While property still remains the preferred choice of investment of nearly all the Indians, as high as 92 per cent, they are pretty scared of trading in the property market now. While new launches have few takers, most of the transactions are happening in the ready-to-move and other secondary market options.
Nearly seven out of ten, 68 per cent, home buyers prefer ready-to-move property because they can avail for tax benefits only after the possession of the house. Saving tax on the EMI’s is one of the big reasons why nearly eight out of ten, 78 per cent, plan their house buying.
RICS India Commercial Property Survey suggests an easing in global strains has led respondents to upgrade their expectation in both the occupier and investment markets in the country. With real estate clearly feeling the effects of the softer macro environment in the previous two quarters, the market is now witnessing improving results across several indicators, which could signal the beginning of a turnaround.
A White Paper on black money tabled in Parliament on Monday, May 21, has named real estate among others as most vulnerable to menace of black money. Given that land is part of the top black money generators, the white paper suggested that states could consider taxing farm income to curb black money.
There is a clear disconnect between what home buyers want and what they get. And it is here that the home buyers are ready to pay more to get what they see to believe. While the frequency of launching new residential projects have declined in the last year or so, there is also sizeable inventory building up that is available for buyers who are willing to make that investment.
While buying a house majority of the Indians have now matured to pay for ready-to-move property than a castle in the air. No wonder, despite the high appreciation potential, the new launched projects have few takers and there is hardly any market for a pre-launch offer. Thanks to the poor delivery of the real estate developers, unmet commitments and execution risk involved, at least the end users are not interested in new launches anymore.
Experts in the urban policy and planning are of the view that since none of the traditional solutions have worked, it calls for fresh approach and out-of-the-box thinking to make India slum free. Pranay Vakil, Chairman of Knight Frank India outrightly blames the ambiguous policies coming in the way of slum redevelopment. He says there is no dearth of expression of interest and even some of the international players had recently tied-up with the Indian partners for the same. He urges the Government for consistency in policy guidelines if slum free cities have to be a realty reality.
If you look the FDI side of the story over the years, initially there was an influx of a lot of foreign funds and in 2007, it was driven by the US. But the 3-4 years that investors have been here, we have seen a lot of selling. So a lot of investors withdrew or reduced their portfolio and even though being a fund, we found ourselves putting our hands into the acquisitions, marketing etc. It was not our comfort zone and we have been playing the role of a developer instead.
Despite the market slowdown and high competitiveness among the ‘Big Boys’ in the Indian residential real estate business, smaller builders of residential projects can still corner a healthy market share. It is all a matter of knowing which league to play in, and how to play.
While buying a house majority of the Indians have now matured to pay for ready-to-move property than a castle in the air. No wonder, despite the high appreciation potential, the new launched projects have few takers and there is hardly any market for a pre-launch offer. Thanks to the poor delivery of the real estate developers, unmet commitments and execution risk involved, at least the end users are not interested in new launches anymore.