2017: Industry Perspectives On The Year Ahead
All eyes are now on 2017 and there is positivity on cards. Here’s what the developers had to say:
Mayur Shah, MD, Marathon Realty, member-governing council- CREDAI on the Mumbai market
Factors that worked well in 2016
- The Municipal Corporation of Greater Mumbai took to promoting ease of doing business through single window clearances.
- The final clearance and commencement of work in Navi Mumbai International Airport
- Clearance of the Interim Development Plan for NAINA’s pilot project
- Formation of the Panvel Municipal Corporation which helped reduce the administrative burden on CIDCO and is set to become a key enabler for the sector.
“2017 will be a good year for the real estate sector. We expect that the sector will go through an accelerated growth phase with high sales volumes. This will be driven by key policy changes and more importantly, due to the large-scale investment of more than Rs 1 lakh crore in infrastructure that drives the city, such as the Metro Project as well as the Rs 17,500-crore investment alone in the Mumbai Trans Harbour Link,” adds Shah.
Also read: 5 Ways In Which MTHL Will Help Mumbai Rise
Irfan Razack – CMD, Prestige Group and Chairman- CREDAI
“The demand for housing will definitely pick up next year. The first phase of the Metro will be ready in Bengaluru by the first quarter of 2017. Construction for the second phase is also underway at a brisk pace. Hopefully Bengaluru, in the next few years, will have the Metro line covering around 150-160 kms, which will be a boon for the people. This infrastructure development will certainly help the traffic condition in the city. Moreover, the city is a cosmopolitan one… a melting pot of varying cultures and communities, with different people from all over the country as well as overseas, settled here. A robust public transport system will help the entire population mingle and further build the chemistry of the city.
The biggest driver in Bengaluru is the Metro. In addition, the new law in TDR will be announced shortly, which will also help in getting more area to developers.”
Satish Magar, MD, Magarpatta Township Development & Construction Co. Ltd, VP West – CREDAI on Pune market
“The biggest driver for real estate in Pune was the services sector. It has helped boost end user consumption and by extension has also improved investor sentiment in the city’s real estate.
Pune will see good growth in the real estate sector in 2017. We will see greater investment in the sector as well as a considerable interest of investors in the city. Instruments such as REITs will help mobilise institutional investment, especially in the commercial segment.”
Suresh Hari, Partner at Vishal Promoters and Builders and Secretary, CREDAI Bengaluru on Bengaluru market
“Real estate regulation act was one of the longstanding need of the industry. Rules are being framed and the coming year will be the change maker year for the industry. The adoption of GST and anticipated implementation will be the additional action point. After the cycle of peace demand, the industry went through the period of price stabilisation. What we see now is the best price one can expect from the cost of input increasing very rapidly. In 2017 we expect gradual demand pick. With anticipated money flow into the banking system being deployed to infrastructure, real estate is the automatic beneficiary.”
M Murali, Managing Director, Shriram Properties
“The transitional slowdown in demand which we witness as an aftermath of series of reforms has nothing to do with the huge pent-up demand for housing in India. This lull phase is only temporary and will vanish soon. In 2017, the primary sales market, especially across larger cities, will go up as real estate prices have already bottomed out and stabilised in these cities with no scope or very minimum chance of further coming down. Fence sitters who had deferred their decision expecting further fall in prices have already understood the reality and have started coming back at least in the case of credible and established long term players that have a brand value.
It is imminent that with the moves by the Government like demonetisation and digital economy the unorganised and the less organised segment of real estate sector like any other trade and services with high cash economy will be altogether wiped out in due course - vacating the place only to the existing and the new reputed developers who have good practices. This will naturally create a ‘Demand High’ ‘Supply Less’ situation, more particularly in mid-market and affordable housing segment - given less number of players on the ground. Home buyers should realise this aspect and understand that “pricing” is a critical factor in the current market scenario and no player will lose the chance to offer the best possible price in order to secure his business. Therefore, the present time is extremely favourable to home buyers to make their move to secure the best real estate bargains. They should make the hay while the sun shines instead of repenting later in terms of price and choice.
Buyers are going to have the best time in 2017. With surplus liquidity and lower cost of funds for the banks, lending rates by commercial banks will come down which is good for the sector. Banks may further relax their margin requirement stipulations for the home loans. Home buyers will find it easy go in for Housing loans. Consequently, demand for housing will go up.
As to office and commercial real estate’s year 2017 holds a bright future. Going by the present trend, good connectivity, existing physical and social infrastructure in the area, availability of campus style office spaces will be determinants of the demand, rents and capital values.
Overall, accelerated by the present measures by the Government Indian Real estate sector will surely witness a healthy growth with growing demand in the year 2017 with organised, reputed, credible players on the ground.”