From the Desk of Ajai A Kapoor
Realty Developments in 2015 – and how they will define 2016 for us.
6:00 AMRealty Developments in 2015 – and how they will define 2016 for us.
Wishing every one a very happy new year!
After a
rather dull and lacklustre 2015, we all have a lot of hopes from 2016. 2+0+1+6
adds up to 9, which is considered a very powerful and lucky number in the real
estate fraternity – so we all hope that this year would help revive and uplift
the market sentiment and the demand in particular.
Although
there has been no reduction in rates by most developers in 2015, transactions
in most cases are happening with a negotiation of 10-15 per cent, when a customer sits across the table with the seller or
developer. This is especially true in the mid to large ticket size transactions
of Rs. 3cr and above, though may reduce in the small ticket size transactions
of Rs. 1-3 cr. Most developers are selling their products bundled with a number
of schemes and freebies, to be able to push sales across the spectrum – which
has helped them gain some traction in sales of their products – however a very few of them have actually reduced
rates on their products, which is probably what the buyer has been waiting
for. While no one knows when the market sentiments and sales will really pick
up, most feel that it should be in about 6 months to one year as echoed here by Pirojsha
Godrej, MD Godrej Properties.
The coming year will see a number of important changes
and new rules which will change the market scape to some extent. Here, we would
like to highlight some of the important changes and their after-effects, which you
can expect to see in 2016:
RERA
(Real Estate Regulation Act): is a new Act passed by the Government to set up a housing
regulatory body, to safeguard the interests of home-buyers. This will help
monitor and regulate the developer fraternity and help protect investors and
buyers from losing hard-earned money invested in projects being developed by
developers. RERA also requires real estate brokers to get licensed to be able
work with developers and sell their projects. This new Act is expected to be
‘game changer’ and will redefine the way projects are sold to investors and
end-users. To know more about how it would benefit buyers, you could read up
some articles on our Blog on the same.
Relaxation of FDI norms in real
estate: The Government, in November 2015,
relaxed the FDI norms allowing Foreign funds to invest in the Realty Sector in
an easy manner. It has changed the norms for investments and allowed FDIs to
exit their investments and repatriate funds conveniently and within a shorter
time duration. This will attract more funds into the sector and help the
cash-strapped sector, which has slowly been depleting its fund resources over
the last few years. You can get more information on the same on our Blog.
New DP Plan 2034: The new DP Plan 2034 will be passed in 2016 once it goes
through through the procedures of approval from the public at large and the
Government. This will define the way for development for the next few years and
give the developers a vision and path for their next projects. We expect this
to be a strong basis on which the development for the next few years will get
planned upon.
Online Realty Portals: 2012-2015 saw a number of realty portals getting
launched every month, trying to get a pie of this large and wide market space.
There are portals trying to sell homes on the Internet, and those that are
trying to connect buyers with sellers directly. The online market space now
seems to have got matured and we have now started seeing a number of mergers
and consolidation between them. 2015 saw Edelweiss buying out
Brokerspleaseexcuse, Quikr buying out Common Floor and merging it with its
portal as Quikrhomes, PropTiger buying out Makaan.com and further Square Feet
buying out Realizing.in – a realty data analytics company. Meanwhile, Housing.com,
the ‘poster-boy’ of the online real estate space also was in the news for a
number of right and wrong reasons, and is still struggling to find its identity
in the online real estate market space.
We expect to see some more consolidation in the online
space in 2016 resulting in the formation of a fewer, but larger ‘online property
giants’.
The above changes and trends should
give you some visibility of 2016.
- by Ajai A Kapoor
#360degrees
#360degrees
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