Local Business

Indian real estate sector set for rebound

Issac John – Associate Business Editor
Filed on September 13, 2014

Sector remains a buyer’s market despite prolonged period of sluggish growth

Indian real estate sector set for rebound (/assets/oldimages/india_0913.jpg)

Ram Buxani and Saeed Al Zarouni, managing director of Fair Exhibition, during the inauguration of the Kerala pavilion at the Gruhapravesh Dubai property show in Dubai on Friday. The Trinity Group says Kerala’s residential sector offers an ideal investment opportunity as prices remain very attractive. — KT photos by Mukesh Kamal

The Indian real estate sector, which is projected to rebound soon after a prolonged period of sluggish growth, continues to be a buyer’s market offering investors and end users attractive options, leading builders said on Friday.

With house prices under pressure amid oversupply, value of properties across all major cities has recorded a steep fall. “This is perhaps the best time to invest in the real estate sector as prices remain at the low band. With the economy showing signs of a robust growth, an upswing in prices cannot be ruled out in the near future,” builders taking part in Gruhapravesh Dubai, the property show by IndiaProperty.com, said.

The International Monetary Fund’s recently-launched data series on global housing prices shows that among 52 major markets for which the IMF has collated house price data, India has witnessed the steepest fall.

A recent report released by Knight Frank showed that in the first half of 2014, both the new launches for residential real estate and the sales volumes declined significantly. If the new launches fell by 32 per cent over that of the first half of 2013, the sales volume in the period dropped 27 per cent. Analysts, however, project that sales volume in the second half of calendar year 2014 may rise by 26 per cent on account of the change in overall sentiments after the government announced sops for the housing sector in the 2014-15 budget and the economy recorded signs of growth.

The IMF’s calculation on the annual percentage change in property prices shows that prices in India fell by 9.1 per cent, the highest among major real estate markets. The fall is even worse than in countries struggling with the ongoing European Union financial crisis.

Ram Buxani, group president of the ITL-Cosmos Group, opened the two-day show at Crowne Plaza Deira. The event has lined up around 200 new projects by 60 top builders from India.

L&T, Mahindra Lifespace, Jaypee, Godrej Properties, Provident, Rakindo, Kochi-based Trinity Builders and Developers, Superstone, Crescent Builders, Paul Alukkas, ETA Star, Vaishnavi, MIR Realtors, Jos Alukkas and Mantri are among builders participating in the expo.

The Kerala pavilion, showcasing properties of the state’s leading developers, has lined up projects in Trivandrum, Kochi and Calicut and other major cities

Sanil George Koshy, manager of sales and marketing at the Trinity Group, said Kerala’s residential sector offers an ideal investment opportunity as prices remain very attractive. Trinity Builders is offering apartment units and luxury villas in Kochi and Alwaye.

K.V. Haseeb Ahamed, secretary of the Confederation of Real Estate Developers Associations of India, Kerala, said the property sector is geared for a pick-up as there are signs of a general improvement in the economy with prospects brightening in the job sector. “It is definitely a buyer’s market now, with low prices and plenty of buying options.”

With non-resident Indians warming up to a fresh round of investments, the total estimated sale value is expected to reach $40 million mark this year, organisers said.

Ganesh Vasudevan, chief executive officer of IndiaProperty.com, said the past few quarters have seen the Indian economy on a recovery mode.

“The new government and its many reforms have opened up multiple avenues for builders and investors alike. With improvement in infrastructure, strengthening of Tier II and III cities along with many other proposed development projects the government has paved way for a new beginning. Evidently real estate prices have shown a reasonable appreciation as the buyer sentiments improve. Gruhapravesh 2014 is here to provide the right platform for home buyers at this crucial juncture.”

Property experts point out that the total number of houses launched across India fell 32 per cent against the year-ago period in the first half of 2014.However,in the second half of the yearthey expect the total launches across the six major cities of India — Mumbai, Delhi, Bangalore, Hyderabad, Pune and Chennai — to rise fiveper cent.The total year-end launches are likely to witnessa de-growth of 16 per cent at 312,585 units year on year.

— issacjohn@khaleejtimes.com

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