just a few months ago. However, the long-term dynamics for the Indian real estate market are still there, the growing population, an expanding economy, increasing foreign investment as well as a middle-class which continues to grow even during these challenging economic times.Ansal Housing, a developer which has been a benchmark for Indian Real Estate for decades has provided lakhs and lakhs of homes and offices have also witnessed the changing scenario of the sector. Mr.KushagrAnsal, Director, Ansal Housing says, “Indian Real estate has always been fragile due to the sentiments of people and being a developing economy. Last year we all saw the impact of diseconomy on this sector. Although, as the time will progress the new year might bring a positive graph of demand and most importantly; people to actually investing in property. We may also witness more of foreign investment than domestic or even people willing to invest more in commercial than residential”.
So, there is pent-up demand for long-term real estate property in India, the economy is starting to improve again and inflation is set to fall considerably which should all ensure a steady long-term progressive Indian real estate market. There may be ups and downs, there may be issues outside of the control of the Indian authorities but the dynamics required to expand the Indian residential real estate sector, as well as the commercial real estate sector, are positively in place.
Tag: cosmic group, Ajnara, Real Estate, Noida real estate, property in noida, property rate, commercial project, real estate investor, Real Estate developer, Indian real estate market, Ansal Housing
When we take into account the size of our country, the ever growing population and the rapidly changing dynamics, there is no doubt that there are very different opinions with regard to the small to medium-term prospects for the Indian real estate sector. So, what factors do you need to take into account when looking at Indian property?
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| Growth of Indian real estate |
Another major contributing factor has been the tightening of finance.While the Indian economy is expected to grow by 5% approx. towards the end of 2013/14 this is well down on the boom times of the recent years. Indeed the Reserve Bank of India has forecasted that inflation will end 2014 around 5.3% approx., which does seem fairly high, but is certainly a major improvement on the current level of 6.5% approx. As a result, financial institutions are now limiting ready finance for the real estate sector although interestingly this has opened up other options.Cosmic Group, one of the most trusted developers of NCR has been known for its project concepts have successfully launched several projects. Mr.SushantMuttreja, MD, Cosmic Group says, “Last year we saw a pretty stiff demand for real estate throughout the year. The decrease in purchasing power due to high inflation rate saw customers not willing to invest. Although experts feel the New Year will be a happy one for real estate sector as the demand forecast shows a commendable rise in residential property demand”.
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| commercial project in noida |
Over the years, as we might expect in a boom real estate market, some of the developers overextend themselves on a financial basis and paid the price. Therefore, it is perhaps no surprise to learn that both international and domestic investors are now targeting partially completed developments which only require additional finance to get them over the finishing line. So, taking account of the lack of new developments and the relatively small number of partially finished developments this will likely help to maintain real estate prices in the short to medium term.
Growth of middle class may also be another contributing factor.The Indian and Chinese economies have performed tremendously well over the last five years or so, especially in light of the US mortgage crisis which impacted the worldwide economy in form of recession. There has been a slowdown in economic growth of late which has perhaps caused many economists to restraint in their optimistic forecasts from just a few months ago. However, the long-term dynamics for the Indian real estate market are still there, the growing population, an expanding economy, increasing foreign investment as well as a middle-class which continues to grow even during these challenging economic times.Ansal Housing, a developer which has been a benchmark for Indian Real Estate for decades has provided lakhs and lakhs of homes and offices have also witnessed the changing scenario of the sector. Mr.KushagrAnsal, Director, Ansal Housing says, “Indian Real estate has always been fragile due to the sentiments of people and being a developing economy. Last year we all saw the impact of diseconomy on this sector. Although, as the time will progress the new year might bring a positive graph of demand and most importantly; people to actually investing in property. We may also witness more of foreign investment than domestic or even people willing to invest more in commercial than residential”.
So, there is pent-up demand for long-term real estate property in India, the economy is starting to improve again and inflation is set to fall considerably which should all ensure a steady long-term progressive Indian real estate market. There may be ups and downs, there may be issues outside of the control of the Indian authorities but the dynamics required to expand the Indian residential real estate sector, as well as the commercial real estate sector, are positively in place.
Tag: cosmic group, Ajnara, Real Estate, Noida real estate, property in noida, property rate, commercial project, real estate investor, Real Estate developer, Indian real estate market, Ansal Housing
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the commercial real estate portal is expected to boom more this year as compared to the residential one. this is because the supply of residential flats is more and demand is less while its the reverse for commercial one.
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