Indian real estate market witnessing a wind of change

Even though India has been able to thwart the ongoing slump and especially its dreadful brunt (that speaks of the country’s vigorous economy and also its potency eloquently), Indian real estate industry became hapless owing to the sorry developments in the international arena. While both demand and prices plummeted to a great extent, the mounting fund crunch posed another great.

Well, this is was the standard situation even a small number of months back but now a wind of change is being witnessed as well and in this regard price correction and lowering of interest rates have played major roles. It should be stated that these two factors have been instrumental in invigorating the market once again after a period of relative inactivity lasting the first few months of the year. Several prominent real estate markets in the country are witnessing a reversal and one of them is surely Gurgaon. Lots of improvements on the part of retail investors in the residential sector, especially in the low to mid-end housing segment, have been witnessed.

Speaking on this CBRE Market View, India Office, published for the second quarter, said: “Level of enquiries went up and, more significantly, transaction velocity also increased marginally as compared to Q1 (first quarter) of 2009… However with most of the activity confined to smaller format offices, vacancy levels remain high. Most developers deferred plans for launching any new projects, the focus being on deploying the scarce resources on completing projects in hand…”

“The downward trend in rental values seen till now has actually been arrested. We expect them to stay put at the present levels over the next quarter. Depending on location, project and sub-market dynamics, the decline over the past 12 months has been anywhere between 25 to 40 per cent. However, values have remained steady over the last quarter,” Pawan Swamy, Managing Director (Western India) Jones Lang LaSalle Meghraj, said.