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Building the road to recovery

The clouds of slowdown hanging over the Indian real estate sector are slowly lifting as indicated by different Q1 trend reports released over the past few weeks.

Building the road to recovery

Resurging realty: With developers focusing on completing under-construction projects, prospective homebuyers have a bouquet of ready-to-move-in choices Tribune photo



Geetu Vaid

The clouds of slowdown hanging over the Indian real estate sector are slowly lifting as indicated by different Q1 trend reports released over the past few weeks.  Leading real estate consulting firm CBRE South Asia Pvt. Ltd., has projected a positive outlook for the sector in 2017 in its Asia Pacific Real Estate Market Outlook 2017 — India. Commenting on the buoyancy in the sector, Anshuman Magazine, Chairman, India and South East Asia, CBRE said, “With 2016 being the year of landmark decisions for the Indian real estate industry, the sector saw concerted efforts by the government to bring in transparency as well as boost consumer sentiment, especially in the residential market. The outlook for 2017 is positive with an expectancy of steady growth, stability and revival in the market.”

The findings of  Real Estate Sentiment Index for Q1-2017 released by FICCI-NAREDCO-Knight Frank India also signal a recovery for the realty sector. “After the drastic dip in sentiment from October-December 2016, the first quarter of 2017  began on a positive note, signifying the transient impact of demonetisation. Though the current score is positive, it is only slightly above the threshold mark corroborating that the ‘wait-and-watch mode’ is still prevalent among the stakeholders”, says  Samantak Das, Chief Economist & National Director, Research, Knight Frank India while commenting on the favourable winds blowing in the real estate realm. 

Demand-supply sync

While the number of new launches has shown a drop of 16 per cent with only 25,800 units being launched in top eight cities across the country in Q1, the market is not too upset over this. This is because the main reason for the drop in new launches is the developers’ extra focus on completing the existing projects in view of RERA implementation deadline. As a result the homebuyers have a bouquet of choices in the ready-to-move-in category. 

Slow demand movement and the rising levels of completed stocks entering the market have lead to rationalisation of demand and with end-user being the key market driver, at present the supply is in sync with what the buyers want to purchase.

What buyers want?

Government policies like Housing for All (HFA), Affordable Housing, CLSS and Pradhan Mantri Awas Yojana (PMAY), have made affordable housing the buzzword in the market. And one segment that is currently riding the affordable wave in the residential real estate market is the 900-1200 sq ft apartments. 

There has been a significant spike in demand for  apartments in this size category over the past few months in almost all the major realty destinations in the country.  

Properties in this category classify as MIG 1 and 2 under the government categorisation for credit linked subsidy scheme (CLSS) benefits. According to the Affordable Housing Policy Perspective —  2017 released by property site Magicbricks recently, this segment has accounted for more than 40 per cent of the demand in urban India in the January-March 2017 quarter. 

The report also stated that between the 300 and 450 sq ft, the latter was in greater demand and in both cases demand and supply were in sync. But apartments with a built-up size of 600 sq ft were found to be more popular than those of the smaller sizes. These accounted for a healthy 11 per cent demand across cities. The sizes of 1350-1500 sq ft  accounted for about 14 per cent of demand.

End users looking to strike a balance between amenities, luxury and affordability prefer 2BHK apartments  and the price range of Rs 3,000 to Rs 6,000 per sq ft. According to Housing.com’s buyer preference trends more than 40 per cent of homebuyers in Delhi, Bangalore, Chennai and Kolkata prefer to invest in 2BHK apartments in the Rs 40 to Rs 50 lakh range. 

In Mumbai, 51 per cent homebuyers prefer 1 BHK due to high property prices. With around 20 per cent buyers going in for 3BHK units, this category is the next most preferred configuration in Delhi-NCR, Bangalore, Chennai and Kolkata. Data from Housing.com reveals that only 6 per cent homebuyers prefer 3BHK in Mumbai stating affordability as the major concern in the region. The Gurgaon market is an aberration where the most supplied categories were sizes 1500-1650 sq ft, with the 3 BHK topping the chart.

One of the key markets in NCR, Gurgaon has maximum demand for 1000 sq ft and the next was 1350 sq ft. This preference for larger units is linked to the purchasing capacity of professionals living and working in the city.

Thus, the first half of 2017 has prepared the pitch for affordable housing with buyer s beoming clear about their preferences. And with the sector on the threshold of a revival affordable housing is going to be the winning mantra in future. 


5 realty apps to check out

No-broker.com: The application helps in eliminating the middlemen or brokers, and helps customers to search for houses on their own. The buyers can directly connect with the flat owners using map based search offer in order to increase the supply. No broker is the right platform to avail benefits like customer customized online rental agreements, validation checks and cost efficient properties.

Nestaway: It is an online platform or a bazaar where landlords of fully furnished houses provide rent to pre-verified tenants. The aim of the company is to provide rented flats to youngsters or working class who are looking for a place to live in a new city. The co-founders Jitendra Jagadev, Smruti Parida, Amarendra Sahu, and Deepak Dhar have received funding from Flipkart and Tiger Global.

99 Acres: It’s a property portal which has a list of total eight lakh rented or commercial properties. The ‘Trending Project’ feature enlists the real estate projects that are popular among the youngsters and are receiving maximum consumer interests. The ‘price list’ calculator in the project  helps in providing price differences of the houses located at different locations, for example the prices may differ from a front facing house to the one at the 14th floor.

Commonfloor: A Bangalore-based venture co-founded by two IITians and a VTU graduate in May 2007. The website provides property decisions in a simplified manner for all the sellers, buyers and brokers. Features like extensive search options, reviews on locality and property, verified listings and innovative management tools further helps the business to grow.

 

Ghar360: It’s a unique 3D digital platform where customers can enter the house using 3D appearances like IGI and counterstrike games. The company was co-founded by Ajesh Joy and Sanju Thomas. — ANI

 

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