There are signs of revival in the property markets in certain locations
The world and especially India has created history in a manner of speaking by creating the quickest turnaround and reviving markets. Equity, Gold, Silver, and Oil all of which with exception of Gold were at a low around the same time last year are at a new high or managed to sustain at higher levels today. Property rates too after correction witnessed a mini plunge and managed to revive and making a comeback with levels higher than last year’s peak in certain locations.
The second quarter results of this financial year posted by most companies have been encouraging. Insecure non-resident Indians seemed to have been the biggest buyers/ investors. I say insecure because of uncertainties in their current location of economy and their business or job status. Plus panic of some sort that prices are on the rise again and this would be a an opportunity to buy, drove many to conclude deals. A lot of local buying for actual use also took place. All of this mainly happened in new construction or under construction projects
The resale market seems to be stagnating and the seller’s expectation versus buyers offer seems to be a mis-match in almost negotiations. Rental markets too seem sluggish due to oversupply and lack of demand. The mid level expat or executive housing segment seems to have almost disappeared.With signs of revival in economy one can only hope expansion plans bring about hiring in the missing ‘segment’ and in turn revival in rental markets.
The rush to create affordable housing projects seemed to have been the flavour of the last three quarters. What remains to be seen who and how many ‘walk the talk’.With the UPA government having got a second term and talking about slum eradication, slum projects would make better business sense for land acquisition and development. I am no ‘town planner’ but in my opinion priority should be allotted to slum rehab and re-development over society type redevelopment over the next five to seven years.
I think alongside development and redevelopment one needs to stay focussed on the big picture of sustainability, given our ever growing, existing and migrating population and traffic congestion. As for future, a lot would depend on how equity markets fare the remaining two quarters and how liquidity flows. There seems to be no immediate threat to property prices and market, but a lot would depend on how the rental markets fare.