Select Real Estate Locations will always be in Demand

May 5, 2008	(Be the first to rate this story!)  Loading ...
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Sentiments in the sector will continue to be muted, especially in the residential sector, which has seen the highest price appreciations and is the most sensitive to non-amenable lending norms.

Major real estate developers who are flush with private equity and IPO-based money, further bulwarked by pre-sale monies and land banks, will not be as seriously affected as smaller players. They will not offer substantially reduced rates as they have prolonged holding capacities.

Some smaller development concerns, which have projects under construction, will have difficulties in bringing these to completion. Some developers in certain areas may sell their products at lower rates, or choose to sell to speculative investors in bulk, at marginally discounted rates. Many buyers who were in a wait-and-watch mode may continue to postpone their intended property purchases. Residential developers will begin to look more seriously at incentives formats such as townships, while office space developers will consider the SEZ option. The extension of the STPI scheme by one year is not significant enough to make much of an impact.

India - and for that matter China - represent an economic scenario that has evolved separately and on very different parameters from the economies in most developed countries. It is an emerging Economy, with an emerging and maturing real estate market. There will be a fall, but it will not be of a magnitude comparable to that of other countries. Foreign investors are now justifiably awaiting greater transparency and stability.

Prospects for the sector
India continues to be a boom country, but the boom is now assuming the properties of a controlled and focused explosion, rather than the free-for-all market mayhem it previously stood for. Prices are stagnating and there may be a correction in many areas over the next one year. This, again, is not a blanket evaluation, and factors like specific location sector and property typology will play a significant role. Certain locations and properties will continue to be in great demand.

News Published Under:   Real Estate India, Real Estate Developers |

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