Bengaluru, May 25, 2016: As per a report by JLL, the hard times are over for India’s real estate sector, and residential rates are anticipated to be recover soon.
India’s residential sector has floundered in the past few years as demand has been restrained.
“Trends are beginning to change on expectations of a good monsoon, revival in the economy, reducing inflation and the fact that residential prices have bottomed out,” Ashwinder Raj Singh, the chief executive of residential services at JLL India said.
“Also, the improving regulatory environment in the real estate sector, coupled with progressive government schemes such as smart cities, the mission for rejuvenation and urban transformation and housing for all by 2022, are beginning to have a positive influence.
“Additionally, factoring in banks’ passing on of interest rate cut benefits to the ultimate consumers, the residential sector, is all set for rebooted growth.”
He further added that the “most convincing signs of revival” in the realty market will appear by the final quarter of this year or the first quarter of the forthcoming year. Fiscal growth in India has elevated, and India has become the world’s fast-growing economy. Since the interest rates have also declined, home loans are sure to become more economical. These factors look favorable for the realty sector, JLL opined.
He also believes that after two successive years of unsteady monsoon, this season is anticipated to be better, thus improving the performance of agriculture. This could help stimulate the demand for realty from the economy.
Other specialists concede that the environment has reformed.
“India is a bright spot currently, plus the size of the population, plus the NarendraModi-led BJP government, which is coming out with a lot of initiatives and reforms in the real estate sector, coupled with the fact that a lot of our macroeconomic indicators are in control,” said Rubi Arya, the executive vice chairman of Milestone Capital Advisors, a private equity firm based in Mumbai that has its focus on property.
“The latest budget we had laid a lot of emphasis on infrastructure and real estate. Every Indian wants to own their first home. New launches have been low, and I think the supply will get used, and people will buy homes, so the long-term prospects are good.”
JLL emphasized that the realty sector “saw the worst phase” in the financial year that ran from April 2015 to March 2016 when sales and prices dropped down.
“High inventory levels, diminished demand, and limited liquidity impacted new launches, as well,” said Mr. Singh. Home sales plummeted in the last financial year, with 158,211 units sold as compared to 161,875 the last year, a report from JLL showed. But sales hiked in the beginning quarter of this calendar year to 42,521 units from 39,001 units in the same time a year earlier.
“Where prices are concerned, there was stagnation or at best a modest rise by the end of the financial year 2015-16,” said Mr. Singh. “Going forward, prices are expected to rise modestly.”
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A long-anticipated real estate regulatory act was given consent by India’s president that is crafted to preserve the interest of home buyers and will create a real estate regulatory authority. This is foreseen to encourage demand for homes, said JLL.
Corporate Comm India (CCI Newswire)
