Developers expecting high sector growth

September 19, 2008	(Be the first to rate this story!)  Loading ...
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A report by Ernst & Young suggests that real estate developers expect the sector to grow. The report is based on a survey conducted across six prominent cities, comprising NCR, Mumbai, Pune, Hyderabad, Chennai, Kolkata and Bangalore. The survey highlights a vast section of respondents who demonstrated their keenness in foraying into affordable housing, subject to certain enabling factors like government support, basic infrastructure support and low cost of land.

Almost 35% of developers define capital value of affordable housing in the range of INR 1-1.5 million, followed by another 35% developers defining value in the range of INR1.5-2.5 million. 70% respondents indicated an inclination to expand beyond the ‘obvious eight’ cities (Delhi, Mumbai, Chennai, Hyderabad, Bangalore, Kolkata, Pune and Ahmedabad). The report, released at FICCI’s International Real Estate Summit in Mumbai on September 10, 2008, underlines survey respondents’ belief that genuine end-users have ‘taken over’ from the investors and account for 80-90% of sales in their current projects.

Respondents expressed mixed reactions with regards to land valuations. Most of them seem to be reaching a consensus that land values are likely to see stability over the short to mid-term and may not witness any appreciation over next 12 months. In fact, in some of the cities, further price correction is expected due the changing economics. The present asset class focus for developers continues to be residential as stated by 70%-80% respondents, followed by commercial and retail.

News Published Under:   Real Estate Developers |

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