While some reports have predicted correction in Mumbai realty market, Babulal Varma, Managing Director of Omkar Realtors & Developers assert that rising demand and low availability of ready-inventory will make Mumbai the most sought-after property market in 2011.
The world’s largest and Mumbai’s oldest Red Light District ‘Kamathipura’ known for its kothas that is brothels engaged in flesh trade is now turning golden with the increasing interest of the real estate developers there. Thanks to the Mumbai police that the increasing pressure on brothels under the Immoral Traffic Prevention Act have compelled the operators to shut the brothels and move to suburban area like Navi Mumbai for resettlement; making way for the real estate developers to plan out commercial complexes in the area.
Om Chaudhary, CEO or Fire Capital Fund has a word of caution for Indian realty market and he believes that while there’s a huge hunger line for the realty, FII’s inflow can be a matter of concern since China is going to control the GDP.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has suggested the government to introduce Real Estate Investment Trust and Real Estate Mutual Fund to enable investors to own a diversified portfolio of professionally managed assets in the real estate sector. In a note submitted to the government, the Chamber said that the Indian Real estate sector currently lacks any monetization vehicle for capital intensive verticals such as commercial offices and retail malls.
The Fitch Ratings 2011 outlook for the Indian real estate sector seems to contradict itself. While it says the realty market is stable in the year, it also warns of a negative bias. The negative forecast of Fitch Ratings is, however, based more on the sentiments than the emerging market reality.
Emaar MGF today challenged a single judge’s dismissal of its plea for restraining Delhi Development Authority from encashing its bank guarantee worth Rs. 183 crore due to delay in completion of the Commonwealth Games village.
Global property consultant Jones Lang LaSalle has cautioned that housing prices in Delhi-NCR and Mumbai have reached the peak level of 2008 and any further rise in the rates will adversely affect the demand. It said the prices in the rest of the country may firm up by about 10-15% next year to touch the 2008 level.
Finance Minister Pranab Mukherjee has urged the real estate sector to be sensitive to the purchasing power of the poor while pricing their housing units. Speaking at the 10th national convention of the Confederation of Real Estate developers” Association of India (CREDAI) in New Delhi on Dec 16, Mukherjee also called for greater integrity in development, construction and marketing or real estate business.
After one and a half years of gradual consolidation, real estate in India has fathomed its own comfortable ground, and is poised at the right threshold to take a giant leap in years to come, according to the forecast of the Jones Lang LaSalle, the global real estate services firm.
While there seems to be a crisis of credibility in the real estate sector on part of the investors, a survey by the Associated Chambers of Commerce and Industry of India (Assocham) says otherwise. It says the traditional investment options like gold, government bonds and bank fixed deposits are considered old school.