Planning to invest in real estate in 2011? Be prepared for trickier investment options than 2010, say experts. While property valuations in India as a whole rose by around 20% in 2010, the appreciation was around 50% in Mumbai and the National Capital Region.
According to industry trackers, short-term investors may not gain much, but returns are likely to be attractive for long-term investors. “In the first quarter, correction is expected, so buyers should first wait for that,” said Pankaj Kapoor, CEO, Liases Foras, a real estate research firm. “So if an investor invests after that, and goes long on his investment for more than a year, he is set to gain out of it.”
“Mumbai is ideal for mid-segment residential investments and Gujarat for industrial real estate. Investments in these options will fetch returns of 15% to 20%, said Anuj Puri, country head, Jones Lang LaSalle India, a real estate consultant. Mumbai and the NCR have recorded a steep price rise since 2009. Central Mumbai, where most of the luxury projects are planned could see the sharpest fall, industry analysts said, although no developer has reduced the quoted price till date.
Volumes in the residential real estate space could reduce but prices will not fall, said Anshuman Magazine, chairman, real estate consultaning firm CB Richard Ellis.
The luxury segment witnessed a lot of growth in 2010 with many real estate developers launching projects. The year 2011, however, could see the middle segment getting a boost. “Demand for mid-segment residential units in Mumbai is far greater than the availability and future supply, therefore growth is expected in 2011,” said Puri.
“In 2011, actual users may not be able to enter the market as loan rates are already high, combined with high registration and sales tax. So only investors may invest,” said Kapoor.