Real estate sector: Growth starting, ...

Real estate sector: Growth starting, but no bull-run yet

Posted in the Top Stories Forum

Since: Jan 14

Germany

#1 Jan 4, 2014
The year 2013 was a year of survival for the real estate sector, but expectations are now high among developers and analysts. The industry is pinning hopes on a mid-year turnaround after the General Elections, it is not likely to materialize given the time lag for policy implementation.

So how would 2014 pan out for realty? The first three quarters would see much of the problems of last year persisting, before showing some signs of change. Few experts believe that prices in several locations will go northward.

That would be constraints since the problems of the sector remain unsolved, and policies have made no substantial impact, and those on the cards may not be enough to give the required momentum.

Persistent problems

It was a year of “slow-down, stagnancy and stalling” for real estate, says Sachin Sandhir, MD, South Asia, Royal Institution of Chartered Surveyors (RICS), a body certifying professionals and setting standards for the sector.“It was a year of much economic turbulence. The current account deficit has fallen to 1.2 per cent of GDP in July-September period, while inflation is again above 10 per cent, as recorded in October. Wholesale price inflation was at an eight-month high of 7 per cent while retail inflation crossed 10 per cent. The rupee dropped sharply by net 22 per cent during first two quarters. Private equity (PE) investments witnessed a drop of over 65 per cent for the quarter-ended September 2013. All of this has negatively impacted investment sentiment.”

Even as the rupee fell, NRIs cashing in on the foreign exchange situation did not show up in sales numbers. The Reserve Bank of India’s actions too, did not help.“Monetary tightening resulting from RBI’s measures to control inflation was the major macro influence on the real estate business in India,” says Shishir Baijal, CMD, Knight Frank India, a real estate consultancy firm.

“High interest rates, spiralling vacancy levels and lower margins arising from inflationary pressures too, led to a slowdown which resulted in reduction of new launches and also delayed project deliveries.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Top Stories Discussions

Title Updated Last By Comments
News Plurality of Americans think Trump is failing (Mar '17) 2 min Behewawawawawa 42,009
Prove there's a god. (Mar '08) 13 min trifecta1 989,741
Why are Europeans a race of savages, thieves, a... (Jun '15) 15 min Rabbis on the Run 129
Bring the jobs back to the USA! 42 min Paul McCartney is... 618
News Roman Catholic church only true church, says Va... (Jul '07) 48 min Rabbis on the Run 690,456
Sometimes I like Louis Farrakhan's "sermons"...... 1 hr Paul McCartney is... 107
our STORE is starting on politics 2 hr Curious 4
More from around the web