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Real Estate Demand to rise in Second Half

No Comments Sub Category:Real estate trends,Realty News Posted On: Jul 09, 2014

Latent demand in real estate is set to increase in the second-half of the year, and especially in FY 2015, predict analysts. Realty stocks are lately registering a good response in expectation of a revival in property demand and clarity in tax structure with respect to the REITs. BSE Realty Index and Sensex have risen 44% and 24% respectively, over the past six months.

Consumers have been keeping away from the real estate market these last two to three years. Demand in key property markets of Mumbai and Delhi has remained weak during this period. The contraction in property demand in key markets, especially Mumbai, has caused reluctance in the minds of developers to start new projects. But this is about to change soon, as property registrations have begun to increase since the election results have been out. Residential demand prior to economic recovery is expected to be very strong.

The developers are well aware of this trend, as some of the top realty players are now raising resources for developing new projects. Godrej Properties recently spoke about their new residential project in Gurgaon, while Ansal Properties is planning to invest Rs 130 crore in a new SEZ in Noida. Oberoi Realty and Kolte Patil are also expected to launch new projects in the future.

The budget is also set to influence matters positively, if the tax structure for REITs is clarified. Large commercial developers like Prestige and DLF will benefit if trusts are exempted from paying the dividend distribution tax.

Source: Business Standard

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