Across the built environment of the Indian real estate the two question that are on everyone’s lips is about the recovery timelines and segment to recover first. Track2Realty finds this uncertainty about the possible recovery, or rather the lack of it, has also kept the fence sitting home buyers on the edge.
The changes in the land laws in Jammu & Kashmir has mostly been debated from the political standpoint. However, it has a direct linkage with the way the property market would shape up in a tourist destination that has thus far been seen as a hostile destination. The moot point today is whether the changed land laws would lead to any tangible difference in the property market over there. Will the developers actually flock to land scouting in this part of the world?
It was expected to be a future ready budget and the overtones in the power corridors were also self-congratulatory in advance. It finally turned out to be pretty ordinary budget for the real estate sector. The stakeholders are nevertheless looking for the silver lining here and there. The most critical stakeholder, the home buyer, is pretty disappointed with the Union Budget 2021-22.
In the financial sector, housing finance is relatively a new concept as the government took interest in the last two decades to diminish the housing problem in India. However, the participation of banks and financial institutions in the housing credit sector has swelled and the sector itself has evolved over the years, fuelled also by the concurrent evolution in government regulations in the sector and real estate industry as a whole.
While the COVID-19 has by and large dented the confidence level of the real estate developers, Aditya Kushwaha, CEO & Director of Axis Ecorp believes there are silver lining for the players who are forward looking in their approach. In an exclusive interview with Track2Realty, Kushwaha asserts that the Work From Home trend would shift the focus from top metro cities to open spaces in and around the tourist destinations. He therefore urges the government to look at the Holiday Home segment as a priority sector.
For the real estate, it seems the government message is that if you wish to revive than learn to survive on your own. Unfortunately, in a market loaded with housing inventory, added with the liquidity crunch, the over-supply could only be absorbed with the revival in demand. There has been no announcement as to how the government would ease the stuck up projects after its initial stressed funds.
According to the World Bank, India ranks at 63rd among 190 countries, and the ranking is anticipated to improve further in the coming years backed by progressive government policies. Meanwhile, the real estate sector has shown remarkable resilience despite the bearish phase of the economy. Below is a lowdown of how the real estate story unfolded in 2019:
CapitaLand’s developments underway in India include 17.9 million sq ft of business park space in Bangalore, Chennai, Gurgaon, Hyderabad and Pune when completed. Another 7.2 million sq ft through forward purchases have been signed up and are under construction. This includes IT parks in Mumbai and Hyderabad, a seventh warehouse at Arshiya Free Trade Warehousing Zone, Panvel, near Navi Mumbai, and BlueRidge 3, an IT/ITES Special Economic Zone development in Hinjewadi Phase 1 in Pune. CapitaLand is also building up a logistics asset portfolio in India with 4.3 million sq ft planned for development.
Bengaluru maintains the top position in office space leasing, with a share of 30% in gross leasing during Jan-September 2019. Bengaluru recorded gross absorption of 12.1 million sq feet during Jan-September 2019, a 7% increase from same period last year, as occupiers continue to ramp up. IT-BPM and technology companies together accounted for 36%. Engineering and manufacturing sector’s leasing accounted for 18% share. Occupiers are preleasing space, and even taking up space in refurbished grade B buildings, due to tight vacancies in the market amidst healthy demand. The city’s vacancy stood at 8.8% at the end of Q3 2019.
Even as India’s middle-class grapples with the prospect of an uncertain future in their careers and financial ability – the main drivers of housing demand – the rise of India’s super-rich continues unabated. According to Credit Suisse report, there were an estimated 3.42 lakh dollar-millionaires in India as on mid-2018 who collectively held around USD 6 trillion. It is forecast that 5.26 lakh Indian dollar millionaires’ wealth will be around USD 8.8 trillion by 2023. Market fluctuations make very little difference to the personal networth of these individuals.