Real-estate sector may witness growth in volumes, but not prices
November 20, 2009
The real-estate segment, which is gradually coming out of the slowdown, is expected to grow at a 35% compounded annual growth rate (CAGR) over the next five years. The segment reported a negative growth till March 2009 and slowly started showing signs of improvement during April this year. Industry experts feel that the slowdown is a thing of the past for the residential real-estate segment, but commercial realty will take another year to revive.
Developers are reporting sales in the residential segment and do not have plans to jack up property prices as they witnessed the consequences of such short-term price increases in the past. “I don’t think the prices of the properties have increased by more than 10%. The prices are not increasing to the extent to which it is being represented. I don’t anticipate an increase in price but I do anticipate a huge increase in volumes over the next five years,” said Niranjan Hiranandani, managing director of Hiranandani Constructions.
“My gut feel is that the demand for real-estate in the next one year will go up at least by 30% in terms of volumes. I think in the next five years, it will be a CAGR of 35%. Of course, the growth will be in the affordable housing segment. By the end of the year we will see a 30% growth,” added Mr Hiranandani.