Indian realty industry to have revival soon

There is nothing to fear more as the downturn worldwide is over almost and the Indian real estate sector is reverting to steadiness fast. When will the recovery in essence start? As per the latest study report of a prominent real estate consultancy, the Indian real estate is likely to enter the recovery phase by end-this year and macro-economic and sector-specific factors will act as catalysts in this recovery.

Jones Lang LaSalle said in its report, “Economic recovery during CY 2010-11 is likely to reinvigorate the interest of foreign investors in India’s real estate market. We expect enhanced capital inflow in the real estate sector in the medium-to-long-term.” This is not all as the company has also made it clear that the primary earnings is expected to depict compression during CY 2010-11 and capital values are likely to decline during 2010 before recovering in 2011.

“Initial yield has already started to show a declining trend during 2009 which is likely to be the case in the near-term. Yield on 10-year Indian Government Bonds is likely to harden due to higher fiscal deficit,” it said.

The report, on the other hand, did mention even though the high fiscal deficit is likely to harden interest rates in the economy, all other macro-economic variables are expected to improve during CY 2010-11 which is likely to induce real estate market recovery after the slowdown of CY 2008-09.

it is worthwhile to mention, in accordance with the World Economic Outlook Report by IMF, the world economy is likely to contract by 1.4 per cent during 2009. While advanced economies are expected to contract by 3.8 per cent by the end of this year, emerging and developing economies are likely to grow by 1.5 per cent. India and China are expected to grow by 5.4 per cent.

“India and China are expected to witness a robust recovery with increase in real GDP growth from CY 2008-09 levels and Indian economy is expected to grow at 5.4 per cent during 2009 (the second highest in the world after China, which is likely to grow at 7.5 per cent),” the report said.