Realty Roadmap
I have been closely observing the realty markets and take this opportunity in exploring the demand supply economics within the catalytic effect of the economy. At the end, I will also analyse the dark clouds and the silver lining in the real estate sector
India Liberalised in 1991. It took a few years before the world realised the opportunity in the Indian Economy. Well, it may all be attributed to the emergence of outsourcing in 2000. With the well known fact that India has the advantage of Manpower, the opportunity was a billion fold, a billion people striving towards three basic necessities, ?“Roti, Kapda aur Makaan?” and a job. If we recall the headlines in the past few years, all we may remember are MNCs setting up offices in India, Outsourcing for various sectors and emergence of a knowledge economy. Retail, IT, Engineering, Financial, Media display an impressive growth. Global interest in India has sustained. The moment I say a new MNC in India, the first step is an office setup. Thus, realty occupancy. This corresponds to an increasing demand in commercial estate. This attracted a lot of Developers in the commercial sector.
The epiphenomenon of a booming economy was seen on spiralling incomes. Today, the average age of new homeowner is 32 as compared to 45 a decade ago. Increasing monthly income and loans available at cheaper rates has induced middle class with a hope to own a house. There has been a change of attitude from ?‘save and buy?’ to ?‘buy and repay?’. There is an expected demand for over 24.3 million new dwellings for self-living in urban India alone by 2015. Chances are that the realty sector will sustain the growth basis the demand generated for self-living.
Let?’s observe how many cities gained the attention of the world with the IT outsourcing boom Bangalore, Gurgaon, Jaipur, Mysore, Coimbatore,Chennai property are just some of the cities that have seen heavy realty investment and massive development. However the larger effect may still be a little under wraps. The manpower that moved out of the sub urban areas to work in these cities, started investing in homes, not only in these places, but also in cities where they belonged. While we only see the housing development in the metros and mini metros, there is development happening in pockets of India. Today the flat culture has made inroads in
In hindsight, I do believe that the contribution of the Government was enormous in building attractiveness to a lot of sectors including IT, Retail and Realty. You may look at specific cases like Bangalore, Hyderabad, Gujarat where the Government was proactive in its efforts to attract investments. Thus pushing the growth of jobs and commercial and residential demand in turn.
The current situation seems dull. The oil prices have had their impact on various sectors. Inflation has jumped up across economies impacting consumption. Besides, that India has also been hugely impacted by the interest rates. Thus making home loans a difficult option. Asia Pacific has had its share of the slowing demand and thus people are exercising the fallback option on rent. But the demand for houses in the range of 30 lakhs to 80 lakhs has a lot of takers as the incomes are continuing to grow at a good rate. Thus, the Indian real estate sector will continue to be the Goldmine for the investor as well as the developer.
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