What's in Store for Real Estate Developers in 2012?

Bangalore: The demand and supply market is expected to be down in the year 2012. It seems that the New Year will bring unstable fortune for the developers in real state.  However in 2011, the rate of inflation and the interest rate was high which is why a wide gap has come up between consumers’ response to the market. And, high inflation is a major cause of concern for RBI and since March 2010, they have hiked their policy rate by 12 times.

It's been observed that, in some metro cities the property price was being controlled and in maximum projects, developers are compelled to give discounts on prices including many other giftlike to develop their sales more to the buyers.

Experts are expecting that in 2012, the market will be in favor of the buyers and the developers will focus more on their on-going projects then to come up with new one. "Project-specific price increases can be expected across all sub-markets, especially in projects that are being delivered or are nearing completion," said by Ashutosh Limaye, head (research), Jones Lang LaSalle India, a real estate consultancy. Also “we will see a slowdown in construction activity for some time. However, as demand improves, better sales will benefit developers, who will focus on the execution of their ongoing project portfolios”, he said, reports The Economic Times.

The reason behind the projects getting postponed and the developers being affected is because of less fund, hike in construction cost, increase in Interest rates and also issues related to land-acquisitions.

Pankaj Kapoor of Liases Foras, said that, "Another important development this year was the complete closure on the transaction through power of attorney. This should put an end to a lot of speculative transactions”, reports The Economic Times.

Changes may take place if draft Real Estate (Regulation & Development) Bill, 2011, comes under jurisdiction. To proceed with any project, the developers have to register with the authority and pass through the Law by submitting all the projects information on the authority’s website.