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« Banks Compete to Attract Customers for Premium Category Home Loan | Home | London-based firm to Showcase Residential Project in India to British Investors »

Q2 Sees 15% Hike in Real Estate Demand

The real estate sector saw a growth in demand of 15% in the second quarter of financial year 2009-10, after slowing down to 10% during the first quarter of 2009-10. The rise has, of course, been helped by the base effect of a negative growth in the corresponding quarter of the previous year. This is still way off the 35% to 40% growth witnessed in January to March 2008 in metros. The figures are culled from a cross-sectional survey of the reports of chief real estate tracking firms.

Sanjay Dutt, chief executive officer, Jones Lang LaSalle Meghraj (JLLM), said the Indian commercial office market saw 10 mn sq ft of office space commitment pan-India in top major IT cities, including Mumbai and Delhi. “Of this, the bulk of the demand (almost 70%) came in the second quarter. The supply of commercial properties is all set to touch 55 million sq ft by December, with an expected demand for 25 million sq ft during the period. Moreover, front office space will generate huge demand in comparison with IT parks and SEZ.”

Anshuman Magazine, chairman and managing director, Cushman & Wakefield, too agreed that by the end of financial year 2009-10, a number of commercial projects that were pending for the past two years will be completed to take advantage of the rising demand. As for the residential market, a majority of developers were in a “wait-and-watch mode” in Q1 2009-10 and did not drop prices as required. In comparison, it was between January to March this year that prices dropped by 40% in the real estate market. Added to this was the government effort to reduce interest rates, apart from enough liquidity being infused by investors who were sitting on the fence to capture the price advantage. As a result, residential demand picked up close to 10% in Q1 2009-10.

Industry experts said currently 30% of the demand for residential space lies in the price bracket of Rs 5-15 lakh, 26% between Rs 15 and Rs 25 lakh, 22% in the bracket of Rs 25 and Rs 40 lakh, 12% in the range of Rs 35 and Rs 50 lakh, whereas a mere 6% is for properties priced above Rs 50 lakh. The residential sector growth comes at a time when HDFC witnessed 30% growth in its mortgage business, a confirmation that the residential mortgage business witnessed growth.

News Published Under:   Real Estate India | No Comments »

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