Year 2016 is likely to begin on a cheerful note on the back of reforms and increased investor confidence
Relaxed foreign direct invest ment (FDI) policy and bullish trend in the absorption of commercial real estate is likely to turn around the residential real estate in the New Year.
The government's policy of improving the infrastructure of a number of cities through the “100 Smart Cities“ programme and providing affordable homes on a mass scale through “Housing for all by 2022“ programm is expected to ramp up growth and drive the sector. There is some disappointment that the Real Estate Regu latory bill could not be passed in the winter session of Parliament, but there is hope yet that it will see the light of the day in the New Year.
All these will go a long way in instilling confidence among buyers to invest in the market. Thus, Year 2016 is likely to begin on a cheerful note o the back of reforms and increased investor confidence.
Anshuman Magazine, CMD of CBRE South Asia Pvt Ltd, says: “The new FDI norms will help foreign capi tal enter the sector, which is acutely starved of fund. This is likely to provide the much needed push to rejuve nate growth in the real estate.'' Sanjay Dutt, MD (India) of Cushman & Wakefield, says: “The commer cial office sector gathered momentu with some large leases and buy-out transactions during the year. Companies are firming up expansion and consolidation plans, leading to an increase in leasing activity as they foresee higher potential and increasing business activity. This will certainly result in fresh demand for residential units.“ Around 5.8 million sq ft of office space was taken on rent by various companies in the first three quarters of 2015, a report said. This alone requires a fresh batch of 60,000 people to occupy. Going forward, activity in the office sector is expected to intensify with supply likely to see a spurt in 2016, Dutt said.
Overall, the next five years may see new strategic partnerships with developers and private equity investors, too, looking at liquidating assets, Dutt said. All these developments are likely to improve the supply and efficiency in the sector, thereby bringing down prices to the affordable range.
Anil Sharma, CMD of Amrapali Group, said: “With several big announcements from the government in 2015, things have gradually started gaining momentum. Year 2016 will turnaround the realty sector.“
Prashant Solomon, MD of Chintels Group, said that demand has started picking up and with various measures taken by the government, the sector is hopeful of a better year ahead.