Trends investors should look out for

The “long-pending” Real Estate Regulatory Bill has not been able to get through the deadlock in the Indian Parliament. “The [real estate] industry has been assuming that it will be passed sooner or later,” said Anuj Puri of JLL India. “Given the many times it has undergone revision, the only constant on the Rera front has been change … and it is now high time that it be kicked into real gear. There will be no point in time when the government will not face any more resistance to this very important piece of legislation, so the need to evolve consensus is of utmost importance to enable passage of the Bill into law.” With few exceptions, India’s developers are intent on project delivery than new launches. “A generally moderated supply pipeline is definitely part of the new strategy,” said Puri. “Though demand exists, it definitely does not warrant a very exuberant supply scenario.” Many developers have reduced apartment sizes to be able to bring down their rates in the costlier cities. This has in many cases led to the disappearance of balconies and other features that used to be a norm, according to JLL. This has led to a reduction in usable all-round floor spaces. Realty focused investments into India from the UAE is essentially driven by expatriates. But, this year, two UAE based ventures launched India-specific funds targeted at institutional/high networth investors. The current NDA’s government ambitious land acquisition bill, will mainly affect the farmers, since it’s for their protection. It will not have any impact on the property development sector. They may not be offering gold bars and BMWs, but India’s developers are still in a generous mood. “Most of the reputed pan-Indian developers are still using discounts/offers/schemes etc as it used to be 9-10 months ago,” said Manish Jaisinghani, Mokanro Realty. “One reason could be the large number of unsold stock available with them, which has mounted enormous pressure towards repayment of their bank/private loans. To get rid of that, many developers have cut down profit margins and releasing units with investor-friendly offers.” The repo rate — the benchmark used for lending — is currently 9.5 per cent against the 10.1 per cent in June. “It remains a positive note for the realty sector,” said Sushil Kumar, Auric Acres Real Estate. From a macroeconomic perspective, India is growing at a faster clip, far better compared to most BRIC countries,” said Raghavan of Ozone Group. “The long troubling issue of inflation has been brought under control. These two alone are adequate to impart necessary momentum to a lacklustre real estate industry.”

— M. N.