Looking Back, Looking Ahead - 2014

Published on Dec 30th, 2013
The year 2013 witnessed India caught between low growth and persistent high inflation of the last few years. This coupled with depreciating value of rupee, strict monetary regulations, RBI's revised norms to lending to real estate sector, curb on subvention scheme and disequilibrium in the political scenario led to the subdued demand of real estate in the country.

There was a sharp decline in the consumer confidence in India as reflected by the Nielsen's Consumer Confidence Index. Realty sector couldn't remain untouched by this unswerving wave of pessimism.

In a striking contrast to previous years, festive season in 2013 noticed a lull across the asset classes. Regardless of the market sentiments the residential property prices illustrated skyward progress. This further led to a decline in absorption compared to the same period last year.

Cities which exhibited a sharp upsurge in the supply observed higher decline rate in the absorption. Conversely, affordable locations and a few evolving markets in and around suburbs proved trade pundits wrong. The top emerging destinations of 2013 were Sohna and Dwarka expressway in Gurgaon.

Though the year was a lackluster year for the sector, introduction of Real Estate Regulatory Bill and Land Acquisition Bill in the parliament brought in some solace.

With economy showing no signs of revival at least in Q1 of 2014, real estate will continue to show signs of weakness in line with other sectors and asset classes. Investors and end users will continue to be cautious as hurdles to growth will prevail until the first quarter. Market may look up post the general elections. Stable government, sustainable policies, conducive RBI Policy, better industrial growth & focus on industrialization, improved infrastructure and timely delivery of infrastructure will lead to positive market sentiments. A new investor will not come in unless the rupee stabilizes. Market will largely be end user driven.

Q2 looks promising not just for the sector but economy in general will benefit from the changed political scenario. Demand in the affordable housing sector will continue to drive growth. A developer riding on good reputation, decent location, right price point and transparency in delivery will be able to hitch their wagon to success.

Along with Dwarka Expressway, Sohna is also fast emerging as an attractive destination for stand-alone developments, group housing and commercial complexes. And the areas that are likely to report significant growth going forward are Rewari and Dharuhera."

Irfan Razack, CMD, Prestige Group
2013 has been a year of contradictions. The general outlook, supported by media reports, has been predominantly negative with the economy following a downward trend and inflation and interest being on the rise. However, despite all the pessimism, I am happy to say that the real estate market fared exceedingly well in Bangalore and across South India this year. Prices have been in line with inflation and the market has seen good momentum in sales and leasing.

2014 is an election year and will be accompanied with several distractions. The Government machinery will be focused more on the ongoing elections, which in turn is likely to slow down the files application and approval process till the elections are over. I believe that the second half of 2014 is when business activity will kick-start vigorously.

A significant milestone in 2014 will be the launch of Prestige Lakeside Habitat in Varthur. This is the largest development by the company till date, in terms of acreage and the total number of residences and is a township development comprising of both villas and apartments. The unique feature of this development is that it is the first development in South India to be co-branded by Disney and will feature Disney-inspired residences. The pre-launch in 2013 has met with tremendous response and we are eagerly working towards the launch of the development in January 2014.

Finally, 2013 has been a fabulous year for the Prestige Group, replete with multiple milestones and we enter the brand New Year, wishing all our patrons and friends a wonderful and prosperous year ahead.