South markets lead recovery in residential real estate sector
Even though demonetisation dealt a blow to the real estate sector, the year 2017 is expected to bring stability and growth to the market, according to real estate consulting firm CBRE South East Asia. It its outlook for 2017 the firm said the revival has been led by markets in South India.
“The impact of demonetisation was expected to to be catastrophic for the economy, however, the reality on the ground is quite encouraging, indicative of the fact that the economy is already on its way to fully absorb the impact of the policy.”
In its outlook for the residential market CBRE said a revival has already been seen in the January-March quarter. “India residential supply has jumped by 70% quarter on quarter. Compared to only 18,000 units introduced in the October to December quarter, we have seen more than 30,000 units introduced in the January to March quarter. The biggest jump was in Chennai, Hyderabad, Kolkata and Bengaluru.”
During the January to March quarter housing sales also jumped by 70%. Compared to 14000 units sold in the October to December quarter, more than 23,000 units were sold in the January to March quarter. “The biggest jump was again witnessed in Chennai, Hyderabad, Bengaluru and Pune,” it said.
Anshuman Magazine, Chairman, India and South East Asia, CBRE said, “With 2016 being the year of landmark decisions for the Indian real estate industry, the sector saw concerted efforts by the Government to bring in transparency as well as boost consumer sentiment in the sector, especially in the residential market. The outlook for the year 2017 is positive with an expectancy of steady growth, stability and revival in the market.”The firm said housing sales would revive in the first half of this year both in primary and secondary markets. It said affordable housing, which has witnessed increased interest from private developers would emerge as the key driver of housing sales.
According to CBRE the office market would continue to witness high absorption levels and global investor interest. “In 2017 the office sector is likely to maintain its momentum with an anticipated absorption of 40 million sq ft. Supply across seven cities is expected to marginally rise in 2017. Completion delays would likely to abate supply pipeline dominated by top three cities( Delhi NCR, Mumbai and Bengaluru), followed by smaller cities such as Hyderabad and Pune.”