With around 1.1 billion people, India is the second most populous country after China around the world and it is expected to overtake it by 2030. Its economic transformation over the past decade has pushed up real GDP growth to an average of 6% per annum since 1992.
Inda is emerging as an important business location, particularly in the services sector. Its favorable demographics and strong economic growth make the country an attractive place for property investors, given that demand for property is determined chiefly by business development and demographic trends.
There is no change in Property prices this year unlikely little bit go down as well as property projects sales have picked up the pace across most metros in the past few months, according to bankers and realtors. Property sales across major cities such as Bangalore, Chennai, Gurgaon and Noida rose on increased buyer interest, Bank of America Merrill Lynch said in its report for the fourth quarter of 2011. While sales in Gurgaon averaged 5,200 units over the last eight quarters against an average of 6,100 units on offer in the same period, Noida saw a marginal rise in home purchases.
Quarter-on-quarter home sales in Mumbai, however, fell 25%.
“Sales volumes across cities (Mumbai being an exception) surprised us positively. Mumbai is headed for a sharp correction in another quarter or two, while other property markets may remain stagnant due to rising unsold stock,” the report said.
The Confederation of Real Estate Developers’ Associations of India (CREDAI) also said that sales have picked up despite builders continuing to hold on to prices.
“Sales have picked up in the past few months and developers have not reduced prices as input costs have gone up. At first chance, they will increase rates by 10-30% across markets,” said Lalit Kumar Jain, president of the 6,000-member association.
“With inflation easing and chances of the cash reserve ratio coming down, builders are not so desperate (to cut prices) anymore as they have been able to generate sales,” said Renu Sud Karnad, managing director of HDFC, one of India’s biggest housing finance companies. Besides, builders are unlikely to reduce prices as they are managing to break even with 40-50% sales. Prestige Estates Projects has sold 30% stock in its newly-launched property in Chennai in just a month. “We have clocked total sales of Rs 1,464 crore in the past nine months, compared to Rs 1,385 crore in financial year 2011,” said Venkat K Narayana, CFO.
Mumbai-based property firm Lodha Developers said it has seen an uptick in sales since January. “People have been waiting for a price correction, but chances of that happening are very slim,” said R Kartik, chief marketing officer, Lodha Developers.
“Properties in the range of Rs 25-30 lakh are moving faster, but the chances of NPAs in that segment are more. Our experience shows property prices have always been on the upside. A correction, if any, would be too small,” said SP Singh, general manager (retail), Punjab National Bank.
Since the past two quarters, some 125 million sq ft has been added in new launches in the country’s top six markets. Bangalore and NCR saw the highest number of new launches at 48 million sq ft and 31 million sq ft each followed by the Mumbai Metropolitan region with 16 million sq ft, Pune 16 million sq ft and Chennai 12 million sq ft.