Ever since the Securities and Exchange Board of India (SEBI) has cleared the fractional ownership framework for realty assets, there is an euphoria among the stakeholders. The built environment of Indian real estate that is always looking for new and exciting avenues to attract the investors. It has hence carried home the message that the “Next Big” investment basket has arrived. A Track2Realty report.
Puravankara Limited, (5th best Indian real estate brand as per Track2Realty BrandXReport 2022-23), has recorded a strong sales performance in 9MFY24 with a sales value of INR 3,967 crores, an increase of 89 per cent compared to INR 2,100 crores in 9MFY23.
Isn’t it ironic that in a country where the number of unsold housing units is skyrocketing, the business of real estate continues to be a seller’s market? Contrary to the developers’ influence peddling that the housing market is by and large a buyer’s market now, the fact lies that the developers continue to take the buyers for a ride. The developers’ exploitative practices are not limited to the delay of the project, but also default in delivering the promised amenities, and, most glaringly, with one-sided unfair contract. Track2Realty explains the options before the home buyers.
The quest for property has not subsided among the Indians; nor do they have any doubts over the appreciation potential of real asset. They still consider property the tangible asset class that is less prone to market volatility, compared to stock market and other avenues of investment. However, they need a bit of cushioning this festive season to take a plunge into the property market.
Indian real estate has historically been very optimistic on the eve of every festive season. The post festive season sales number may not back the pre-festive bullishness, but the sector has been known to be hoping to make merry year after year. After all, real estate is a sentiment driven business and the stakeholders try best to create an ambience of positivity to bring the fence sitting buyers back to the market, often with festive discounts and freebies.
Analysts tracking the market believe lease model is always easy and better in comparison to the sales model in commercial property. For a lessee it gives a strategic option of rethinking if it is not giving the desired outcome considering all different aspects and factors involved in any particular kind of business. For a developer also, it works as an indirect sales model where a developers can comfortably sale the lease area to an investor who can enjoy both the benefits of property appreciation as well as the lease money.
Isn’t it ironic that in a country where housing shortage is at the core of policy debates, housing surplus in top Indian cities is juxtaposed to that. As a matter of fact, the reality of unsold housing units poses an even greater degree of imbalance than the housing shortage. But then unsold inventory is a symptom and not the cause of malaise in the housing market of the country. A Track2Realty report.
The Indian economy grew at 7.8 per cent in the first quarter of the current fiscal year, according to the data shared by National Statistical Office. The Reserve Bank of India (RBI) retained its GDP growth forecast of 6.5 per cent for FY 2023-24. The real estate sector is expected to expand to $5.8 trillion by 2047, contributing 15.5 per cent to the GDP from an existing share of 7.3 per cent, a joint report by Knight Frank and National Real Estate Development Council (NAREDCO) indicates.
The input cost escalation has indeed brought the catch 22 situation for the real estate developers in this part of the world. As per the industry estimates, the input cost of various construction raw materials has surged from 20-35 per cent in the last 12-18 months. The property prices in the proportional ratio have not increased and in most of the micro markets across India the prices during the said period are at a standstill.
Ever since the beginning of the year 2023, the real estate industry stakeholders are going gaga with the narrative of a turnaround year. It is not that such misplaced optimism has not hurt their cause in the past, but the leading voices of the sector seem to believe that a false narrative would goad the home buyers to make a beeline at the sales office. The industry narrative is hence tilted towards what could easily be vouchsafed as misplaced optimism.