Housing Segment - An Overview

Acquiring or building a home has always been on top of the list of ambitions for every Indian subsequent to a gainful employment or expansion of his family. Significant uptrend is noticed in this approach since the beginning of the 21st century, supplemented by increase of disposable income in the hands of young Indians. Growth of Information Technology Business has added further imputes to the above trend, and cities and towns are growing vertically and horizontally to cater to the demand for new homes.

RESIDEX index of NHB for the quarter Apr-June 2012 reveals that the Hosing segment grew sharply during the last few years, of course rates being uneven among various cities and towns. During July- September Quarter of 2012-13, RESIDEX Index rose in 9 cities, in which Kochi had the highest growth of 10.1 % and Mumbai the lowest at 0.5%. The Index declined marginally in 11 other cities. RBI Housing Price index (published quarterly based on recorded data) reveals that property price grew at 79.9% which is higher than the growth of SENSEX (20.3%) and CRISIL Composite Bond Price (19%), 2nd only to Price of Gold which grew at 81.6% during the last 3 years. RBI Housing price for the 1st quarter of 2012-13 shows a 6.7% quarterly increase and a YOY increase of 24.1%. Recent surveys also forecast strong demand of around 40% during 2012-2014 in the affordable housing segment and a double digit growth for the housing segment in general.

Drivers for the economy are the present state of infrastructure and its expansion (both social and commercial), and also the demand for commercial space for job creation. Above factors are very much present in the top six cities recently suggested for investment in residential property, which includes Chennai and Bangalore and Hyderabad in South Indian. As far as Kochi is concerned city's Real Estate market is expected to see significant growth, along with the development of Vallarpadam international (shipping) container terminal, Technology Park and Cochin Metro Rail. Further, Emergence of Kochi-Coimbatore-Thiruvananthapuram as a metropolitan hub is another positive development in the Region.

RESIDEX Index of NHB for the quarter ending December,2012 reveals a a double digit growth during April- December, 2012, in Bangalore, Delhi and Kochi. Further, growth During Sept- December,12 quarter was 8.16% in Bangalore, 9.55% in Delhi and 8.75% in Kochi., whereas in Chennai, it was almost stagnant. Since, Bangalore, Delhi and Kochi are having steady growth in the segment it may be prudent to investment in housing in these cities.

In view of the above, we may conclude that in spite of the economic meltdown elsewhere and the slowdown in various other sectors of Indian economy, investment for buying a house is promising as a large percentage of Home buying is for residential purpose. Investment in Pre (soft) lunching Projects is also good as the Value will definitely appreciate along with the progress of the Project and passage of time. However it is prudent to select those projects of reputed Builders at locations where the potential for appreciation in value is good. Further, as the land is registered in the name of the Buyer initially and construction of the building thereon is done thereafter, on behalf of the Buyers, investment in villa projects is much safer for the buyer than investment in a high rise structures.

However, concerns connected to home buying are manifold. Potential Home Buyers registered with us can have a Comprehensive guidance on the whole subject in our E-Guidance, available at our Website, enabling them to address those issues with confidence.