‘Realty sector to take another 24 months to revive’April 30th, 2009 - 7:49 pm ICT by IANS
New Delhi, April 30(IANS) The slowdown is going to continue for the Indian realty sector and it may take 24 months to see revival, say industry experts.
“The Indian realty sector will take about 24 months to see any revival,” according to Sameer Nayar, managing director and head of real estate (Asia Pacific) of Credit Suisse, a leading financial services company.
“There is a sort of standoff in the market where both the seller and buyer are not happy with the price. So no transaction is taking place. This may continue for two more years,” Nayar said.
Maintaining that developers need to make a “realistic assessment” of the market before launching a project, he said: “What we need is not five star hotels or costly condominiums but middle market flats and low budget hotels.”
There is still lot of demand in middle segment housing in the Rs.20 lakh-Rs.50 lakh bracket “where developers should focus”, Nayar added.
According to him, there is a also huge disconnect between supply and demand in the office space.
“For example, in Noida the supply of office space is more than the actual demand. I feel it will take two years to occupy the spaces supplied if the economic growth comes back to normal,” he said.
But as per his assessment, what will decide the survival of developers is the delivery of projects on time.
“Unless the existing project is delivered on time, no further approval should be given for any fresh projects,” Nayar said.
He lamented the fact that there was no real focus on the realty sector while everyone talked of the IT sector, which constituted less than one million jobs in India.
“Construction and real estate sector provide maximum employment in India after the agriculture sector. But still, there is no real, comprehensive policy framework in this sector,” Nayar added.
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