As economic growth accelerates, so does the demand for homes
Large real estate companies expect an increase of 15-20 per cent in their average price realisation (APR) by the end of calendar 2010, on the back of a substantial increase in demand for residential as well as commercial space. The first signs of this pick-up were already visible in the first month of the year, according to them.
“We believe the year 2010 is going to be far better than 2009. With the economy picking up, the residential market is going to see a steep rise in demand. We expect our APR to increase by at least 15 per cent in the next 12 months,” Lodha Group Director Abhishek Lodha said.
Lodha Group has 38 ongoing projects, of which 34 are residential. The company has priced the residential complexes from Rs 3,000 per sq ft to Rs 70,000 per sq ft. In the current year, they plan to launch six-eight new residential projects. In 2009, the Group sold space worth Rs 3,700 crore. This calendar year, it expects sales to go up to Rs 4,500 crore.
Delhi-based Parsvnath Developers is also confident of a strong 2010. The company is executing 57 projects, 90 per cent of which are residential. These projects are spread over 40 million sq ft. The company plans to deliver 10-12 million sq ft in the next 12 months.
“The year 2009 was not good for real estate players. But we definitely expect much better sales in 2010. At present, we have residential offerings in the affordable (Rs 1,500 per sq ft), medium (Rs 2,500 per sq ft) and luxury (Rs 7,000-12,000 per sq ft) categories. In 2010, we expect our APR to increase 15-20 per cent and this will primarily be due to demand and supply, GDP growth and government policies,” Parsvnath Developers Chairman Pradeep Jain said.
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Realty consultant Jones Lang LeSalle Meghraj (JLLM) confirmed significant demand generation both in residential and commercial segments in January.
“We believe the real estate market will witness considerable growth in 2010 and, from last month's enquiries, it becomes quite evident,” JLLM CEO Santosh Kumar said.
Kumar Builders, one of the realtors active in the Mumbai-Pune region, also feels the year 2010 will be far better compared with last year.
“In the last one month, we witnessed an increase in the demand for residential space. I feel builders are now focusing on matching these demands across the country,” Kumar Builders CMD Lalit Kumar Jain said.
At present, the company has 30 ongoing projects. In Mumbai, it sells residential plots in the 12,500-15,000 per sq ft range, whereas the range varies from Rs 3,000 to Rs 5,000 per sq ft in Pune. It plans to launch six new projects in 2010, including two townships, one information technology special economic zone and another large integrated project in Pune.
"We feel the APR in Mumbai will increase by around 20 per cent in Mumbai, compared with 2009. This is because of the demand generation we are witnessing. In Pune, the demand is more for affordable projects and we are planning to launch more of the same in 2010," Jain said.