Expert Zone
Straight from the Specialists
Signs of recovery in real estate but challenges ahead
(Any opinions expressed here are those of the author, and not those of Thomson Reuters)
The year 2012 has been a rollercoaster of sorts. Inflation remained above comfort levels, the GDP growth rate slipped and so did the industrial output. The Reserve Bank of India doggedly kept the repo rate unchanged, barring once in April.
In real estate, while there were signs of recovery in 2012, many challenges still exist for the sector. Input costs have remained high and an acute shortage of skilled labour is expected to continue next year.
The government needs to build on positive steps taken towards meeting the challenges of affordable housing and urban development. Allowing external commercial borrowing for low cost housing and road construction; approval of 100 percent foreign investment in single-brand retail and 51 percent in multi-brand retail is likely to have a positive impact on the real estate sector in the coming year. But the focus should be on implementing these initiatives.
