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Real Estate : 2014


With economy witnessing a downturn, interest rates and inflation reaching all-time highs, 2013 has been one of the most eventful years for Real Estate in India. While introduction of Real estate regulatory bill and land acquisitions bills in the parliament was positive for the real estate industry, end users sitting on the fence expecting a fall in prices lead to a contraction of demand in the past few quarters. This year Mumbai, Kolkatta and other key markets saw less activation from real estate players as delay in approval process impacted project launches.

The market has turned from sellers to buyers in 2013 with attractive offers from various developers across the range of projects. The Indian economy is recovering and real estate sector is expected to stabilize in the next two to three quarters. We would anticipate this sector to grow, albeit at a slightly lower pace, as the demand for housing still appears to exceed supply, and the weakening rupee makes India an attractive real estate investment destination for non-resident Indians. We expect the market to start an upward momentum by end of 2014 and suggest end users and investors to utilize this opportunity to book their dream homes as these offers would vanish once the economy starts showing signs of recovery.

9Stability in property prices during 2013 will give the required confidence to consumers who have been delaying their decision to book their dream homes in 2014. We believe that affordable and low-housing segment is likely to see the highest growth but other segments will also grow as people aspire for better homes, better quality of life and hence invest more in buying their own homes. On the other hand, the demand for luxury housing in India will continue to growing due to influx of global lifestyle trends along with changing lifestyle and aspirations seen amongst young India. The demand for luxury homes has been increasing from cities such as Bangalore, Delhi, Chennai, Kolkata, Mumbai and others.

The key reasons responsible for the growth seen in the real estate industry in India include liberalization of Government policies. Furthermore, FDI in multi brand retail will also give a push to the growth in the real estate sector. It will trigger the opportunities for retailers thus leading to an increase in demand for real estate. Ancillary and service industries such as IT/ITes, manufacturing industries which are being set up in tier 2 and tier 3 cities also play an important role for rise in property demand.

10As the recession market, we need to concentrate on execution as that would help in building the credibility and that’s the opportunity the branded players can built up. Going forward the key to real estate growth would be to get infrastructure status with relevant subsidy for affordable housing, subsidy on technology enhancement so that less dependent on manual labour, curb on raw material cost as that will impact the quality and timeline. Finally the interest rate to be reduced so as to make it attractive enough for buyers

Soft Launch stage: To invest or not to invest?

Planning to buy an apartment? Confused? Skeptical about that first step?

We won’t be surprised if you answer all the above questions in affirmation. Buying an apartment is unlike buying a fancy gadget, something we are all masters of, thanks to the social media age. But here’s a tip that will help you go a long way when investing in a property- If you are planning to buy an apartment in an under-construction project, investing at an early stage of the project can get you reasonably lower rates but then it comes with risks attached.

There are two stages in which a project is launched:

The soft launch stage: This is the first phase of the launch when the developer opens the booking for brokers and select investors.

The launch stage: The second phase is the formal announcement of the project. This is when the booking opens for the general public.

Searching for a property is definitely one of the most time consuming and risky activities. You start with reading advertisements, then talk to real Estate developers, then read more advertisements, come to a conclusion and then change it again because of 3rd party interventions. In short several weeks pass by before you identify a property. And by the time you approach the builder, you notice increased prices.

So what should you do in such a situation?

They say the early bird catches the worm. Same is the real estate story. You can take advantage of the soft launch stage, when homes are offered at an inaugural discounted price as the developer is in the process of getting approvals. During this stage, the developer tries to sell a certain amount of units in the upcoming project through brokers and investors to raise early money for its projects. At this stage the developer is usually ready to reduce the prices further with higher upfront payment. The only concern with booking in the pre-launch stage is on the project getting delayed because of the delay in getting approvals but if you are an investor and going with a trustworthy brands, this is the best time to get into an under construction project. The logic is that more buyers in the initial stage mean more advances coming in, which in turn facilitates the builder to start the construction of theproject .

Just remember that builders first invite their existing customers in other projects and investors and brokers in the region. In order to become a part of the soft launch phase, you would need to express interest in the property beforehand for the developers to shortlist and invite you.

Stick to a trustworthy brand name, because then you can see their work portfolio of their other projects and have no worries. It’s not that we are suggesting you to invest in property at the early stage. But consider the option. Talk to a good property dealer in the area and ask him to keep you updated on new launches.