The rollercoaster ride that Indian real estate was on will not see the same exhilarating twists and turns for some time to come, says a note from JLL India, titled Indian Real Estate – Looking back… And Forward.
The onus from now on will be on affordable housing and mid-income housing in the residential sector, efficient buildings – in terms of both energy consumption and space utility, at infrastructure serviced locations in the office sector and well-researched expansion plans in the retail sector. The present market vagaries have force-fed transparency into Indian real estate.
The current market dynamics have served the purpose of bringing about a renaissance in the Indian real estate sector, says the note. Realistic retail and commercial spaces which are in tune with actual market demand dynamics are now becoming a reality. In the residential space, developers who had previously focused largely on luxury spaces for the cash-rich IT/ITeS and HNI buyer segments, have begun launching housing projects for the common man.
“Granted, this dynamic is a fluid one which is primarily influenced by the overall performance of the economy. In other words, developers have in the past reacted to upward movements by diluting their focus on affordable housing and going back to higher-priced formats and offerings. However, the incumbent government's determined drive towards 'Housing for All by 2022' has made its mark with several new incentives for developers and buyers of budget housing. This will ensure that a good cross-section of Indian builders will retain their focus on affordable housing and mid-income housing for at least a few more years,” says Anuj Puri, Chairman & Country Head, JLL India.
He added: “Even today, the dominant trend in India is a huge demand-supply mismatch in the housing sector. This would indicate that residential property prices will rise again – and we are indeed witnessing the first signs of this happening already. The corrections that have taken place in overheated cities were required, since developers had priced themselves out of the market. The fact that the slowdown forced them to rationalise their rates has been working to the developers' advantage, and one would have assumed that the recent market dynamics had delivered a clear and unequivocal message.”