Small towns to stay realty firms preferred destination

Written by Preeti Parashar | Chandigarh | Updated: Dec 31 2010, 05:58am hrs
As demand for organised realty moves up, tier II and tier III cities are turning out to be the preferred destinations of growth for the developers. An estimated shortage of 26.53 million houses during the 11th Five Year Plan (2007-12) and the upcoming residential and commercial projects in tier-II and tier-III cities marks the next growth stage of the sector.

Cities to join the hit-list of developers include Jodhpur, Ajmer, Jaipur, Panipat, Kundli and Agra. Taking a look at the year 2010 and the coming year for realty, Bhim Yadav, CEO, Falcon Realty Services commented, In 2010 many tier II cities retained their prominent status and in fact people showed more inclination towards investing in these places. 2011 will definitely add more value to these places because work in these places will pick up pace. We expect 2011 to be a profitable year not only for the real estate developers but for the buyers as well as many affordable housing projects will be delivered in Delhi NCR.

The year also saw many realty companies in the redemption mode and others moving up the growth charts. Manpreet Singh Chadha, director, Wave Inc. observed, From second quarter of 2010, real estate started to see a turnaround which means a lot of demand and launch of projects to meet that demand. The focus has been majorly on affordable housing in 2010 and it is expected to remain so in Noida and Faridabad. The demand has outstripped supply and developers in 2011 will keep trying to meet that demand or reach near that. Prices might not reach a very high level in 2011 but sales are expected to increase.

As per a latest report of Jones Lang LeSalle, t he year 2011 should see more wealth being created across industries in India, which will trickle down as demand for real estate.

It is expected that the absorption of office space across the top seven cities of India will grow nearly 1.8 times from 19.6 million sq ft recorded in 2009 to 35.7 million sq ft in 2011. Residential property rates have attained the previous peaks of 2008 across several markets. The year also saw an increased number of launches in the premium segment, mostly in the Mumbai market.