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Indian Property Review has announced Top 20 projects in Noida Extension. The projects were evaluated on the basis of Location, Price, Facilities and Builder’s Track Record and following projects emerged as winners with highest ratings …

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Real estate in growth mode

Submitted by on Wednesday, 3 March 2010No Comment

pic98The last decade has seen major socio-economic developments in India, with the nation last five years growth recorded at a compound annual rate of 8.9 per cent.

This impressive number meant improvement in the income level of urban Indians and the middle class and provided them with a significantly greater purchasing power than they had a decade ago.

This, in turn, has amplified the demand for more and better housing, increase in office space, progress of contemporary trade formats, considerable demand for hotel reservations and the want for improved leisure activities.

With the collapse of Lehman Brothers, the Indian real estate market also suffered a major shock. The effects really snowballed through the liquidity centric real estate market leaving a track of defaults, delays, and losses. India was forced to temporarily halt the growth of its real estate sector.

The Indian economy continued its growth at 6.7 per cent in 2008-09 even though some sectors such as exports, real estate, IT, etc, had to suffer due to the impact of the global meltdown.

Now, as the country is realising the need to preserve its growth momentum, the real estate sector can be detained for long. Though the real estate demand in Bangalore has witnessed a slowdown of six to 11 per cent, depending on the sub-city , when taken asaper contagion total demand, there has been absolutely no variance in the demand within sub-cities.

In the recent months, property prices have corrected by 22-42 per cent in major cities, though 10-15 per cent downside is further expected. Despite this, India still has a housing deficiency of 23 million units.

In Bangalore alone, 41 per cent of the demand is for residential properties in the sub-Rs 40 lakh range and 26 per cent for those in the Rs 40-75 lakh range, according to a threemonth survey by a real estate portal.

The survey also reports the oversupply of properties above Rs 1 crore and above Rs 2 crore. In such a scenario, I believe property developers should try to synchronise their project specifications and actual demand to create a sustainable business, says Irfan Razak, Managing Director, Prestige Group.

Since the last one year, Bangalore has been injecting the affordable housing trend into the real estate market. And with the massive housing shortage, there is an immense opportunity for real estate players to plan affordable and mass housing projects.

Though there is massive demand shortage for high-end and luxury apartments, the demandsupply gap in the affordable housing sector is quite high.

Banks have reduced their interest rates on quick loans and the prices for steel and cement have gone down considerably for developers to launch affordable housing projects.

We, at Prestige, have also been concentrating on affordable real estate projects and have dedicated this year to completing and delivering ongoing projects rather than taking up new ones. For example, we completed the construction of the Forum Value Mall at Whitefield, Bangalore, designed to be the sole `Outlet Mall’ in the city, he said.

Spanning over 3 lakh square feet, the mall features over a 100 brands, both national and international, most of which are factory outlets offering unbelievable discounts throughout the year. This is the second offering from the Forum brand.

Continuing with this trend, The Forum brand is all set to expand to other cities now. In the pipeline are Forum malls in Hyderabad, Cochin, Chennai each being built with an investment of about Rs 300 crore.

My optimism that an economic resurgence is on its way is stronger than ever based on the World Economic Outlook Report by the International Monetary Fund IMF. Though the worst is over and the sun seems to be emerging from behind the dark storm clouds, it is imprudent to breathe the sigh of relief yet. It is time that we studied our mistakes, learnt from them and ensured that we did not repeat ourselves, he added.

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