The effects of real estate slowdown had started to be seen at the turn of this decade. The full blown impact was witnessed 2011 onwards and continued for a couple of years. The situation of Indian economy also had deteriorated in the meantime and the sum total of the global slowdown, increased interest rates and high inflation caused the property sector of India to bottom out.
Highlights of Slowdown in 2016
Numerous projects across the country were closed down as a result. Sales reduced to a trickle and builders started to focus away from the prime markets of the country. However 2016 turned out to be the year when all stake holders expected a change. The year started with increased sales in many territories; with Bangalore and Mumbai at the helm. The formation of a stable central government came as a huge relief, but RBI soon declared that inflation was still not under control.
Another blow came in the form of slow Diwali season sales. These sales were lesser than the sales of the previous year. Soon the markets came to a standstill and the investors held back waiting for changes to occur. The government relaxed the FDI norms to alleviate the property sector from its plight but not much happened after which and the investors waited still.
How is the property sector buoyant still?
Indian real estate market has received an investment of $4.5 billion from the period of January to September this year. 60% of this investment has gone into land and plot development. A significant portion of the total investment is focussed on Mumbai. Delhi and Bangalore are next in line.
These details were released by the CBRE recently and they clearly exhibit the improved sentiment of investors. It must be noted that all the recipient territories are big ticket markets and hence one has not witnessed a rise in sales in these areas so far( Bangalore being an exception).
Ever since the government has relaxed the FDI norms, big investors have not alighted to exhibit their interest. The reason is that striking such deals easily takes six to twelve months and the changes would be seen only in the following year. Properties on sale in Hyderabad and Kolkata are set to witness a big boost. Most of the territories down south have already shown signs of recovery with a boost in their sales online. Bangalore has received half of the aforementioned investment for the development of commercial spaces.
The Hyderabad real estate is also expected to see a major boost in sales in the coming year primarily because of the improving economic situation of the country as a whole. With greater purchasing power and higher disposable income, the real estate sales of the city are set to bounce back.
Just to be clear, the investment of $4.5 billion is in contrast with $3.1 billion in 2012-13 to $1.3 billion in 2014-15 and $1.2 billion in 2015-16.
Hyderabad Scenario in Detail
If some reports are to be believed Hyderabad is the most economical city to seek property in. Rentals in the city are amongst the cheapest in the country. However new villas for sale in Hyderabad are priced at par with similar properties in most other metropolitans because they are available in the newer parts of the city (Gachibowli, Hitech City etc.). The prime properties in the city, its original bungalows are not readily available for sale.
Finding an is easy however the purchase of one becomes difficult as the realty markets improve and the city sees appreciation in prices in times to come.