Realty sector is likely to revive in 2014
While the Indian realty segment has been moving at a snail’s pace for the last 2 years, thanks to the lack of support extended by the policy makers and the market, the overarching theme in 2014 may find its way into the new session. Experts have a strong optimism that 2014 will be a turnaround year for the Indian real estate sector.
With high property prices and costlier borrowing hitting the Indian realty segment in 2013, developers are of the notion that the slowdown may ‘flipside’ in the new year. Post general elections in 2014, sales of residential and commercial units in the nation are likely to pick up.
The good things
Amid all the negativities and stagflation in 2013, there are two major initiatives taken by the government that is likely to phase out the slowdown in the Indian realty sector-the revised Land Acquisition Act and the proposed Real Estate Regulatory Bill. The two initiatives are likely to rein in all the major hurdles in the realty segment in 2014, making the sector more accountable and transparent.
In addition to all the good news, the cash-strapped real estate industry also cheered for relaxing of the FDI norms and braced up SEBI’s draft guidelines to give way to REITs(Real Estate Investment Trusts). Once implemented, such a move is expected to revive the global investor interest in a slow property market and help the end-users gain an upper hand.
Growth of the residential sector
According to market reports, the absorption of residential units in major metros like Pune, Mumbai and Delhi-NCR took a beating in Q1, Q2, Q3 of 2013. However, the year 2014 is likely to witness an increase in absorption of residential units post general elections and will phase out the growing inventory holding of the developers.
On a Pan India basis, the residential real estate prices may grow by 10-12% Y-OY, factoring a gradual rise in demand. In simple word, the year 2014 will usher in a positive climate for investments in the realty sector, eventually contributing to economic recovery. 2014 will also witness the establishment of realty regulator and REITs, coupled with a rise in vacancy rates of office properties.
