Market Slow Hai?

Market slow hai

 “It is a comfortable feeling to know that you stand on your own ground. Land is the only thing that can’t fly away”

Anthony Trollope

Land and real estate can be considered as one of the biggest assets anyone can acquire or keep. It is about the only tangible asset having a value which mostly appreciates with the onset of time and if at all depreciates does so on occurrences of natural calamities. It has the highest resilience to economic depression and deflationary trends and also provides one with a sense of social and economic security.

There is often a phrase prevalent in the current real estate market in India which asks –“Market slow hain?” (Is the market demand slow/lagging?) Contrary to what it asks, the Indian real estate scenario is on a boom almost ubiquitously in India. With a change in the government and foreign policies, there has not only been a rise in investments from investors in India but there has been a sharp rise in Foreign Direct Investments as well with offshore companies finding India as a lucrative market for real estate investment.

Talking of commercial and office space, its demand grew from 3.9 million sq.ft in 1998 to 16 million sq.ft in 2004-2005 alone. Over 7000 IT and ITES firms comprised for over 70% of its demand then, 15 % comprising of financial service providers and credit institutions along with the pharmaceutical sector. Cities like Pune, Bangalore, Gurgaon have emerged as one of the prime locations for property and real estate demand in India, especially speaking on the fronts of commercial land and office space requirements.

The real estate industry is highly acknowledged around the globe and is expected to rise at a rate of 30 per cent over the next decade. There have been quite a few factors to boost the demand and market for real estate in India:

  • Foreign Capital Investments:

After a long wait, the government has finally eased up its FDI policies. Analysts predict that there will be a rise in 35 per cent in enquiries with property dealers. Capital coming in from off shore is a benefit to both buyers and realtors alike. With Pune being one of the most prospective places for such growth and improvement.

  • FLAGSHIP
  • ICICI VENTURES
  • ASK FUNDS
  • SAFRON
  • YATRA CAPITAL
  • AVP FUNDS
  • IL&FS
  • PORTMAN HOLDINGS
  • BLACKSTONE REALTORS
  • MATRIX

     etc have already invested and continuing for last 5 years with amazing returns.

  • Builder Benefits:

Due to the increased FDI, there is a huge influx of money into the industry aiding speedy construction and down payments required for financing the projects leading to an overall growth of the industry.

  • Cheaper homes:

Due to the eased up government policies and high influx of money from off shores, funding for projects has been made available at cheaper rates thus leading to cheaper residential projects and homes for the end user, boosting the living standards as a whole. Affordable housing projects are in great demand.

  • The onset of REITs:

Real Estate Investment Trusts(REITs) are many alike mutual funds, for real estates. Investors pool their finances together to construct costly and huge projects. The finance minister has announced that REITs would get a status of being tax pass through, thus making REITs a reality and boosting the sector.

  • PMRDA:

Pune Metropolitan Region Development Authority will be responsible for maintaining all growth drivers inside and on the Outskirts of the city too. So BRT ( Bus Rapid Transit ), Metro, Bridges, Water supply etc basic needs will be related to single authority PMRDA. With new GR the Pune city new limits will be as big as Mumbai which makes this city more lucrative destination for investment

Tier I cities like Pune have benefited the most out of the recent times. Pune is the Seventh largest metropolis in India and has emerged as an IT hub, having few of the highest valued residential and commercial spaces. Places like The Phase I and Phase II of Hinjewadi have been declared as a Special Economic Zone (SEZ). The Gamma Global city is just an example of the advancements Pune has made, having offices and manufacturing units of companies like Coca-Cola, Whirlpool India Ltd, LG, Alfa Laval, Honeywell Automation India, GM Motors, Mercedes Benz etc.

It is a very lucrative market for realtors and real estate investors due to the highly developed infrastructural facilities and high demand for residential spaces as well due to the high number of educational institutions and universities,  where people from all over India and the globe come to live and study.

To conclude,

Market trends suggest India be a lucrative investment for domestic and foreign investors alike. If organised properly, it can boost not only the native market but also other sectors through its forward and backward linkages.

So for good & reputed developers this is just a phase of market, they have seen much worst than this In 1998 & 2008, they know how to manage inventories, they know where and how to raise funds to fulfill the commitment, of course they have taken up Risk of more than 100 cr, they will make every move possible to grow their investment & hence our hard earned 60-70 lacs will also grow along with them.

There are 80% developers build 20% of the stock whereas 20% developers contribute 80% of the stock.

Market is Never SLOW indeed!