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In between festive season Dussehra to Diwali, builders and developers time to launch new projects, as Indians consider this period very auspicious to purchase investment assets like houses.

With the onset of Navaratra, the festival season has started. In India, this period is considered to be auspicious for the purchase of investment assets like houses. Because of this, a large number of people enter the market to make such purchases. At the same time, developers and builders also try to time the launches of their new projects with this period.
Despite slowdown of the economy, the demand for housing continues to be strong in the country, particularly in the National Capital Region (NCR). Real estate consultants say that the strong demand in the housing sector in the NCR is mainly due to strong growth in the service sector in the economy, at around 9%.

Ansal API Sushant Auqapolis on NH 24 Ghaziabad

Ansal API Sushant Auqapolis on NH 24 Ghaziabad

At the same time, the government’s decision to open up foreign direct investment (FDI) in multi-brand retail will also give boost to demand in several cities, including those in the NCR. At the same time, FDI in real estate has also started picking up as the sector has emerged as one of the best sector for investment. According to a report by Cushman and Wakefield, the total FDI in construction development has seen a significant fall since 2008.But the current year has seen a strong rebound. According to the report, the first half of 2012 recorded nearly Rs 27,600 crore inflows, which is close to breaching the total level in 2011.

Not only this, the institutional investments in the sector have also picked up in 2012.According to Real Capital Analytics, the quantum of institutional transactions during 2012 in the real estate sector was estimated at Rs 97,430 crore. A majority of the transactions have been in the commercial segment. The commercial office sector has the highest share at Rs 54,700 crore followed by the residential sector with nearly Rs 27,500 crore of institutional transactions during the first three quarters of 2012.The number of deals is increasing year after year since 2009,in the NCR region.

As investment increase in the sector, the construction activities are also likely to further pick up in the coming years. This will certainly add to fresh supply in the housing sector. But at the same time, the demand for residential real estate has also picked up in the country, particularly in the NCR. According to C&W, the demand for residential units will be around 3.80 lakh during 2012-16 in the NCR.

The demand is likely to further pick up as the interest rates on home loans will be corrected. In its recent policy announcement, the RBI had indicated downward correction in the interest rates.

QUICK NOTES

DESPITE SLOWDOWN OF THE ECONOMY,THE DEMAND FOR HOUSING CONTINUES TO BE STRONG IN THE COUNTRY,PARTICULARLY IN THE NATIONAL CAPITAL REGION