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The 2016 Real Estate Market: A Year In Review [Infographic]

As 2016 winds up, it’s time to review the developments that took place through the year.

Undoubtedly, the year 2016 has been remarkable for the Indian real estate. The year will be remembered as the year of implementation of new laws and policy changes. The year also exposed the reality of real estate, where judicial intervention has not only underlined their aberrations, possession delays and defaults but also given a ray of hope to dejected home buyers. Several new laws and decisions announced during 2016, are likely to put great impact on the Indian real estate sector ahead. Happykeys will constantly examine how these policies will affect the property market in the short-term and long-term and what it means for home buyers.

 

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Year 2017 likely to be a trendsetter for real estate

Year 2017 likely to be a trendsetter for real estate

The Indian real estate market may become attractive at the onset of New Year. Happykeys takes a stock of developments and factors that will influence the real estate market this year.

As 2016 winds up, it’s time to review the developments that took place through the year. Undoubtedly, 2016 has been a remarkable year as far as India’s urban infrastructure is concerned. Hence, Indian real estate has many positives to look forward to.

Here is a report on how Indian real estate segment is expected to perform in 2017.

Demand Factors:

According to the Ministry of Statistics and Programme Implementation report the population rise in county is on a steady rise. With this rising population, there will be steep rise in housing demand also. The absorption of high number of housing units, itself depicts the picture of New Year that the occupancy rate is going to be high in 2017.

In a report by real estate consultancy firm JLL, in the last four quarters the property prices in Mumbai and Chennai improved by 3.7 per cent and 1.7 per cent respectively while the DELHI –NCR property market have remained stagnated. Market experts believe that this situation is anticipated to improve in New Year based on record of series of new launches and ease in property buying process due to government new laws and decisions.

Mr-Prashant-Tiwari-Chairman_Prateek-GroupAccording to Prashant Tiwari, Chairman Prateek Group, “The changes in real estate market have already started happening with measures like not increasing base rates, implementation of Real Estate (Regulation & Development) Act, relaxes in FDI norms and exemption of service tax on construction of affordable houses up to 60 square meters. Benami transaction act, infrastructural developments and many other proposals lying in pipeline will eventually take the realty market towards improvements and progressions in coming year. Therefore outlook for the next year 2017 is very much positive. We are optimistic that real estate sector will witness a changed environment with improved customer sentiments and enhanced growth“.

 

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Deepak Kapoor, President, CREDAI Western UP observes that, “There is growing positivity in the real estate sector that can now hope for a new phase of growth. The government has taken various steps to ensure that an atmosphere of growth and development is created for real estate sector. Moreover, the economic status of our country is also improving which will further boost the demand for properties. Considering the developments and changes which are taking place in the realty sector currently, property market is expected to much improve in 2017. “.

 

Mr-Akshay-Taneja-MD-TDI-Infratech-Ltd

According to Akshay Taneja, MD of TDI Infratech Ltd, “2017 will definitely be a good year for real estate sector. Year 2017 will help real estate sector in a big way as many positive changes have already taken place in the current year. These include reduction in interest rates, interest subsidy to home buyers, increased loan portfolios, increased and ease FDI in real estate & construction sector, implementation and introduction of real estate regulatory authority and GST bill etc. “.

 

 

Government Initiatives

A series of new decisions and laws promise to bring good days ahead to the Indian real estate market. The respective state governments has also taken several initiatives to encourage the developments in the real estate segment. Here is the list of some of the major government initiatives that will boost the morale and confidence of home buyers.

  • The Cabinet Committee on Economic Affairs (CCEA) has approved various measures to revive construction sector
  • The central government has brought Real Estate (RERA) act, 2016 on May 1, 2016, which is aimed at making necessary operational rules and protecting the interests of home buyers
  • New exit policy: With the enforcement of new exit policy, builders can complete their ongoing projects nearing completion and give possession of flats on time
  • Model Shop Establishment Act: The rule will give freedom to retail outlets to keep open 24×7. This act will promote investment in commercial sector. Investors can look in the commercial space as in the near future prices may go up
  • REIT rule relaxation for small investors.
Bangalore real estate

Things to know about Bangalore real estate

The establishment of world-class IT industries, advent of metro and good arterial roads has made Bangalore one of the most sought-after realty destination in India. Here are more details.

A study on real estate market reveals that despite market slowdown Bangalore has emerged as a strong and mature realty market in the last couple of years. Recent new launches in the low cost housing options within price range of Rs 4,000- 5,000 per sq ft have grabbed the buyer attention, with good inventories in different corridors of the city.

According to real estate consultancy firm JLL, inventories will soon dry out in 2016 and 2017 and property prices will firm up or perhaps many micro markets may go up significantly.

Especially, the IT driven micro markets of Bangalore city such as Whitefield have shown signs of strengthening in the last one year. Some locality with projects in the affordable and mid segment category have performed well in the pre-launch and resale stage itself.

In recent study of Bangalore realty market, the affordability factor is playing a decisive role during the sale of flats. The 2 BHK and 3 BHK apartments of sizes between 800 – 1300 sq ft are being offered, keeping the buyer budget in mind.

Infrastructural Development

The civic infrastructural development of the city is monitored by Bangalore Development Authority (BDA). Moreover, the entire Bangalore Metropolitan Region is divided into five Area Planning Zones (APZ) and six Interstitial Zones (IZ).

Peripheral Ring Road (PRR): 65-km long – 1,920 acres – Connects Hosur Road and Tumkur Road, cutting across Old Madras Road and Ballari Road. The PRR connects major highways and city roads from Tumkur Road and Hosur Road.

Satellite Town Ring Road: This project is to connect Bangalore’s satellite towns – Ramnagar, Dobbespet, Devanahalli, Hoskote, Attibele and Magadi.

Signal-Free Corridor to the International Airport: The 22-km stretch between Hebbal flyover and the International Airport is fully developed as a signal-free corridor connecting Kempegowda International Airport, which has reduced travel time to 20 min.

Prime Localities

Central Bangalore: MG Road, Lavelle Road, Langford Town, Vittal Mallya Road and Richmond Road

East Bangalore: Whitefield, Old Airport Road, Old Madras Road, KR Puram and Marathahalli

West Bangalore: Tumkur Road, Yeshwanthpur, Malleswaram, Rajaji Nagar and Vijay Nagar

North Bangalore: Hebbal, Bellary Road, Hennur, Jakkur, Yelahanka and Banaswadi

South Bangalore: Koramangala, Sarjapur Road, Jayanagar, JP Nagar, HSR Layout, Kanakapura Road and Bannerghatta Road

Prominent Developers

Prestige Group: The group came into real estate projects in 1986. Today, it is known as one of the trusted realty developers in South India. The Prestige group has 65 ongoing projects and around 28 under-construction projects.

Brigade Group: Brigade Group has around 35 years of industry experience with presence across several cities in South India. Sonata in Vasanth Nagar, Metropolis in Mahadevapura, Bangalore and Crescent in Frazer Town are some of the top projects by the builder.

Sobha Group: Established in the year 1995, the Sobha group brings 21 years of experience in the industry. Today, the group has done with total 114 projects and 31 ongoing projects in the Bangalore city.

Tata Value Homes: The Tata carries legacy of experience in the real estate industry too. The group ventures into real estate in 2009. In 6 years the group has done with 15 projects and 7 ongoing residential projects across the country.

Smart city projects

Smart city projects spell opportunities for realty

The central government’s ambitious smart cities project and Union Budget 2016 have together brought good news for new home buyers.

In the first phase of smart cities projects, the Union Government has picked 20 cities which will developed as per the norms established. These 20 cities may not be among the popular residential market today but with the infrastructure overhaul they are expected to be among the top livable cities in the country.

The central government ambitious smart cities mission will boost the real estate market, say experts. This new move is also expected to bring great opportunities for the realty sector. The government is expected to spend 89 per cent of the proposed Rs 48,000 crore for the first 20 cities. This investment would be towards housing construction, urban development, transportation, water and energy.

Impact on real estate

According to white paper released by RICS, smart cities mission will provide immense opportunities for high volume real estate developments in the country. This would also bring huge capital investment from foreign countries. The report says that a big part of this fund has to be invested to empower the civic infrastructure of the cities, which has got the developers enthused. The top cities of India who has not seen new launches in residential and commercial property since very long time, will get accelerated with the start of project.

According to RICS report; 7 per cent of the total investment is allocated for technology infrastructure, while 4 per cent of investment is allocated for public services.

Read : Impact of the Smart City tag

The Union Urban Development Minister too has urged more companies – especially the multinational companies  to make investment in these upcoming smart cities.

Right time to invest:

Real estate is an investment zone, where there is believed that money invested now will fetch better returns, even better than SIP’s, mutual funds, fixed deposit and other traditional investment tools available in the market.

The new real estate bill will also play an important role in the smart city story by protecting the interest of home buyers and bring in more transparency in real estate industry.

The prime objective of India’s smart cities program is to encourage cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘smart’ solutions”. This project will stir the real estate market and will put positive impact on the property market”, says Harish Arora of Saksham services.