Hariprakash Pandey, the vice president of finance and investor relations at HDIL, a developer based in Mumbai, talks about the trends in India’s property market.
Are property prices in India likely to fall further?
We do not think there is a continuous downwards pressure on the property prices. A developer cannot afford to sell his property at a loss. A typical developer is in a position to wait and watch the situation and allow the economic environment to improve rather than sell it at throwaway prices in desperation.
What kind of impact do you expect the 2014 general elections to have on the property market?
Typically during months leading up to the elections, the government does not push for major projects and decisions. Hence, economic activity slows down, and real estate is not an exception. Whatever be the result of the elections, the property market is going to pick up as it is expected that there will be a certainty for the next five years.
Have you noticed an increase in the number of non-resident Indian buyers, and do you expect this trend to continue?
We get a good number of enquiries from NRIs especially from the Middle East. A good chunk of our flats are bought by the NRIs. We expect the demand from NRIs to increase in 2014 as the global economy stabilises.
What are the major concerns and trends for developers this year?
Concerns of an indecisive election, with none of the dominant parties getting a convenient majority. A control on inflation, with the Reserve Bank of India not clear on the inflationary behaviour in the future is another cause for concern. An important trend emerging is increasing development of the outskirts of the cities. As the [urban] population becomes saturated, the new incoming population will look for affordable homes [nearby]. Thus we expect affordability to drive the growth in 2014. The funding situation for the sector is improving as private equity investment in Indian property has registered a considerable growth. The prospects of real estate investment trusts becoming a reality will be another encouraging factor.