What are the important real estate themes that are expected to emerge in 2010?
2010 will shape as a year of cautious optimism. In our opinion 2010 will exhibit characteristics of 2002 & 2003. Some important real estate themes of 2010 shall be:
1. Residential sector will grow – Demand for residential homes will continue to rise but the pace of growth will get muted compared to last few years. It is difficult to project the exact growth but one should be happy with a CAGR of 25–30 %.
2. No major change in property prices – The property prices are projected to move in a narrow range and will not see any major fluctuation either on the up or down side. The demand would be highly elastic i.e., every attempt of a price increase will be met by a fall in demand
3. Affordable housing will constitute bulk of demand - The major share of the demand-pie will continue to be in the affordable (<40 lac) segment.
4. Ready-to-move-in high on demand – Home buyers are likely to prefer “ready-to-move-in houses” over “new project”. This will hedge their risk against delay and defaults.
5. Accountability & transparency will improve – Known developers, with proven track record of project delivery, will find favor over less established ones. There will be a positive competition among developers to focus on project completion and customer engagement. Overall there will be an increased effort to be seen as being transparent. We will see more real estate companies getting listed on the stock exchanges bringing in more accountability and transparency.