Maharashtra has attracted an outstanding investment of Rs. 3 lakh crore in real estate, which is highest among states in India. However, the slowdown in real estate was visible as new investments in this sector dropped by 55% to Rs. 7,000 crore from Rs. 16,000 crore the previous year.
These are the findings of a study conducted by Associated Chambers of Commerce and Industry of India (ASSOCHAM), which tracked the investments in the real estate sector.
DS Rawat, national general secretary, ASSOCHAM, said, “The realty sector accounts for over 11% share in total outstanding investments worth over Rs. 122 lakh crore attracted by different sectors from various public and private sources across India. However, the new investments in real estate have dried by over 54% as the sector has been jostling with slowing sales and rising inventories.”
Maharashtra, Gujarat, Haryana, Karnataka and Andhra Pradesh are the top five states with highest shares for attracting maximum outstanding investments in the real estate segment across India. Besides, these five states account for over 70% of the total outstanding investments attracted by the realty sector across India.
But it was Gujarat that emerged as the leading player, attracting maximum investments in the realty sector — over Rs. 17,000 crore in March 2013, from just over Rs. 2,000 crore the previous year — registering a growth of over 730%.
According to ASSOCHAM, the realty sector has been plagued with several issues. “Various problems like falling sales, rising construction costs, a dampened market sentiment overall, sluggish economic growth, high interest rates, high inflation and poor industrial production, and a general slowdown in various industries has hit commercial real estate,” said Rawat.
He added that developments like the parliament’s approval of foreign direct investment in multi-brand retail could boost foreign investments, which would ultimately boost the demand for commercial real estate in the country.