India seeing pick up in housing sector demand
The signs of reviving global economy can be seen in the Indian real estate sector where housing projects based in metros are witnessing good demands from service class.
Online, August 27, 2009 (Newswire.com) - Paisawaisa (New Delhi) 27 August 2009: According to the study, the real estate sector of India is seeing a good growth with major cities showing rise in the demands of residential projects. The increased demand is the result of declining property prices and recovery of job market.
The real estate industry in India witnessed a big decline in the demands of housing projects with the global economic slowdown and volatile job market.
The associate vice president of Religare Capital Markets Suman Memani said that the global economy is showing the signs of revival and the people are not very much scared of losing their jobs. Therefore a huge demand in the real estate sector can be expected through the service class.
He also said that the demand in housing sector is also increasing with the declining interest rate on home loans which have come down to 8% from 13% in early 2008.
However, Memani added that a rise in the prices can be expected in the residential segment as it accounts for 70% real estate market of India.
The analysts expects that the residential prices for the premium and luxury segment would also increase by 10-15 percent because some locations are witnessing decline in the valuations with property registrations increasing by 20-22 percent in the last quarter in cities like Pune and Mumbai.
The real estate companies in India like Omaxe, Ackruti City Ltd, Parsvanath Developers, Anant Raj Industries Ltd and Shobha Developers have suffered huge losses in the middle of global economic slowdown and faced even more competition when many other companies launched cheaper housing projects.
The president of Religare Capital Markets said that many companies of real estate in India are taking the fund raising route for making their balance sheets go positive, while some companies are involved in execution of projects rather than collecting the lands.
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