Millennium's Decade By: Abhinav kumar

Realty sector in India saw a paradigm shift in first decade of the new millennium with unprecedented residential, retail and commercial realty boom. Indians in metro cities also got a taste of the 'malls' - and shopping may never be the same again, writes Prabhakar Sinha
The decade, which is coming to a close in a week's time, saw a rollercoaster ride - though it started off full of uncertainties and a negative outlook, it is ending on a note of hope and positive outlook. Despite a slow start in the first two years of the new millennium's decade, the real estate sector witnessed an unprecedented growth during the period. In almost all the major cities and towns of the country, real estate sector was on a high-octane drive, both in the capital values and in the construction activities.
The NCR region, in particular, was witness to a number of new areas being developed during the decade. Prominent among them, to the east of Delhi, are Indirapuram, Vaishali, Vasundhara, Raj Nagar Extension on NH-58, Crossings Republic, areas on NH-24 beyond Hindon, Noida Sector 44, 93A and B, and Greater Noida. Towards Gurgaon also a number of areas like DLF Phase II, III and V, Sushant Lok, MG Road, Sohna Road, Golf Course Road Extn have come up. Towards Faridabad, areas like Nahar Paar and Suraj Kund Road were in full bloom, while towards north, residential areas have been developed right till Sonepat.
Along with residential houses, retail commercial activities also witnessed a paradigm shift during the period. The advent of malls in particular, in the last decade, changed the way people shop in metro cities.
In fact, this decade has seen a momentous change in the mindset of the people of NCR. Till 2003-04, people's first preference used to be a house in Delhi, even if one had to compromise on space and other amenities. But, with the development of condominiums having amenities like swimming pools, gyms, car parking and hi-tech security gizmos, things have changed. You will find apartments being sold for Rs 3 crore in the suburbs. Because of the lifestyle that new condominiums are offering to residents, many people now prefer to buy houses in the suburbs. The main reason behind the robust growth in the real estate activities in metros is the strong growth of Indian economy during the decade. Between 2003-04 and 2007-08, economy continued to grow in the region of 8%. Barring the first three years from 2000-01 and 2002-03 of the decade, when the GDP grew at 4.4%, 5.8% and 3.8% respectively, the decade witnessed a strong growth. Even, in 2008-09, which was badly affected because of the global slowdown, the GDP grew at 6.7%. In the current year also, as per the government's projection, economy should grow at around 7.75%. The per capita income of an average Indian during the decade more than doubled in the first nine years - from Rs 15,881 to Rs 37,490 - at the current price. If the country achieves a growth of 7.75%, with an inflation of 6%, the per capital income will go up to around Rs 43,000.
On top of this, the services sector with an even stronger growth, at around 10% per annum during the decade, provided huge stimulus to the realty sector in the cities. The rise of IT and IT-enabled Services (ITeS) in the country helped raise the income of city dwellers considerably during the decade. As the income rose, individuals decided to buy their 'sweet home', even early in their careers.
The easy availability of home loan coupled with fall in the interest rates further fuelled the growth in the sector. In 2003, the home loan rate came down to as low as 6.5% per annum. This brought down the average age of borrowers buying a house, from mid-forties to late-twenties. These developments led to a spurt in demand for real estate during the decade, which led to a rise in property prices, by up to 500% in NCR.
At the same time, the rise in the interest rates in 2007 and 2008 to over 12% per annum affected the affordability of buyers, which affected the sector badly. The onset of global financial crisis in September 2008 brought real estate sector to almost a grinding halt. As the crisis affected global economy, with developed countries going into recession, it was thought that India would also face a similar fate. But, timely action of the government in providing a stimulus package to the economy, coupled with the lowering of the interest rates, put the economy back on the revival path.
With this, the real estate sector also gained momentum in 2009. The good thing is that the slowdown in the sector made developers change their strategy. Instead of building premium class houses and apartments, where the profit margin used to be high, they turned towards constructing affordable apartments with low margins but in high volumes. Therefore, it would not be inappropriate to say that the new decade is starting with a ray of hope and opportunity. A number of new areas are going to come up. Particularly, the idea of township is going to mature in the new decade, where all the facilities - from shopping complexes to schools to playground - would be available at a walking distance. Not only this, many of the townships would be big enough to have office space as well, where residents can walk to work.
A number of townships are already being implemented. The Crossings Republic, which is being developed on the outskirts of Noida, has almost sold out. Besides that, a number hi-tech cities are being developed by DLF, Ansal, Omaxe, Unitech, Ireo and Vipul, among others. The improvement in road and rail infrastructure in the NCR will be a boon for the real estate development here. The extension of the Metro Rail to Noida, Ghaziabad, Gurgaon and Faridabad will be of great import to push growth in the sector. There are talks to take the Metro even farther, which will provide greater impetus to the realty sector.
Courtesy:- Times Property dt:- 26/12/2009




















Hi,
I am Abhinav Kumar.
I am working in Bhardwaj Buildtech Pvt.Ltd. Company as SEO.
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