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

HT Estates - - FRONT PAGE - HT Es­tates Cor­re­spon­dent

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

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