Real Estate market in India 2014

2013 was soaked in unprecedented challenges majorly including subdued sales, heaps of unsold inventory and builders going bankrupt. Will such things continue to exist in 2014? Keeping in mind the economic and political instability, the answers might vary. It is always challenging to forecast Indian markets be it grocery or real estate. But the concerns are candid as mentioned 

below:.

• §  High Inflation
• §  High Consumer price index
• §  Bank lending rates unchanged
• §  Purchasing power of people tumbling
• §  Higher Construction costs
• §  More Pre-requisite raw materials for construction with Government norms refreshed each year
• §  High Taxes
• §  Political uncertainty
• §  Frauds

In spite of the aforementioned trepidations, the Indian soil still remains a favorite for investors. The factors could be increasing migration to the cities which will outpour in the coming years, which, coupled with growth in employment, education and health care, will push the demand for residential and commercial space. One more spike of positive energy in this sluggish sector springs from the fact that the sales though slow have never been stagnant.

Most real estate professionals have a highly undivided opinion on the fact that the sector will start shining only in the second half of 2014 as and when there will be clarity on a new stable government. This in fact is expected to boost investment and kick-start the economy afresh.

Consumer confidence might still remain subdued in the first half of 2014 due to ambiguities surrounding general elections and macro-conditions. But post elections, cliff hanging investors are likely to take the energized dive. The increase in absorption of residential units will help reduce the currently large inventory holdings of developers. According to Websqft report, residential prices are expected to raise 10% approx. during 2014. The locals’ general prediction says, interest rates will be high in the first half of 2014 but will go down in the second half. When rates go down, sales will happen and absorption will improve.