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Realty 2012: Optimistic or Pessimistic?

By SiliconIndia  |   Monday, 02 January 2012, 04:26 Hrs
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real estate industry of 2012


Bangalore: Owning a property is a major investment for Indians. The market is experiencing sluggish economic growth yet there are movements in real estate industry. With the end of 2011, People are eagerly waiting to know the real estate market of the Year 2012. Previous year, the demand and supply market was consistently low on record which is why it is now a big question whether the New Year market will bring boon or hindrance?



Prominent people and real estate analysts have expressed their viewpoints towards the market of 2012:



Irfan Razack of Prestige Group has been observed that 2011 was consistently good and beneficial for the real estate industry in Bangalore. The Garden city holds a stable realty market in residential sector when India is facing poor growth in Global finance. It is expected that the market of 2012 would be optimistic.



According to a real estate analyst, Akshit Shah of SBI Cap Securities, Bangalore is an IT city and majority of people are IT professionals which is the sole reason for steady real estate market. The exact time realty market goes up is when the IT companies hike salaries adding bonuses to it.



Sachin Sandhir, MD, RICS South Asia, spoke about how 2010 treated the real estate sector. The year was stable for real estate and there was a good balance between the execution of projects and the new launched projects. However in 2011, the rate of construction was low compared to 2010 and the developers had to come across many hurdles like political insecurities, issues related to land acquisitions, limited funds, hike in construction price, and delay in projects clearance. The increase in interest rates is also a major cause of concern which has been affecting the sentiments of the developers.



As the interest rates are touching the sky, and apparently cost of home loans becoming extremely expensive which results in unsold houses in metros like Mumbai and Delhi-NCR. But, the South market remains constant compared to other metros. Largely, in 2012, the market is expected to be positive. The rate of absorption will remain low as of less projects are coming up and with the high inflation RBI may review the rising interest rates on residential segment.



Neville Vaswani, MD, Vaswani Group, said that even with the rise and fall in 2011, Bangalore compared to other metros holds a positive market in the residential sector because of its IT companies and the major buyers being IT professionals. The New Year will bring many challenges for people related to real estate without affecting the upcoming projects. It is expected that year ahead would bring good luck for the real estate segment with less variation in the market and the Government will come forward with better measures to control the economy. If the economy becomes stable, the investors and buyers will regain the lost confidence in the real estate industry.



According to the survey conducted by Makaan.com, a real estate portal, the real estate market did not flourish in 2011. Property business has come down by 20 t0 40 percent in major cities in the same year. With high Interest rates and pricey property, the buyers did not show much movements in real estate market.



Throughout the year 2011, Real estate segment has suffered a lot. The uncertainty in the market aroused tension and fear within real estate players.  As per Jasuja of PropEquity, the residential segment and the new project launches will remain low in 2012 and the real estate developers will concentrate more on their on-going projects to execute them properly within time.



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