Tag Archives: Diipesh Bhagtani

Market stagnant but no bubble scenario

Posted on by Track2Realty

By: Diipesh Bhagtani, Executive Director, Jaycee Homes

Diipesh Bhagtani, Executive Director, Jaycee Homes, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Is the residential real estate market in India facing a bubble? A bubble implies that there is a lot of absorption and therefore a lot of development happening, and that prices are rising in tandem up to a point where nobody is buying anymore. That is not the case in India.

Supply in the market has already been constrained because of various factors such as low absorption, higher costs of development and borrowing, and so on. I do not see a bubble happening in the residential real estate market in India.

In terms of the segment of housing in demand in the year ahead, I feel demand for luxury homes is slated to rise exponentially in time to come. Modern homes pack a lot of features to meet the growing aspirations of people who want their houses to reflect their social and financial standing.

A number of projects in the premium and luxury residential segment have been conceptualised and successfully marketed over the past few years.

Developers are promoting modern living spaces with a mix of technology and exclusivity. The luxury residential property market is growing rapidly. It is attracting not only domestic developers but also foreign investors.

Luxury homes come as apartments, penthouses, sub-urban villas and bungalows, and are often close to a golf course or a green expanse.

Some time ago, address used to be the main thing while buying a premium house. While location continues to be a key factor, branded residences are an emerging concept wherein developers tie up with international luxury hospitality or lifestyle brands, even celebrities.

Developers are also focusing on creating intelligent living spaces through latest gadgets and technology. Digital locks, electronic surveillance systems, temperature control, wireless communication for Internet and in-house entertainment are common in most luxury homes.

Developers are using systems with sensors to enable residents to control ambience, light and temperature, among other things, through pre-programmed machines. These homes are intelligent enough to sense human presence and accordingly adjust light and temperature.

Currently, the luxury residential market is going through a phase of slow demand. This offers buyers an opportunity to negotiate. In the short term, no price appreciation is expected, but the value of luxury homes will increase significantly in the next few years.

Stress at company level, not project level will define residential market

Posted on by Track2Realty

By: Diipesh Bhagtani, Executive Director, Jaycee Homes

Diipesh Bhagtani, Executive Director, Jaycee Homes, India real estate news, Indian realty news, Property new, Home, Policy Advocacy, Activism, Mall, Retail, Office space, SEZ, IT/ITeS, Residential, Commercial, Hospitality, Project, Location, Regulation, FDI, Taxation, Investment, Banking, Property Management, Ravi Sinha, Track2Media, Track2RealtyTrack2Realty Exclusive: Indian real estate sector, especially the residential property segment, has been undergoing a tough period since the start of 2012. A host of challenges such as expensiveness of liquidity for real estate, lack of availability of serviced urban land, continuing procedural delays in approvals, slow pace of infrastructural growth and the fact that the country still has relatively low transparency in real estate terms, has affected the sector.

The Indian residential property market has sung from one spectrum to another in 2012. Developers hope the now onwards there will be more positivity to the sector.

In terms of residential real estate, the metropolitan cities such as Mumbai and NCR have emerged as chartbusters. In these cities, residential rates have already crossed and surpassed the peak levels.

However, the inherent demand for residential properties in these cities is very high and supply is constrained. There have been many launches of late, and developers’ input costs have gone up, reducing profit margins.

The residential prices in Mumbai and NCR are not likely to fall ahead. On a more general note, there is a possibility in residential corrections in tier II and tier III cities, depending on the level of stress project developers are under at a company level, rather than at a project level.

When it comes to projects, there is a likelihood of price rationalisations in large townships in the extended suburbs, because absorption of residential spaces takes much longer in such projects.

Timely completion of projects would be a major issue in the year ahead as this has been one of the fundamental reasons of liquidity crunch in the sector.

Moreover, residential market will see less of demand-supply mismatch with the new launches in 2013 and while metro cities will command high end projects, affordable housing will gain momentum in the satellite towns and periphery locations. Dynamics of tier-II and III cities will be dependent on the overall economic activity in the given micro market.

Demand for residential real estate is indirectly related to the global economic fluctuations. Residential property market derives from consumer demand, which again is covered by domestic factors such as high inflation and policy changes.

If home buyers’ salaries are not revised upwards or remain stagnant, there will be a reduction in consumption power, which will have an impact on the residential real estate market in India.