Anshul Jain, CEO, DTZ India
Residential Segment: Continued slowdown in demand
High property prices coupled with continued increase in home loan interest rates over the last six months and inflationary pressures will keep transaction activities restrained. With growing perception that realty values are likely to witness correction, most end users as well as investors will continue to trend with “wait and watch” policy.
Subdued demand will also restrain new project launches. A lackluster festive season of Dussherra and Diwali, which are considered as an auspicious time to buy real estate, could lead to some correction in capital values over the next 3-4 months. However, considering increasing cost of funds and project development cost, the quantum of correction will not be very significant. Mumbai and Delhi NCR will continue to drive demand for residential space amongst the top 7 cities.
Outlook:
While the prevailing economic environment has put forward several challenges, a decent 7%-8% projected growth of Indian economy will ensure reasonable activity levels for Indian real estate sector. Valuable insights acquired during the years of global economic slowdown will help companies reinvent and realign their corporate strategies to encash opportunities provided by the vast domestic consumption market. As a result, though delayed, most companies will execute their growth plans over the next 6 to 12 months. This will create enough opportunities for real estate sector across markets and fuel the long term growth potential of the industry.
