By Vipin Agnihotri
There is lot of pressure on the Indian residential realty segment because of abundance of realty projects coupled with increasing interest rates and hike in inflation. In my opinion, fast rate of urbanization, increasing incomes, and growth in the number of nuclear families are some of the reasons that has resulted in the residential real estate demand in India.
Taking this into account, wide array of realty developers has announced their projects in various locations in the NCR region. However, experts believe that the residential value across the country will remain under pressure and few markets could witness a correction to the tune of 15 to 20 percent over the medium term.
It has come into the notice of The India Street that there has been a correction of around 15 percent on an average in the capital market values of land across NCR, with the dip being attributed to the decrease in the number of property buyers in the market.
Recent research has come to the conclusion that over the next few years, close to 530.5 million sq ft of residential space would be developed in Grade A and B category in seven prominent cities of the country. Point to be noted here is that most of the housing shortage in the country exists in the low-income group and economically weaker section.
In terms of statistic, NCR region would have around 191.42 million sq ft of residential space by the year 2009-10. Of this, around 16 percent would come up in the present year and 20 percent in 2008.
If experts are to be believed, the proposed airport at Jevar and other infrastructural developments make Greater Noida an attractive residential destination and is next only to Manesar in terms of planning. When you add this up with the Taj Express Way, there is no doubt that the approach to the region has become convenient.
The south west region of NCR, which includes Bhiwadi, Dharuhera, Rewari and Alwar has plenty of residential projects lined up to be finished by 2009-10, is grappling with the issue of inadequate infrastructure, which has kept the demand muted.
In my opinion, a correction of around 15 percent in the capital value of land across NCR can be attributed to the decrease in the number of property buyers in the market. Number of measures from the Reserve Bank of India has squeezed the real estate market both from the supply and demand side.
No doubt, these measures have curbed speculation to a great extent, yet the end-user driven demand has not been affected much and property transactions are still taking place in the market, though in a far lesser number.
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