Even as the transactions in the overall real estate sector will continue its upward trend in 2011,
home sales will slow down during the year due to a steep price rise, said a latest report by CB Richard Ellis, a global
real estate brokerage firm.
"In 2010, speculative investments and developer expectations have increased, thereby pushing prices upwards by approximately 30-40 per cent. Many developers have again shifted focus on the luxury segment in 2010, though it offers only limited demand," the report said.
"On the other hand capital values are on an upward trajectory in many prime locations, which might lead to a slowdown in sales activity in the short- to medium-term," CBRE said in its report.
Post-recession, the demand for luxury housing dropped and developers shifted their focus towards mid-segment products.
However, as the economy recovered, home prices went up by about 40 per cent in many metros, keeping buyers at bay.
The market has already seen home sales volume going down. Highlighting the trend for the official real estate, the report said that Mumbai will lead the Indian office space supply with more than 25 per cent share, followed by Bangalore and Delhi with 19 and 17 per cent, respectively, in 2011-12.
With approximately 47 million sq ft of stock, a substantial commercial supply of approximately 17-18 million sq ft is lined up till mid-2012 in Mumbai, the report said.
"India added around 55-million sq ft of office space in 2010 and is expected to add around 50 million sq ft in 2011-12," CBRE said.
The brokerage firm further said that real estate transactions, which were on the rise in 2010, will continue to increase in 2011 as well.
"This is due to sustained IT industry activity, the impact of economic recovery on new economy sectors, global optimism on corporate expansion, and a rise in income levels," Anshuman Magazine, CMD, (South Asia), CBRE said.
Courtesy: Mail Today
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