In Bangalore, the cap rates for the logistics & warehousing assets continue to remain flat Q-o-Q with significant volume registered in lease transactions. Similarly, rental rates and capital values for Grade A commercial office segment have been flat with no significant change. Though interest rate regime is stable, the impact on the cap rate movement is limited due to transaction volumes and perceived risk not changing much.
Between April and June 2024, residential supply witnessed the highest growth rate in the last 24 months, driven by the increasing availability of under-construction properties, shared the recently published PropIndex Report (April-June 2024) by Magicbricks, India’s leading real estate platform. According to the report, the supply of under-construction properties has increased by 11.7% QoQ, while prices have risen by 15.2% QoQ between April-June 2024. This surge has resulted in prices of under-construction properties surpassing those of ready-to-move properties in several cities such as Gurugram, Mumbai, Noida and Thane.
A comprehensive analysis of these cities was done involving assessment of various social, economic, financial, and real estate specific demand & supply side parameters. Colliers conducted a broad-based assessment and developed an objective framework incorporating the above-mentioned parameters to assess their relative degrees of importance and impact on various real estate segments such as office, residential, warehousing, retail, hospitality, and alternatives (data centers, senior living, second homes etc.) in the respective cities.
It was conceptualised to clean the opaque ecosystem of Indian real estate; was touted to be the biggest reform of the sector; and expected to enhance the home buyers’ confidence index. But seven long years after the enactment of the Real Estate Regulatory Authority (RERA), it has still not evolved as a stamp of trust for the harassed home buyers. RERA’s tryst with trial & error has not only dented the confidence of the home buyers but also lent credence to the perception that complaint with RERA rather gives an edge to the builders. After all, RERA has been relegated to be the balancing act for both the builder and the buyer. A Track2Realty analysis.
As RERA (Real Estate Regulatory Authority) is close to its 7 years of completion, the home buyers across the nation have more to complain than compliment with what was supposed to be a game changer legislation. The buyers rather question as to RERA has been enacted to serve whose purpose. Most of the home buyers across India’s top 10 cities point out that the ground realities have not changed for them. A vast majority of them feel it has opened another window of litigation and thus hurts than helps the buyers. Issues range from lack of transparency to accountability, and existing market realities to consumer interface.
The question is what needs to be done. Or in other words, how could real estate consume more out of ‘Make in India’ manufacturing? The question in itself is flawed, if not in sync with the larger eco system issues. Setting up and making a manufacturing unit in India comes with its own challenges. Cheap labour alone would not give India any edge or cost arbitrage over the export items. ‘Make in India’ has to move beyond the rhetoric of nationalism and reforms have to be introduced at each and every level, ranging from lower corporate tax to labour laws and making the country a happy hunting ground for the manufacturers of the world.
Bengaluru and Hyderabad emerged as frontrunners for demand of Grade A office space in Q1 2024, cumulatively accounting for more than half of the India leasing activity. The office market of Hyderabad especially demonstrated a strong momentum with 2.2x space uptake in Q1 2024 as compared to the corresponding quarter last year. This demand was driven by Healthcare & Pharma and Technology sectors. Amongst other major office markets, Mumbai too experienced a notable surge in leasing activity, an impressive 90% YoY rise in Q1 2024.
At the beginning of 2024, as the Indian real estate stakeholders (self-styled industry experts within the realty media landscape) are yet again influence peddling their bullish narrative, the reality check by Track2Realty clearly finds that the sales growth post-Covid has neither been broad based nor democratic. Real estate is yet again emerging as a parking lot of big money post the pandemic, as visible with the off-take of luxury & super luxury despite the stagnant job growth and wage growth.
Puravankara Limited, (5th best Indian real estate brand as per Track2Realty BrandXReport 2022-23), has recorded a strong sales performance in 9MFY24 with a sales value of INR 3,967 crores, an increase of 89 per cent compared to INR 2,100 crores in 9MFY23.
Isn’t it ironic that in a country where the number of unsold housing units is skyrocketing, the business of real estate continues to be a seller’s market? Contrary to the developers’ influence peddling that the housing market is by and large a buyer’s market now, the fact lies that the developers continue to take the buyers for a ride. The developers’ exploitative practices are not limited to the delay of the project, but also default in delivering the promised amenities, and, most glaringly, with one-sided unfair contract. Track2Realty explains the options before the home buyers.