What’s in store for homebuyers?
As many as 39% buyers wish to purchase a property for self-use this year, says a survey. This means that the investors in the market will be far less than previous years
he year 2014 saw people shying away from buying their first homes, choosing to wait for prices to correct and the apex bank to slash interest rates. Unfortunately for them, the wait was in vain. While developers did not lower quoted prices, they went ahead with flexible payment options, freebies and add-ons and the Reserve Bank of India chose to control inflation rather than push demand- led economic growth.
So, will 2015 be different? One expects developers to become more earnest about right-sizing and right-pricing their offerings. Smaller, yet better- designed and more efficient homes will define the residential market space this year and selective correction may take place in over-priced cities, say experts, adding the market will take at least 12 to 18 months to start looking up but it will have to be backed by interest rate cuts and creation
AThe city definitely needs to get its act together and fast because if the land pooling policy in Delhi becomes operational, Gurgaon may have to face tough competition. Outlook for luxury not too great s we welcome the New Year, it is important to take stock of the overall mood of homebuyers in terms of their aspirations and fears. Makaan. com, conducted a survey across Mumbai, Delhi NCR, Bangalore, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad, Chandigarh and Indore for which over 1100 homebuyers participated. The key findings of the survey were that as many as 39% buyers wished to purchase property for self-use and that location would be an important deciding factor than price. Riding on the government’s vision of Housing for All, affordable housing will be the flavour of the year.
Higher demand for office s paces means t hat more employment will be generated, which in turn will fuel residential demand. As a thumb rule, for every 100 sq ft of office space that is taken up, there is 600 sq ft to 800 sq ft of residential space which is needed.
“The Government should focus on getting the regulatory bill passed as the real estate market is experiencing significant pain, especially the investor-driven markets. As many as 50% sales in a year in NCR are driven by investors. As a matter of fact, NCR sales in a year equal that of sales in Chennai, Bangalore, Mumbai put together. The end-user this year will continue to be cautious unless there are interest rate cuts and more value-formoney products in the market,” says Anckur Srivasttava, chairman of GenReal Property Advisers.
Rajeev Bairathi, executive director, North & Capital Markets, Knight Frank India, is of the view that the market is awaiting fresh triggers such as reduction in interest rates on Established areas such as Vaishali, Kaushambi, Indirapuram to witness demand as new supply is less home loans, a further improvement in buyer sentiment on the back of employment growth and a healthy double digit growth in corporate staff compensation packages. All these factors are expected to improve affordability which should make year 2015 much better as compared to 2014 in terms of sales volume. ‘’We, however, do not expect any significant appreciation in prices for another two to three quarters”.
There are some experts, however, who are optimistic about the market and say it may start looking up in the second half of the year. “The anticipated pick-up demand should take place from the second half of 2015, though the demand could be boosted earlier if interest rates are reduced and/or the Government introduces some additional taxation sops in next year’s budget. However, we can also expect to witness increased institutional purchases of large number of units by investment funds, who have been setting up dedicated funds to purchase units in No significant run up unless a differentiated product is introduced in the market. Prices to more or less remain stable bulk during their construction phase and off-load them once they are completed. Developers t oo could increase the supply by launching more units, if the Government provides the right incentives by reducing the time taken for regulatory approvals, removes bottlenecks in the supply of raw materials, etc,” states an analysis by Cushman & Wakefield The only bright spot in the dark cloud. Many options available in the ₹ 3,000 per sq ft plus range in the Neharpar area Liquidity concerns more pronounced in areas where there are more small developers as the default risk will be very high