Year-Ender 2014 and Outlook for 2015
As 2014 draws to close, CommonFloor interviewed industry stalwarts and took their opinion on ‘the year that was’ and asked their ‘outlook for 2015’. Here is what they want to say.
Brotin Banerjee, MD & CEO, Tata Housing Development Company
The Year that Was
From the point of view of the government policies, the year stood out. The new government took some landmark decisions like relaxing FDI norms in the construction sector, providing easier and cheaper loans by granting low-cost housing infrastructure status, allowing Real Estate Investment Trusts (REITs) for commercial real estate. The reduction of excise on cement and steel has managed to offset the rising input costs.
The government is also intent on passing the Real Estate Regulation Bill through parliament, which will help in protecting the rights of consumers and investors. Factors on the demand-side are fundamentally positive, although some micro markets are going through routine corrections. The spurt in urbanization has been driving the demand for housing in Tier I cities but a shift has also been witnessed towards Tier II & III cities like Pune, Nashik, Pantnagar, Rudrapur, Patna, Chandigarh, Ranchi, Jaipur, Indore, Baroda, Surat, Mangalore, Mysore, Coimbatore, Trichy, Bhubaneswar, amongst others.
Outlook for 2015
We anticipate positive development in 2015 ensuring consistent and efficient way of getting project approvals in a timely manner. To tackle the demand of housing requirement of urban India in an effective and speedy manner, there is a need to make changes in the Land Acquisition Act 2013 to remove the avoidable delays in acquiring land for projects. It is also important to pass the Housing Regulatory Authority Bill, 2013 at the earliest to enable single window clearances for housing projects.
The new housing policy should look to suggest some viable methods for making affordable housing possible in public-private partnership (PPP) mode. The government should also look at introducing incentives in the form of tax waivers and lower interest rates should be given to housing developers who comply with provisions of the Green Building code. In 2015, we will continue to identify newer avenues for conducting business, reaching the customer through multiple channels thus ensuring and developing a strongly differentiated position in the consumer’s mind space.”
Rohit Raj Modi, President, CREDAI NCR
The Year that Was
Overall, 2014 was a good year for real estate sector. First, there was a stable Govt. which came to power and showed the intent for reviving Indian realty with some bold steps. Allocation of funds for low-cost housing as well as 100 Smart Cities; incentives to REITs and granting pass-through status for taxation were some of the key budget announcements that gave a fillip to the sector.
Although, these announcements improved the sentiments, it did not lead to actual on-ground conversion of sales. Delays in regulatory approvals and high construction costs continued to plague the sector.
Relaxation in FDI norms came as a breather for the sector reeling through an acute funding pressure. It was indeed a welcome step and would benefit affordable housing segment in the country. It would encourage foreign players to invest here with the removal of lock-in period.
It is evident that government intends to fulfil its dream of housing for all by 2022 and these steps are aligned to that. We are happy that government is now considering real estate as an important sector and is coming out with corrective measures. We are hopeful that soon we would be given industry status as well which will further ease out the funding issues.
Outlook for 2015
We see this momentum going in 2015 as well. We will see increase in our economic growth, and the relaxation in FDI norms will spur demand for construction. As Govt finalises important Land Acquisition Bill and Real Estate Regulation and Development Bill in the Budget session, we see renewed confidence levels of all stakeholders in the sector.
We expect more launches in Affordable housing segment because of the Govt’s focus on ‘Housing for all by 2022’. Commercial segment too would get a boost as businesses are likely to expand because of likely improvement in our economy. It would be interesting to see how Govt comes out with the guidelines on Smart Cities and REITs which are expected to give a major boost to the sector as well as overall economy. Overall, we see an exciting phase with an upward trend in actual conversions on ground.
JP Gupta, Vice President, CREDAI NCR- Haryana
The Year that Was
Indian economy is witnessing positive vibes after the arrival of the new government in 2014. The zeal in the market has increased, especially after the budget has set the ball rolling for the real estate sector. With allocation of more funds for affordable housing, announcement to build 100 smart cities and housing for all, easing of FDI norms, implementation of REITs and the special focus on infrastructure development, with these announcements the government has made it clear that in order to push economic growth.
According to recent research, The positive sentiment can be gauged by the fact that global real estate funds focused on India are seeking to raise $6 billion (over Rs 36,000crore) in new capital on top of $1.6 billion (over Rs 9,000crore) raised in the first seven months of 2014. Most of this is aimed at residential projects. In addition, there is a significant rise in interest from large sovereign and foreign institutional players over the course of 2014.
Outlook For 2015
In 2015, as an apex body of real estate we expect from the government that real estate sector would get infra status and clarity over Real estate regulatory and land acquisition bill, single window system for approval and clearance. We look forward to a brighter era for the real estate sector in coming year which will boost the sentiments of Greater Faridabad, Naharpar along with developing areas of Delhi- NCR.
Aman Agarwal, Director, KV Developers says
The Year that Was
In 2014, with the changing political scenario, Indian economy has observed impetus in every sector. In real estate sector it has observed an optimistic change with the various policy reformations. With the ease in FDI policy and prologue of real estate investment trusts (REITs) has encouraged the sector as a whole. These policy reforms bestowed new hope to attract new investors and helping the sector to relive from cash crunch.
Low-cost housing and housing for all have been identified as a focus area by the Modi government and it has promised shelter to all by 2022.
Outlook For 2015
Hoping ahead, we look forward to see a better future in 2015 for real estate market. We expect that government will focus in some concern areas like with easing interest rate, giving infra status to the sector and bringing transparency with establishing RERA and to give clarity on real estate regulatory and land acquisition bill.
Dhiraj Jain, Director, Mahagun Group
The Year that Was
In 2014, As new and stable government came in existence, Indian Economy has got a momentum with various policy reforms which clearly demonstrated in all the sectors. With announcing housing for all and to build 100 smart cities government clearly proven their special focus for real estate and infra sector. Easing FDI norms and execution of REITs also opened new doors for foreign investment.
Outlook For 2015
We are very much sure that housing demand and potential of the industry will increase in 2015. A research indicates that luxury housing is registering maximum growth, owing to increasing HNI (High Net-worth Individuals) population and growing aspirations of people looking for luxury lifestyle. Subsequently, we are hoping that government will bring more transparency through RERA and land acquisition bill and RBI will reduce interest rate to salvage the fund crunch in the sector.
R K Arora, Chairman, Supertech Limited.
Unlike in the past so many years, the year 2015 is a year gifted with a stable Government at Centre which is pledged to be investor-friendly and is greatly focused on development. The Government has already come up with policy easing the terms of Foreign Direct Investment in Construction which is likely to bring in more investment in real estate.
The second positive development that is likely to increase demand in real estate is easing of crude oil price in international markets which is likely to translate into better GDP in the country, creation of more jobs and also reduction in interest rates all of which are likely to give more money in the hands of potential buyers and investors in real estate. Both these developments are likely to improve demand and supply in real estate.
