India has always been labelled as a ‘reluctant urbanizer’. The percentage of the population living in urban areas in 2001 was estimated to be at 28%. Despite the explosive growth of cities like Mumbai, Delhi, Bangalore and Pune, the percentage of people moving to the urban centres did not cross 31% mark in 2011. Nevertheless, there is a rising anticipation across the nation that in the next decade or so, the rate of urbanization will rise massively in India.
In a slow real estate market, selling a house can be a daunting task. Nevertheless, selling a property is sometimes necessary or desirable despite market circumstances – for instance, when the home’s mortgage value is higher than its market worth, if one has purchased another house and faces difficulties in paying two mortgages, if one wants to upgrade to a bigger and better house or if there is a need to downsize. Other circumstances such as job relocation and family issues can also necessitate the sale of one’s home – with an express need for a quick sale.
Given the policy paralysis witnessed during the last two financial year (FY2012-13 and FY2013-14), GDP growth was recorded below 5.0% y/y during both years. Overcapacity in the critical mining and manufacturing sectors reduced the crucial supplies needed by various industries. As a result, a deadly combination of high inflation and falling consumption eventually stunted growth until early 2014. However, since the last two quarters, things have turned around.
In a market still defined by significant lack of transparency, real estate consultancies play a complex and responsibility-driven role in all real estate transactions, especially in the case of high-value property assets. In large ticket sized transactions such as those involved in Grade A office spaces, there can be no margin for error. Transparency, ethics and accurate market information play an inalienable role in closing such deals.
The year 2014 has been quite fruitful for the real estate sector in terms of business sentiment, although the real effect of many of the policies and amendments announced in 2014 will take effect only in 2015. Starting from Union Budget FY2014-15, where affordable housing was considered on par with infrastructure, to relaxation of rigidities in the Land Acquisition and Real Estate Regulatory Bill, India’s new Prime Minister has been offering the India real estate sector consistent doses of energy.
Market pundits have already started begun to forecast 2015 as the best year in the current decade when it comes to real estate absorption. If we apply the thumb rule of every 100 square feet of absorbed commercial space yielding one new job to the net absorption of 40 million square feet of commercial space in 2015, it emerges that the coming year will see the generation of around 400,000 new jobs.