This New Year, developers are hoping for an optimistic future for real estate segment with the government’s plan to give realty sector an industry status and favourable policies, after a long wait. The government had instigated certain policies in favour of real estate industry at the end of 2012, and this current year will witness many of such favourable government policies being implemented. Few of these policies are the most awaited real estate regulatory bill, the real estate investment trusts (REITs), the real estate mutual funds (REMFs), likely to get introduced this year; and the Land Acquisition and Rehabilitation and Resettlement Bill.
Several market experts believe that this New Year will bring changes that will help real estate industry to revive. In India the residential real estate sector will witness a new trend when the proposed Real Estate Investment Trusts (REITs) will allow investments in rental housing. It means the structure of this policy is expected to drive the investors demand for housing mainly in prime cities in India. Moreover, from past two years, the country is witnessing a trend where the absorption rate for volumes under the range of 2000-3000 a square feet was more. And, this year, the range is likely to increase a bit to 3000-Rs5000 a square feet in the midst of high inflation and soaring construction costs.
Office space absorption
In 2013, the rate of absorption for office space is expected to be the same like last year. This year, the hunt for office space in prime locations is likely to rise and these office spaces will fetch premium revenues. Rental amount may also witness a stiff rise due to less project launches.
Delhi real estate
The capital city is witnessing most of the real estate absorption in areas like Gurgaon and Noida. Also, Dwarka Expressway and Noida Extension in Delhi-NCR are showing the most promising when it comes to property investment. Noida Extension has emerged as one of the best location to invest in residential segment as the housing prices are likely to jump by 111 percent during 2012-2017. Property prices might shot upto 6760 per square feet from 3200 per square feet, which is the existing rate currently. Since 2010, Noida Extension has witnessed the launch of more than 80,000 residential units.
With the price appreciation of 108 percent during 2012-2017, Dwarka Expressway is emerging as a new residential belt. This Expressway will improve the connectivity between Delhi and Gurgaon, making the real estate boom in this area. According to the report, since 2007, total of 12,649 residential units were launched along the Dwarka Expressway stretch.
In 2013, Mumbai will witness healthy demand for housing as well as office space. Less chance for price correction in Mumbai but the city is expected to get new residential launches this year. The financial capital is one among the largest traditional real estate market in India. In Mumbai, places like Wadala and Chembur are emerging as the most promising investment destination. These places are witnessing maximum growth in real estate movement because of close proximity to premium office space markets, strategic location and proposed infrastructure projects like Eastern Freeway project and Monorail. It is expected that the upcoming projects will increase the housing demand in these places in the near future.
When it comes to office space, Outer Ring Road will remain the most preferred localities for office space in 2013. "Meanwhile, Whitefield will continue to retain its sheen for both office and residential real estate because of affordability, proximity to key work places and good social infrastructure," said Ashutosh Limaye - Head - Research & Real Estate Intelligence Service, Jones Lang LaSalle India, reports Economic Times.
"Bangalore is primarily driven by IT/ITeS segment, which has been growing consistently," said Gaurav Pandey, senior vice president, PropEquity Research & Consulting.
"Bangalore property market has done reasonably better than other major cities of India, such as National Capital Region (NCR) or Mumbai Metropolitan Region (MMR) during the last year," added Pandey.
Also Read: India's 7 Attractive Property Investment Hotspots In 2013
Real Estate in other cities
In 2013, Chennai is expected to see slowdown; however, the city has witnessed immense number of residential launches last year. This scenario is likely to continue for Pune as well. On the other hand, metros like Hyderabad and Kolkata are expected to see more number of new residential launches. Property prices may increase further due to the hike in construction costs. Other cities like Bhubaneswar, Ahmedabad, Kochi and Coimbatore to witness more real estate movements in 2013.