2014 was sluggish to say the least for realty sector. One prominent developer described year 2014 as worst for realty industry in decades. Home sales were muted in some pockets and virtually dead in some markets.
Property developers and other stakeholders were hoping for a turnaround post election 2014 in the realty sector which has been reeling for some years now. But that did not happen and in fact housing sales were low even during the festive period between Octobers - December 2014.
What were the challenges faced by real estate developers?
Positive steps were taken in Budget 2014 that will have positive impact in coming years
Other than the budget 2014, there were some positives as well:
Therefore, the steps have been taken, however, to turn around a big wheel; it will take time when results actually show up on ground.
There is also a possibility of interest rate cuts in first half of 2015 and that shall also encourage home buyers to enter the market and book their home.
So, all in all, 2015 appears to be more promising.
Property developers and other stakeholders were hoping for a turnaround post election 2014 in the realty sector which has been reeling for some years now. But that did not happen and in fact housing sales were low even during the festive period between Octobers - December 2014.
What were the challenges faced by real estate developers?
- Unsold housing stock of 7.6 Lacs housing units across India till June 2014
- Protest and legal recourse by buyers in cases of delayed projects
- High interest rates
- Realty sector in 2014 also witnessed adverse court judgments and regulatory orders against some developers including DLF
Positive steps were taken in Budget 2014 that will have positive impact in coming years
- Relaxation in FDI Norms
- Nod ahead for setting up of Real Estate Investment Trusts RETTs
- Announcement of 100 smart cities
- Focus and budget allocation for affordable housing
Other than the budget 2014, there were some positives as well:
- Improvement in office space leasing activity in second half of year
- Private equity (PE) investment in the realty jumped more than two-fold to Rs 8,900 crore in January-September period and the figure is likely to cross Rs 12,000 crore by year-end.
- Probably Real estate regulatory bill will be passed in 2015
- Possibility of Single window clearance system for realty projects in 2015
Therefore, the steps have been taken, however, to turn around a big wheel; it will take time when results actually show up on ground.
There is also a possibility of interest rate cuts in first half of 2015 and that shall also encourage home buyers to enter the market and book their home.
So, all in all, 2015 appears to be more promising.
