Financial Year End, General Elections, Uncertain Equity Markets: Doom for Real Estate?

Our regular readers must have noticed that we have become quite inactive recently. We are not posting, sharing our opinions or exchanging our experiences with our readers on a frequent basis. Well, you are correct here! We have become dormant from last 2 months just as the sector itself looks inactive due to several reasons. Let’s have a look at these reasons & their effects on the Real Estate.

Financial Year End

World may celebrate new year’s eve on 31^st December but for corporates and financial world, the new year eve is on 31^st March. All the financial books and accounts are settled in the March-end. Every year around this period, the real estate and investment sector suffers a seasonality blow. People generally hesitate from making new investments in any asset class around this time due to taxation issues & paper formalities.

This is one of the reasons that there is no noticeable activity in Real Estate from last 1-2 months.

Equity Markets

Due to the General Elections in the largest democracy of the World – India, the equity markets are experiencing a roller coaster ride. With strong wave of change in Government, the markets are reciprocating in a non-deterministic manner. This is creating a huge confusion and restlessness in the equity and investment markets and investors are shying away from making any investment until the markets achieve stability.

This restlessness has also been passed to real estate which is adding more to the realty doom.

General Elections

As discussed in our earlier post, Effects of General Elections, 2014 on Real Estate <link>, the General Lok Sabha Elections are creating a lot of turmoil in Indian Realty Markets.

Closing Remarks: All the above mentioned factors are creating a negative environment for Real Estate but very soon the market will bounce back to greater heights.

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The Goa Property Market – a Quick Overview

Once a tourist heaven, Goa has now opened up its doors to the real property market. The property souk of Goa has loads of options – from villas to beach houses. The following post explores the real property market of Goa. Read on to know more.

Introduction

Deep blue seas, vast skies stretching up to the horizon – and sun-kissed beaches – Goa is definitely a haven for travelers. Tourists from all across the globe flock to this state every year; whether to soak up the sun or to experience a long stay at a traditional Goan house — the place offers absolute ecstasy.

However, while the smallest Indian state offers an exciting experience in terms of travel and tourism, it also happens to be one of the leading states offering the best Gross Domestic Product (GDP)—almost two times higher than that of the entire country.

The Goa Property Market

While the state continues to be one of the best travel destinations, of late, the property market of Goa has been in the news. Interestingly, among all the Konkan properties, the property market of Goa has been pretty much in demand with the end users. Investors have been rolling out enough money in order to capitalize the potentials of the Goa residential property market. One of the biggest factors contributing to the growth of the Goan property market is the tourism boost in the state.

Since tourism is one of the most popular revenue generating segments in the state, tourism has propelled the growth of the property market to a great extent; industry experts opine that a recent trend of second hand homes being sold off at a bigger price has been noticed. This shows that end-users are even considering buying a property in Goa for investment purpose as well.

Trends within the Goa Property Market

Interestingly, the Goan property market has been a favourite with foreigners and also non-resident Indians. While Goa is yet to come at par with other locales like Phuket, Maldives and Bali, NRIs have started shifting focus to this state. End users can choose from loads of options in the residential souk of Goa. These comprise the following:

• Hill Villas and Apartments
• Farmlands
• Beach Properties and Apartments
• Commercial and Retail Spaces
• Portuguese style villas and traditional Goan cottages

As the place happens to be a tourist heaven, even foreign tourists have started taking a keen interest in Goan properties. It has been found that foreigners have been inquiring about apartments and beach properties in Goa to a great extent. France and United Kingdom tops the list of foreign tourist in this category. Reasons adhered for the same is the low crime rate along with the lifestyle of the state that is highly westernized in nature.

Another trend observant within the real property market of Goa is that NRIs have been flocking to the region quite often. NRIs especially from the Gujarati community have been flocking to the region for investment purpose. This is because; Goa is the only Indian state that offers

The real property markets of the region have recorded a substantial hike of 15% to 20% in the last two year. Apartments in areas in Vasco and Panjim are some of the hot properties within the Goa property. These areas have sold off multiple inventories within a few months of their launch. Leading developers like DLF, Riviera, Parsavnath and Nirvana Nest have launched several real estate projects within the state. Some of the prime locations where you can find properties are Anjuna, Vasco, Vagator and Calangute.

Overall, the property market of Goa has been performing extremely well in terms of investments and also mere purchase powers. Those who are willing to invest in beach properties or a property that is a little different from the normal ones – the Goa property market has several options for them.

Author Bio: A follower of the latest trends in Real Estate, Sampurna Majumder has been lending her expertise to 99acres.com by writing articles and blog posts on the in-news topics such as these. 

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Reader Queries [RQ] – Investment along Yamuna Expressway?

One of our readers – Dr. Shama Idris has asked us following questions about Yamuna Expressway Real Estate scenario:

• Is it viable to invest in the ongoing projects on Yamuna Expressway?
• How long will it take before the area becomes busy, bustling with easy means of transportation?
• It appears unfit for living at the moment, how long will it take to be a good destination?

As we believe that our other readers would also be interested in the answers to the above queries, we decided to write a post on this topic. Here we go.

What is the purpose of your interest?

 Dear Dr. Idris, before reading our answers to your questions, we would request you to first decide whether you are looking at the said property for the purpose of Investment or for Residing. This is important because the scenario will differ in both the cases.

Current Scenario of Yamuna Expressway

Although the properties along Yamuna Expressway Corridor started off at an alarming rate, but the present scenario speak a different tale altogether. The prices have been almost stagnant in the range of INR 2000 per sq. ft. to INR 4000 per sq. ft. from last 2 years. To add to more woes, prices have fallen in some of the projects recently.

What do you think is the reason behind this? Let’s see.

Political upturn in the State – The previous State Government in Uttar Pradesh (where this expressway is located) started off this project and was very enthusiastic about the development along this corridor. This is the reason why several allied projects like Buddha Racing Course, Hotels etc. came along so rapidly. But with a change in the Government, all the intentions took a U-turn and looks like the new government is not-so-keen in accelerating this project.

Demand-Supply mismatch – As has been an old tale in this market, real estate builders & developers flood every area with projects where at least one of them sees the potential. Same is true for Yamuna Expressway! Today there is plethora of projects (ongoing & completed) present along this expressway. Result – there are fewer buyers than suppliers! The above scenario too forces the land prices to decrease gradually.

Too much investment but no habitation – Most of the people who have purchased properties here have purchased them for investment, not for self-residence. This has created a situation that even while much of the properties have been sold, but the area still exists deserted. Consequently the connectivity to mainland Delhi through public transportation is limited here. This situation inhibits anybody who wishes to reside in this area as the area is still not so-busy and difficultly accessible.

Negative word-of-mouth – Due to all the above mentioned issues, coupled with other factors like availability of other areas in Delhi-NCR, there has been a wave of negative word-of-mouth about Yamuna Expressway. This has also created unrest among the investors about the area.

Answering your Queries

Query 1: Is it viable to invest in the ongoing projects on Yamuna Expressway?

Answer: If you ask us our personal opinion, we would say that it depends on your purpose of investment and its time horizon.

• For long term (5-10 years): it seems to be a decent investment.
• For shorter terms: We are afraid, it may not be fruitful to invest here as appreciation would be small and there would not be so much rental gains as well.

Query 2: How long will it take before the area becomes busy, bustling with easy means of transportation?

Query 3: It appears unfit for living at the moment, how long will it take to be a good destination?

Answer:  Nothing can be said with 100% surety, but as per our analysis it should take at least 3-4 years more for this area to become busy and be a decent destination. Reason being, we can expect a change in government policies and development of accessibility channels to this area in upcoming years.

Disclaimer: All the above analysis of the area has been done by RealT Horizon and we hold no interest with any particular developer or project at Yamuna Expressway! Investors should make a rationale decision based on their analysis and cognisance before investing here.

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Reality of Jaipur Real Estate

We have taken a long time in writing this post for our readers. Being our place of origination, Jaipur deserves special attention in our analysis. Property market of Jaipur has become an unsolved puzzle for real estate experts now-a-days. Let’s see how.

Current Scenario

Right now the property market is touching skies in the capital city of Rajasthan. Land, although available in plenty, is becoming scarce partially due to the increasing investors’ population and partially due to the artificial scarcity created by the realty giants. Once famous for its beautiful bungalows & villas, Jaipur is rapidly getting covered by the high-rise buildings and apartments. The beautiful and calm city-culture of Jaipur is swiftly getting replaced with fast-paced metro-culture. Last 10 years have proven to be a game-changer for the city of Jaipur. In this post we will try to discuss some of these aspects.

Reasons for abrupt change in Jaipur

The dramatic change in Jaipur story as discussed above may be attributed to following aspects:

• Rapid urbanization
• Growth of Industrial Parks
• Development of new SEZs
• Highways & other Infrastructural advancements
• Proximity to Delhi NCR (Gurgaon-NOIDA-Faridabad)
• Immigration of several MNCs
• Investments by NRIs

All these coupled with various other factors like increased employment opportunities have paved the way for Jaipur Real Estate to experience an amoebic growth in last few years.

Creation of a Realty BUBBLE?

If someone tries to compare the Jaipur property prices of 2005 & 2014, he will undoubtedly allege Jaipur of being covered by the property bubble. But is it the reality? – The answer according to us is – NO. We couldn’t see any formation of any asset bubble or obnoxious growth of land prices. We agree that the current market rates are very high, but we believe that they are still not overpriced; rather it is their potential price level.

The kind of infrastructural facilities and standard of living that Jaipur offers, justifies its property price-levels. After all one can’t ask for all the awesome infrastructures and yet wish to keep paying the same prices for land forever!

Also, the development of inner and outer ring-roads around Jaipur has eased the commutation issues and increased the accessibility of all the corners of the city.

Where will the land prices move in future?

Although a tough-nut to crack, we trust that the land prices will continue seeing the sky route, especially after the elections which have resulted in the change in the government. History is evident that with this government, the land prices boosts automatically in Jaipur!

Closing Remarks

Although with our analysis and our intuitions we can say that Jaipur property market will boom further in coming future, we request our readers to so their own research before making any investments in this market.

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Chandigarh & Around: 2014 Hopeful for a Brighter Future for Real Estate Investors!

With the Indian economy showing encouraging signs of recovery right from the beginning of the New Year, both realty stakeholders and experts are betting the post-election second half of 2014 to be the best time for our real estate market to re-surge with all its might. To make out why 2014 is going to ensure a brighter future for real estate investors in India, keep on reading!

Despite the year 2013 ending with a somewhat dismal realty scene, it is a new hope from the New Year that is still keeping the stakeholders interested in the market! The Indian real estate industry seems to have already forgotten the forgettable last year and looks forward to make a fresh beginning in 2014.

Encouraged from the initial hints of revival, experts and market watchers too have predicted the second half of the year to come up with clearly noticeable changes. They are presuming the General Elections to change the game and allure the investors in most of North Indian, including cities like Chandigarh and nearby regions, especially for those ready to make long term deals!

How will the General Elections Play a Pivotal Role?

Customer confidence experts believe will be in a state of passiveness throughout the first half of the year 2014. This can be attributed to improbabilities associated with macroeconomic conditions, domestic and international, and the general elections. It is immediately after the election phase that all inert investors will come into action, allowing the real estate industry to boom at its best!

Watchful Moves from Home-buyers

The residential segment will remain moderate for home-buyers for the next four or five months. Despite the fact that much price appreciation can’t be expected for now, the buyers waiting for the right time will begin to finalise their deals in the first half only, considering that the latter half is going to register definite improvement. 

Experts are expecting the market to go upward in the beginning of the second half of the year. This is when investors and end users will want to capitalise on this chance of purchasing their dream flats in Zirakpur or at any emerging city. Residential realty capita values, obviously, will go high owing to a gradual stimulation in overall absorption.

What Other Than Elections will Change the Equation!

While it is true that the Lok Sabha elections are going to be the real name of the game, introduction of REITs, the due extension of the banking sector will be other major factors to have remarkable, positive impact on the real estate market in 2014.

The next six months will be quite deciding for the approval of new reforms for the expansion of the banking sector. This will clear the way for corporate debt markets and foreign competition, raising efficiency and boosting investments in the financial sector. All these events will collectively have a great effect on the realty market.

Healthier Growth in Retail and Commercial Segments

The second half of this year is going to be positive for retail and commercial segments in terms of a healthy growth. The expected fresh-supply addition of the commercial office segment within major cities in India till the end of the tear 2017 is over 140 to 150 million sq ft. All major enterprises will be confident to invest in these expansion plans, causing the absorption of new office space to increase by a huge margin!

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