While Dalal Street had a party last year, the mood on realty street was a tad subdued. There was a tug-of-war between developers and buyers, felt in varying proportions across markets.
For instance, IT-driven demand helped the markets in Bengaluru and Pune. Markets such as Mumbai, where the roof was expected to cave in, instead saw improvements in prices and demand in the latter half of the year.
Overall, housing prices, based on the National Housing Bank’s Residex Index, increased 5 per cent in the April-June quarter of 2014, compared with a year ago. This is still better than the muted 2 per cent increase seen during 2013.
While the Budget measures were positive, high interest rates and economic slowdown dampened buyer sentiment in mid-income housing.
Neither did the luxury segment fare any better. Builders who put up upmarket properties had an uphill task selling them in most cities. Cash-strapped developers were left with large inventories.
Total unsold homes in most cities remained high compared with five-year average levels, based on data from real estate consultancy JLL. For example, Delhi-NCR has enough supply of completed homes to meet the demand for 35 months — nearly double the 18 months of average inventory seen in the past.
Home buyer activism increased, in general, with the courts also supporting their cause against DLF and Unitech. Even as the Real Estate Regulatory Bill was deferred yet again, other policy measures laid a firm foundation for the sector’s long-term growth.
Real Estate Investment Trust (REIT) regulations and the more lenient foreign direct investment (FDI) policy should help attract more investments.
Infra push
The Government’s push for infrastructure augurs well. The office property market beat the blues — data from global real estate consultancy Cushman & Wakefield shows space uptake increased by 36 per cent during the first nine months
2015: What lies ahead