Will Indian Real Estate See Positive Turnaround In The Year 2015?

While Indian real estate witnessed steady growth in year 2014, the market is rife with speculation whether it will see positive turnaround in 2015 in terms of growth and expansion. This article explores some of the finer points indicating how volatile real estate of India will react in 2015 and what it has in store for real estate developers and home buyers across the nation.

Status of Indian Realty in 2014:

In 2014, the Indian real estate sectors influenced business sentiments of the market due to price hike in commercial properties and upsurge in the demand of residential buildings. In the same year, Indian government announced various policies and measures aiming to reinforce Indian realty sectors.

For instance, the government announced amendment to the ordinance regarding land acquisition laws to simplify land acquisition procedures hampered by prevailing consent clause. The final upshot of the announcement is that it will expedite construction works of various projects in future, as absence of consent clause will streamline land acquisition process for builders and they will be able to complete their projects faster. It will also help Indian government to accomplish its dream, "Home for all by 2022".

Once implemented, the relaxed norms on land acquisition laws will boost up expansion of Indian realty. In addition, various multinational companies entered into Indian realty on the prospectus of earning much, as the country's realty sectors offer wide spectrum of growth and income opportunities. Also, some recruitment agencies predicted that there will be multiple job opportunities in Information Technologies and other sectors in the country, which will spell expansion of Indian realty in 2015. Why? Well, the job creations will strengthen people financially and they will be able to afford luxury housing in days to come.

Explaining consent clause

According to consent clause, real estate players have to seek permission from the landlords to use their lands for construction of their (realty players) housing projects. As a result, the builders suffered huge loss, as landlords delayed in granting approval. Consequently, builders had to pay penalty to buyers, as they failed to deliver housing projects on time because of the delayed approval in land acquisition.

Indian Realty 2015: Turnaround Possibility

The formation of new government in India on 2014, and reformative policies and measures that it announced later have encouraged the sentiments of Indian realty with feel good factors. For instance, Reserve Bank of India declared incentives aiming to boost up infrastructure funding and keep the realty sectors afloat with enthusiasm. Further, the government declared that it will standardize norms on FDI (Foreign Direct Investment) in Indian realty, which, if implemented, will drive cross-border investment and boost realty sectors financially.

They are the factors that will determine in what way Indian realty sectors will be influenced in 2015:

Stable inflation - This is one of the most notable factors signaling positive growth of Indian realty. Considering that higher inflation contributes slump in real estate, this time, Indian realty sectors do not have to face ominous inflation hike on properties. Hence, the prices of properties across the country will not hike, which will boost up sales volume of the properties in the country.

Moreover, RBI (Reserve Bank Of India) is expected to decrease its repo rate. If it happens, there will be easy EMI offerings from the banks to home buyers on their dream properties. Even fence-sitting buyers, who have been waiting for price fall on properties, will buy their dream homes on easy EMI payout from their lending banks. As a matter of fact, lower lending rates will be a win-win situation for both the buyers and builders. Builders will be able to sell out their projects to buyers and the buyers will avail homes at a lower EMI payout.

The Indian realty sectors are undergoing re-orientation phase. For instance, builders concentrate on development of low-cost housing projects for the customers coming from middle class families. However, there has also been development of luxury buildings/villas on a large scale to serve the purpose of buyers seeking a relatively more comfortable, lavish and premium dwelling place.

Key Reasons Indicating Positive Turnaround Of Indian Realty In 2015

According to the report by National Housing Bank (NHB), real estate is one of the key factors behind employment generation. Also, the overall contribution of realty industries in the development of schools, townships, residential apartments, hospitals and other residential segments, dominate market share. Manufacturing industries are directly influenced by real estate, and more than 35 million workforces are employed by real estate industries. They indicate that Indian realty is full of potential to afford desirable growth and can influence investors a lot.

The new government of India made realty market visibly enthusiastic. As expected, the government took proactive approach and tried to instill business confidence among investors, builders and buyers by announcing various reformative policies, such as relaxed FDI norms and easy policies on land acquisition laws.

Well-known agencies including World Bank, Moody and IMF ฝากขายอาคารพาณิชย์ predicted that India's GDP growth will increase by 6.3 to 6.4%. As a result, it will enable market sentiment edge further. Also, depleting value of Indian rupee on international market, improving export and flexible land acquisition laws in India will empower real estate of the country in 2015. Recently, the country witnessed increased consumption in the commercial properties by foreign companies in the year 2014. This is important turnaround despite the economy slowdown of the country in the year 2014.