Real Estate Sector Poised for Growth in 2013
The year 2013 is anticipated to be a period of economic expansion, with particularly high expectations for the real estate sector. The real estate industry is predicted to experience considerable growth during this time.
Challenges Faced in 2012
The real estate sector encountered significant difficulties in 2012. The year was characterized by a sluggish market and decreased activity. Reduced sales and increased construction costs negatively impacted real estate developers. Overall, 2012 was a tough year for Indian real estate developers, who faced challenging economic conditions due to declining sales.
Industry Perspectives on Recovery
Lalit Kumar Jain, the National Head of the Confederation of Real Estate Developers’ Associations of India (CREDAI), voiced optimism about a recovery in 2013. He noted that 2012 was a year of lost opportunities due to the absence of corrective measures. He lamented that the year 2012 stands as a missed opportunity for progress.
Anuj Puri, Chairman & Country Head of Jones Lang LaSalle India, expressed greater confidence in the real estate sector's revitalization. He foresees a significant real estate boom in the latter half of 2013.
RBI's Initiatives to Boost Funding
The Reserve Bank of India (RBI) has recently allowed established real estate developers to raise up to $1 billion in funds. Additionally, the RBI has authorized reputable housing finance companies to raise a similar amount. This new regulation enables both real estate developers and finance companies to secure funding through external commercial borrowings.
Market Trends in Key Cities
Apartments priced between Rs.4,000 and Rs.5,500 per sq. ft. experienced high sales in areas such as Noida and Navi Mumbai. Similarly priced apartments were also in high demand and sold well in Bangalore. In Central Mumbai, housing units priced between Rs.16,000 and Rs.19,000 per sq. ft. also saw significant demand.
Impact of FDI and Policy Reforms
Knight Frank India’s Chairman, Pranab Dutta, suggests that foreign direct investment (FDI) in retail will be crucial for real estate development in 2013. He added that this would stimulate demand for commercial spaces.
Expectations from Regulatory Bills
The real estate sector anticipates benefits from the Real Estate Regulation Bill and the Land Acquisition Bill in the coming year. However, many developers believe that a single-window clearance system is essential for timely project completion. Puravankara Projects Group CEO, Jackbastian Nazareth, predicts that the primary growth will occur in the second half of 2013 and emphasized the importance of correcting interest rates for the benefit of the common man.
