The quality of residential construction has improved as there is greater competition. Indian homes have become cheaper in recent times. The real estate sector has fared well so far this year compared with last year, said Anshuman Magazine, Chairman, India and South East Asia, CBRE, a real estate consulting firm, when BusinessLine caught up with him on the sidelines of 14th CII Conferemce on Real Estate ‘Challenges to Opportunites’ here. Excerpts:
How has this year been for the real estate sector so far?
Today, the market has matured and residential sales are picking up. There are more supplies coming up in the affordable category and there has been an increase in the number of end-users who are buying property. Office spaces have also started doing well. Also, due to e-commerce, manufacturing and retail, there has been a significant increase in warehousing segment. Having said that, there is a need to change the way we measure the market from how we used to a decade ago.
Have the prices of residential properties come down recently ?
In the secondary market of the major cities, the prices of the residential properties have come down. In the primary market, the prices remained unchanged in the past two years. So, in a way, it has become cheaper there too. In the affordable housing segment, the supply is finally catching up with the demand which wasn’t the case two years back.
What are the upcoming trends that the sector is going to witness?
In the residential market, there has been an increase in competition which has been really good for the consumer. Quality of housing has improved due to this and this has also led to an improvement in services. And this trend is going to stay.
What is the status of shopping centres and malls in India?
A rise in the number of shopping malls is expected in the coming years as we are under-supplied. However, a lot of malls are still struggling and some have even shut down. This could be attributed to lower purchasing power of consumers in India. Till the time per capita income increases in India, the purchasing power in India would not go up, be it retail, housing and other segments. The upcoming malls will have to focus on the demand of that market. So the model of a mall in South Delhi would be different from that in Ranchi.
What are the challenges the real estate sector is facing?
One of the main challenges is how to accelerate infrastructure at a faster pace. If infrastructure improves significantly, commuting can be easier and thus help bring places closer. This in a way reduce land prices as urban space currently is very expensive. With this high price of land it is difficult to deliver affordable housing as well as affordable office and retail space. Another challenge is going to be digitisation of land records.