Affordable housing & retail to lead realty in 2010

Going by the market sentiment, realtors’ assessment and expert analysis, the residential segment will be fuelled by the mid-size, affordable housing category, while retail spaces are seen spurring the commercial segment.

All those who focused on the premium segment earlier found their sales dwindling during the meltdown. However, the middle income segment was relatively less impacted by the crisis giving way to the much-hyped — concept of ‘affordable housing’.

Developers who got their product right in terms of pricing, size and amenities were able to find buyers and this is expected to continue in the coming year. And, retail, which had fallen prey to the realty boom just before the crisis, is expected to help commercial realty gain ground this time around. With an ever increasing supply, relators believe, that launches in this segment will come by quicker than in other commercial segments.

Speaking to Deccan Herald, Vaswani Group Managing Director Neville M Vaswani said that there will be a strong comeback through the mid-sized segments, while luxury housing segment is also expected to grow.

Market recovery

Pointing out that there is recovery in the commercial market as well and that it is also set for a few launches in the coming year, he said “in the last few months both the central business districts (CBD) and the suburbs are witnessing buying and leasing activity,” observing this is just a pre-cursor to 2010.

Knight Frank India Private Limited Vice-Chairman & Managing Director Pranab Datta said “Crises generally make way to newer trends, and often, such trends become survival strategies for players. Affordable housing is one such trend which is expected to continue to grow in the 2010.”

On the commercial front, he said “one cannot rule out the likelihood of more retail launches after the first six months. Retail stocks are getting consumed fast since current rentals are at rock bottom lows. As stocks get exhausted and prices become firmer, developers may look at reviving some of the abandoned retail projects or initiate new launches.”

Similarly, former Jones LaSalle’s Meghraj President & National Head (project management) & Usha Breco Realty  CEO, Uday Dharmadhikari believes that while the commercial segment correction will come on the demand and supply front, residential realty is set to see a boom in mid-sized segment with more and more launches in the pipeline.

Puravankara Group CFO Ravi Ramu, while echoing similar views, however, believes that the customers will go in for quality delivery and good pricing.

However, demand is expected to rise across segments, as the benefits of the two stimulus packages, corrected property prices and lower interest rates coupled with regained confidence among salaried professionals are already signalling recovery in the segment.

Meanwhile, realtors aver that the liquidity situation in the market will continue to remain in lull for the first few months, but recover subsequently as the economy continues to post stable growth figures and there is increased confidence in the market.

Likewise, the prices are also expected to continue of current levels and rise in the second half of 2010, while not too much change is expected in the interest rates. “A maximum of 25 basis points may be raised after the initial quarters, but nothing beyond that in 2010,” they said.