By: Vineeta Tiwari
Track2Realty Exclusive: FICCI has recently released Real Estate Sentiment Index for Q3-2014. The report is also supported by sensitive data being put forth by one of the world’s leading independent real estate consultancy, Knight Frank. The index or a very formal survey conducted by the joint efforts of these two independent organizations revealed a lot about Indian realty market.
The report has detailed the present scenario prevailing in the residential as well as commercial markets in India.
Before unveiling the key findings of FICCI-Knight Frank report, let us analyze the significance of Indian realty market for the overall economic health
Indian realty domain: A peep through the industry
The realty domain India is very unpredictable and is affected even by the slightest of economic highs or lows. There have been quite a few reforms that has pumped some life in otherwise dilapidated property arena spanning across India. Some of these reforms include plans to ease up the FDI norms and encouraging the concept of affordable housing options.
The domain deserves exactly the same attention not because people are getting homes and companies getting business spaces. The reason is somewhat up and above all this.
The industry is a source of employment for about 76 lakh people and is responsible for almost 6% of the country’s GDP. Not only this, Indian realty domain feeds industries like cement, steel, paints, chemicals, tiles, and fixtures and fittings. The overall economy of the country is dependent on the development of the cities and their respective real estate markets.
Now what FICCI has to say!
The FICCI Report is formulated every quarter of a given year and it is based upon the tapped feedback of various stakeholders that include developers, private equity fund and financial as well as non-bank financial companies (NBFCs). This quarter’s survey has nothing excited to offer for the buyers. Here are some of the key findings:
- The prestigious Union Budget 2014-15 has infused quite a lot of positivity in the Indian realty market. This is the main reason behind the upward run in the Q3-2014 and an increased interest in FDI norms and affordable housing
- Home Starts/New Launches and Home Sales have been affected to a good extent. Moreover, the residential price appreciation has not lost its sheen yet. The rates have been good enough ever since the last quarter of 2013
Here is an illustration:
Source: FICCI-Knight Frank Report
The graph clearly indicates the findings that have been mentioned in the points above. However, the major talk at this moment is that what a common man needs to get out of it? Here’s how:
What common man needs to know?
There are many aspects related to this report, which can affect the common man in many ways. Now, if there is a planned investment ready to be made in any of the metropolitan cities, a toned down version of the report may help the buyers to a great extent. However, the office market is still stagnant with not much ripples.
Here’s how:
- 1. Cities topping the buyers’ wish list
A buyer, without any fear, can invest in buying residential asset in Bangalore, Chennai and Hyderabad as realtors are planning on to go for more and more new property launches. Bangalore is the ultimate IT destination in India and thus experiences a high migration rate with people coming here for jobs and living. Thereby, housing options here in Bangalore are more in number and builders are thinking about stationing even more. The case is same for both Chennai and Hyderabad.
- 2. No new projects in some place
The FICCI report clearly indicates that there are parts in India, such as Delhi/NCR and Mumbai, where regular investments have not been considered so far. The respective state governments are anticipating new reforms and policies that may improve the situation.
The builders are therefore concentrating on incomplete residential spaces that have piled up rather than focusing on stationing new ones. Buyers who are thinking about investing should either go for already launched residential spaces or wait for 2-3 months for new launches.
The verdict
The report is data centric and corresponds to high profile stake holders. However, one can’t ignore the fact that the same when toned down, is highly beneficial for the common man as well. Many of the investment related concerns are pacified now using the data available here. FICCI report is worth mentioning and understanding.
