Between January and June 2011, PE investments in real estate reached $44.40 Cr, 47% higher than the investments made in 2010 during the same period. And, most of the investments are coming from realty-focused funds, says the joint report.
Highlights
* Luxury housing, it notes, has taken a backseat and affordable housing is gaining momentum due to the liquidity tightening by the RBI between March 2009 and November 2010, developers sold more than 4 crore sq ft of mid-income residential property in the NCR (National Capital Region) alone.
* Property price was to climb further on the back of rising raw material cost, labour shortage and rising interest cost, which is putting pressure on the profit margins of the developers, the report said. The latter increase would not only increase the monthly payment, but also increase the cost of construction, ultimately impacting the selling price of apartments.
* Indian real estate industry is grappling with a labour shortage of 30-35%. The situation is expected to worsen in the next decade when demand is expected to rise three-fold.
* Possible FDI in multi-brand retail would lead to increase in rentals. While consumer spending has increased, rentals continue to remain under pressure due to excessive supply.
* Bengaluru is set to witness increase in rental due to lowest vacancy rate and over-supply, while Noida may not experience an increase in rentals due to high vacancy rates.
* Mumbai and Delhi are the undisputed leaders in all forms of real estate, but due to scarcity of land, rising rentals and capital value, developers and industries are targeting Kolkata, Pune and even tier II cities such as Mysore, Chandigarh and Jaipur.
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