| |February 202019eal Estate has always been a very interesting subject and why not. There are so many ancillary businesses dependent on Real Estate. Government bodies, financial institutions all are associated with Real Estate and hence the stakes are high.After the financial crisis of 2008, the real estate sector was grappling and the residential sector had more or less recovered. The commercial real estate remained under pressure until this day as most of the developers dropped their plans of developing a commercial building and few even stopped the construction midway and changed the user. The sector was somehow on the recovery path when from November 2016 to July 2017, the sector suffered 3 more setbacks i.e. Demonetization, RERA& GST. The RERA and the GST were welcomed by the industry stalwarts and veterans; however many had different views on the timing when this was introduced. Any new law / tax does take a while to fall in place and needs to be given time too. Now things are falling in place and everyone is hoping for a positive outlook for this sector.A technical study conducted by the government in 2011 estimated housing shortage at 18.76 million units in urban areas, of which 96% pertained EWS and LIG and I am sure that this gap has further widened by now. Due to the overall economic scenario, despite the fact that there is a demand, no one is taking bigger bet. This is seen more in luxury segment where the ticket size is 4 Crores and above. People prefer to rent the properties which work out to 2% or 3% of the cost of property till they are assured of some certainty in the external factors. Due to this, the rentals have appreciated in most of the micro markets. The ticket size of residential between 1.5 Crores to 2.5 Crores is the hero. This is been moving consistently and which is why many new launches have happened in the western suburbs' northwards of Andheri and in the central suburbs' southwards of Ghatkopar. Commercial Realty has also witnessed momentum since last few years. There hasn't been much change in the price points but transactions have started happening. Since, no new organized commercial supply has hit the market, most of the A Grade supply has been absorbed in the micro markets of Lower Parel, Bandra-Kurla Complex, Andheri etc. There was a time when pre-leased office assets or alternately known as income generating office assets were most sought after by investors due to their double-digit yield but today the yields have dropped below 8%. As such most of the investors are turning away from commercial real estate and looking at other avenues to park their surplus. REITS (Real Estate Investment Trusts) which has been under a lot of discussions in India for couple of years will be a reality soon. Due to its organized structure this will give opportunity to even small investors to invest in Real Estate which otherwise was forte of few.With the present initiatives/acts taken/implemented by the ruling government, real estate is COMMERCIAL & RESIDENTIAL REAL ESTATE TRENDSBy Sameer Jivangikar, Founder & CEO, Solitaire RealityTHOUGHT CENTRAL RSameer Jivangikar, Founder & CEO
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