Fore­cast 2016: The year of com­pact, ef­fi­cient and af­ford­able apart­ments DES­TI­NA­TIONS TO WATCH OUT FOR

Though house hunters will want smaller and ef­fi­cient apart­ments, they will refuse to com­pro­mise on qual­ity

HT Estates - - FRONT PAGE - Van­dana Ram­nani

The year 2015 saw the Re­serve Bank of In­dia cut­ting in­ter­est rates at least four times and end-users fi­nally tak­ing a de­ci­sion to buy their first homes, prefer­ably in lo­ca­tions where the projects were nearly com­plete or ready to move in. De­vel­op­ers also tried hard to meet home­buy­ers’ ex­pec­ta­tions by fo­cus­ing on timely de­liv­ery and launch­ing fewer projects.

So, will 2016 be dif­fer­ent? One ex­pects de­vel­op­ers to be more earnest in right-siz­ing and right­pric­ing their of­fer­ings. Smaller, yet bet­ter-de­signed and more ef­fi­cient homes will de­fine the res­i­den­tial mar­ket space. The mar­ket will also start look­ing up in about six to 12 months, but it will have to be backed by in­ter­est rate cuts, in­creased de­mand for com­mer­cial spa­ces and more job cre­ation, which will have a direct im­pact on de­mand for res­i­den­tial units.

The year will con­tinue to see only end-users dom­i­nat­ing the res­i­den­tial space. In­vestors will come into the pic­ture as the mar­ket picks up in the next six months. The de­mand is likely to re­main ro­bust for value-for­money units in well-de­vel­oped lo­ca­tions in the NCR. Ar­eas of­fer­ing units in the ₹ 3,000 to ₹ 5,000 per sq ft range will at­tract buy­ers. Such units will in­clude ready-to-move-in apart­ments in New Gur­gaon, Ghazi­abad and Noida Ex­press­way.

Qual­ity and timely de­liv­ery will be key for buy­ers so de­vel­op­ers are likely to be more fo­cused on th­ese de­mands. Mone­tary eas­ing, mean­while, is ex­pected to be fully passed on to end-users by 2016. It is hoped that the gov­ern­ment will con­tinue to pro­vide in­cen­tives to sec­tors such as con­struc­tion ma­te­ri­als, while ag­gres- GHAZI­ABAD: Vaishali, Indi­ra­pu­ram and Kaushambi FARID­ABAD : Ne­harpar (Sec­tors 75 to 85), Su­ra­jkund, NIT, Dayal Basti NOIDA : Sec­tors 71-78, 93, 100, 101, 128-134, 137 and 143 GREATER NOIDA : Pari Chowk, Greater Noida (West), Al­pha and Beta GUR­GAON : Dwarka Ex­press­way, Golf Course Road Ext and New Gur­gaon sively driving ur­ban in­fra­struc­ture projects, says An­shu­man Mag­a­zine, chair­man and MD, CBRE, South Asia Pvt Ltd.

Sta­bil­ity in prop­erty prices across ma­jor lo­ca­tions along with in­ter­est rate cuts led to in­creased con­sumer con­fi­dence last year. “We hope that the com­ing year will bring in a lot of re­forms too. The sec­tor has been de­mand­ing in­dus­try sta­tus and this will help bring in change for the whole sec­tor. There is a need to stream­line taxes and bring in fur­ther tax con­ces­sion to en­able more liq­uid­ity in the econ­omy, giv­ing a boost to higher con­sump­tion. We are hope­ful that the GST will be able to ad­dress this con­cern. Over­all, GST ap­pears to be a bene­fac­tor for the real es­tate regime, pri­mar­ily in light of the ex­pected free flow of credit,” says Brotin Baner­jee, MD and CEO, Tata Hous­ing De­vel­op­ment Com­pany.

End-2015 brought some pos­i­tive news as the com­mer­cial realty mar­ket showed early signs of re­cov­ery. The growth tra­jec­tory will be main­tained. Higher de­mand for of­fice spa­ces means more em­ploy­ment gen­er­a­tion, which in turn fu­els 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. But the biggest chal­lenge will be to re­duce the un­sold res­i­den­tial in­ven­tory and that may take months to a few years.

San­jay Dutt, mana gi ng director, In­dia, Cush­man and Wake­field, feels that the next year will wit­ness net ab­sorp­tion of of­fice space of ap­prox­i­mately 30-32 mil­lion square feet, higher

Rep­u­ta­tion as an in­dus­trial city con­tin­ues to mar this city’s prospects as an at­trac­tive realty des­ti­na­tion. How­ever, Metro con­nec­tiv­ity is likely to help de­velop Farid­abad’s growth story

This ur­ban cen­tre needs to de­velop al­ter­na­tive modes of con­nec­tiv­ity with Greater Noida other than the ex­ist­ing NoidaGreater Noida Ex­press­way. The than 2015 lev­els. This buoy­ancy in the of­fice sec­tor is ex­pected to trickle down to the res­i­den­tial sec­tor in the medium-to-long term, spurred by lower in­ter­est rates, higher con­sumer con­fi­dence and gov­ern­ment ini­tia­tives.

The pas­sage of the real es­tate reg­u­la­tory bill is much needed as it will be the only in­stru­ment by way of which buy­ers will be­come more con­fi­dent about the sec­tor and builders, too, will be under pres­sure to de­liver qual­ity units on time.

The sec­ond half of the year will see the first shoots of real es­tate re­cov­ery, says Sa­man­tak Das, chief econ­o­mist and na­tional director- re­search, Knight Frank (In­dia) Pvt Ltd. The sec­ond half will be much bet­ter than 2015 and 2014 but might fail to meet the bench­mark of

Prices not likely to change much till pos­ses­sion of de­layed hous­ing projects is handed over

Prospects look good be­cause of the Dwarka Ex­press­way and Rapid Metro. Cer­tain res­i­den­tial cor­ri­dors within Gur­gaon will ben­e­fit more from the in­cre­men­tal of­fice sup­ply and in­fra­struc­ture de­vel­op­ment 2013 in terms of vol­umes. Rise in prop­erty prices will more or less be in­fla­tion-ad­justed (around 2% to 3%) and builders will fo­cus on vol­umes rather than mar­gins to clear un­sold in­ven­tory.

Af­ford­abil­ity of projects will be­come the prime fo­cus and builders will be look­ing at de­sign­ing units that meet buy­ers’ bud­get. Across cities, de­vel­op­ers will be seen ac­tively re-con­fig­ur­ing their projects to align with mar­ket de­mand, in the process sav­ing on costs and pass­ing on the ben­e­fit to buy­ers. Also, a ma­jor­ity of the new hous­ing pro­ject launches, like last year, will be at lower rates than those of ear­lier projects launched in the same lo­ca­tions but over­all launches will be few and far be­tween, the fo­cus be­ing pri­mar­ily on con­sol­i­da­tion and de­liv­ery.

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