Real estate market on tight belt

The interest on several land has increased in Gurugram. On an average, a land-lot acquired for Rs 25 lakh an acre in 2003 was called at anything from Rs 6 crore to Rs 15 crore an acre in 2013. Also, several broker's offices for dealing with real estate business have shrunk in number, not just in Gurugram but in Noida and other places. NCR has now become a place of delayed projects of apartments.

While demonetisation and economic slowdown in the country altered the overall real estate sector. With the government taking over management debt ridden builder Unitech and big brands such as Jaypee going into insolvency and many more including Amarapali, Supertech and Ansals coming under criminal proceedings, the real estate sector in our country it's currently at the depression phase of the business cycle. 

Market estimates suggest that almost 150 real estate promoters had to go to jail just because they had created some violation or the other in the past couple of years. This previous statement does not mean that there is no competition left in the market. Developers like Godrej Properties, Mahindras and Tata Housing is spread out in NCR at various price ranges including luxury offerings. Developers like Vatika, M3M and ATS are also doing reasonably well in real estate.

The property market across the country requires assistance and guidance and also help from the side of the government, regulatory authorities, judiciary and financial institutions so that the decline in the past decade is not going to repeat. The introduction of Real Estate Regulation and Development Act (RERA) has been a confidence building measure, but the opportunity remains limited. DLF had been listing out steps taken to beat the financial stress and cut down on their liabilities and debts. They have been concentrating on completing projects and focused on leasing, also they cut down their expansion policies.

93 billion dollars (Rs 6.63 trillion) was accounted for 80 per cent of share of the total real estate loan for Mumbai Metropolitan Region (MMR), NCR and Bengaluru together. There can be multiple reasons for this current state of real estate segment. The demand-supply mismatch between the customer and the developers were a prime reason for depression in real estate segment. The growing residential demand of people from other cities also added to the reason. The next reason is that the government's focus on affordable homes took away the space for luxury housing. Funding to developers from banks, non-banking finance companies as well as housing finance companies is frozen. 

The general tendancy of public is to save money to the maximum, thereby, never investing in real estate. Therefore, it is expected that investors won't be interested in real estate and unless these investors do not return this year, the real estate sector would not revive. Although, there might be a revival point in this sector when buyers would feel that there is no possibility of getting cheated. And this moment of revival won't be in the near future.