Commercial real estate: Key demand drivers in red-I
Global financial uncertainty, shrinking demand, liquidity crunch, repo hike and demand-supply mismatch…all is not well with the commercial real estate in India.
Global financial uncertainty, shrinking demand, liquidity crunch, repo hike and demand-supply mismatch…all is not well with the commercial real estate in India.
India has the second largest population in the world and is expected to overtake China by 2025. Fulfilling the housing needs of the Indian population which is growing at 1.41% annually is a tremendous challenge for the government today.
As the real estate sector in the country stands at a critical juncture, the performance of this sector will be largely governed by the following drivers.
Economic growth and real estate performance are two significantly intertwined characteristics. It is widely accepted fact that demand for real estate space is drawn and influenced from economic environment.
The Indian realty estate companies reeling under plunging sales and liquidity issues have something more challenging to negotiate-the piling debt in their balance sheet and the banks’ deadline to repay coming close.
Will 2011 carry forward gloom in the realty market? That is the question on everybody’s lips today and the sector seems to be only praying that the worst has been left behind in 2011.
Now at the year end it is time we conceptualized the idea of a compendium of yearly handbook that could serve as a ready reckoner to the sector, the media, HNIs and the investors who have keen interest in the Indian realty market.
In the absence of any serious academic research, the sector in terms of brand presence & cutting edge competitiveness has been lacking, to say the least.
Market forces of demand and supply are the most potent determinants of price and the developments in the real estate industry during year 2011 is the latest example.
The real estate sector in Punjab is likely to witness sluggishness in the run up to Assembly elections in the state next month.