Realty Sector to Witness Healthy Growth in 2014

After a long period of slump in the country’s real estate sector, the markets are slowly making a come-back this year. While some macro markets performed poorly last year, others outperformed expectations. Most of these markets included tier-II and III cities. Overall the real estate market across the country remained stable in 2013. With the union budget coming up this year and other supporting factors, the real estate market may start showing signs of full recovery.

Reality sector has a positive outlook

There are several positive indicators that show a possible recovery of the real estate sector. One of these are the projects that are nearing completion this year and the availability of the most sought-after ready-to-move-in apartments across the country. There are various cities that are attracting buyers as well as developers due to the ongoing development of the infrastructure such as monorail, metro, flyovers and ring roads. Some of these real estate markets include Bengaluru, NCR, Ahmedabad, Chennai and smaller cities such as Lucknow, Chandigarhand Indore.

Interestingly, despite the sky-rocketing prices in Mumbai and Delhi and rising property prices by at least 50% by last year, the markets saw either slightly negative or stable growth. These markets did, however, perform lesser than other cities such as Bengaluru, Kolkata and Chennai.

Predictions for 2014

Real estate consultants and experts opine that overall, residential markets across the country will witness stable capital values except for those that are over leveraged and are unable to attract sales. These markets may expect some price corrections or slow movement. Some of these localities include micro-markets of Mumbai and NCR. Though the first half of the year is expected to have negligible improvements, the real estate market is expected to significantly improve post elections, during the second half of 2014.

Important factors that are keeping the hopes high for the real estate players include anticipation of a stable government, favourable government policies after the general elections and reasonably priced projects focused on the middle-class segment in good locations. Apart from location, good connectivity, social infrastructure and reasonable prices will be key points a buyer will be focusing on. The previous year taught several developers and buyers to be more realistic about property prices, owing to the huge inventory pile up. Hence, one can look forward to more reasonably priced projects in the coming times.

Areas that attract buyers

Several areas are expected to attract end-users as well as investors. These include some already well performing markets as well as newly emerging markets in the tier-II and tier-III cities. For example, Bengaluru remains a favourite amongst investors in the present conditions. A consistently growing infrastructure and decently high inventory level in the city will help buyers secure attractive deals. Kolkata, Chennai and Pune are other cities that are doing well in terms of absorption of projects. Emerging markets include cities such as New Chandigarh,Coimbatore, Indore and Kochi. These cities attract investors majorly due to the low property values compared to the tier-I cities, improving infrastructure and good connectivity to tier-I cities.

In the end, the verdict from the real estate experts is simple. Housing projects that are launched in good locations with good infrastructure and are reasonably priced will help in improving the real estate sector across the country. Since, several macro-markets are emerging that will cater to the buyer needs, the year ahead may look at positive trends in the realty sector.