In the last seven years, real estate has not only attracted developers and investors but also reputed companies, high net worth investors, small and medium business houses, family offices and foreign investors. Those who missed the bus before 2007-08 have joined the bandwagon in or after 2009. Lack of investment opportunities elsewhere is also the reason for this rush to real estate.

This is one sector where delay has not been always detrimental to the project since the property could get re-rated and developer could gain due to delay in project, provided the project is not leveraged. Stress in this sector is project-specific since each project has separate balance sheet and any project that has sold 25 to 35 per cent of its properties is not likely to be under stress. So micro market stress may not reflected in specific projects.

Prices firming up

My wish for this sector is that obstacles are removed by providing a single window clearance from development authorities. Prices firm up due to delay in approvals resulting in delayed supply.

Cost of capital is high and long term funds are not available easily even for long gestation projects like townships and Special Economic Zones.

Having summarised the woes of consumer and inefficiencies of the sector let us also understand that since many new players will be joining the fray, there will be more launches in every major city in 2013.

In the recent past there has been more focus on upper mid segment and luxury apartments. But to make these more affordable developers will also start focussing on lower or mid segment where there is pent up demand.

Developers with execution capability, track record of timely delivery, focus on quality and post delivery maintenance will be rewarded far more than others. A developer who respects every stake holder- customer, vendor, lender and investor will be the darling of all.

(The author is MD&CEO, ASK Property Investment Advisors Pvt. Ltd. The views are personal)

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