Real Estate Industry Sees Favorable Changes in 2009, Eyes Consolidation and Low-Risk Investments in 2010

Strategic Insights -

The real estate industry in India experienced a rollercoaster ride in 2009, hit by the global economic downturn but also witnessing a slowdown in prices and improvements in liquidity. Developers and industry experts share their insights on the sector's performance in 2009 and their expectations for 2010.

Key Takeaways:

  • The year 2009 was a mixed bag for the real estate industry, with the global economic downturn affecting the sector but also leading to a correction in prices, making them more affordable for buyers.
  • Established developers re-evaluated their strategies to focus on customer-centric approaches, while investors saw the downturn as an opportunity to buy properties at reduced prices.
  • Affordable housing emerged as a major highlight of the year, with developers focusing on building smaller, functional, and affordable homes to meet the demands of the middle-class.
  • The Indian real estate industry performed relatively better compared to other countries, with the government's fiscal and monetary stimulus packages, low mortgage rates, and rationalization of project costs contributing to an improvement in liquidity.
  • 2010 is expected to be a year of consolidation and low-risk investments, with developers focusing on faster delivery of projects, customer satisfaction, and affordable housing schemes.
  • Gaurav Mittal, Director, CHD Developers Ltd, emphasized the need for developers to focus on customer-centric approaches, citing "If you have a Customer Centric focus, you can never go wrong."
  • Avnish Agrawal, Director, Meriton Group, ABA Builders, highlighted the importance of excess supply and lower rates in the coming year, with a focus on budget flats to meet the demands of the middle-class.
  • Vijay Jindal, CMD, SVP Group, pointed to the steep rise in the industry in the last quarter of 2009, characterizing it as a "saving grace" for the sector.
  • Raajeev Rai, Vice President, Corporate, Assotech Limited, underscored the sector's strong fundamentals, based on huge domestic demand and the government's support through fiscal and monetary stimulus packages.

Statistics:

  • The Indian real estate industry is expected to see a significant rise in new project launches in the coming year.
  • Affordable housing emerged as a major highlight of the year, with developers focusing on building smaller, functional, and affordable homes to meet the demands of the middle-class.
  • The sector saw a correction in prices, making them more affordable for buyers, with prices going down to levels seen four to five years ago.
  • The government's fiscal and monetary stimulus packages, low mortgage rates, and rationalization of project costs contributed to an improvement in liquidity in the sector.
  • The industry is expected to see a significant rise in sales, with a focus on good quality "affordable" homes and genuine "luxury" homes.

Sources:

  • Gaurav Mittal, Director, CHD Developers Ltd
  • Avnish Agrawal, Director, Meriton Group, ABA Builders
  • Vijay Jindal, CMD, SVP Group
  • Raajeev Rai, Vice President, Corporate, Assotech Limited
  • Rajiv Singla, Managing Director, Mapsko Group
  • R K Arora, Managing Director, Supertech Limited
  • Anil Sharma, CMD, Amarprastha Group
  • Times Content (reprint rights)