Indian real estate market has shown a clear sign of revival after the formation of Congress-led UPA government with a clear majority at the Centre.Apart from the affordable housing sector, which has witnessed a surge in demand, office space too has registered fresh demand, which was almost at bottom for last one year, ever since the global economy went into a tailspin. Property Experts belives “In the 1st quarter of 2009, confidence and sentiment was low in the real estate market. The formation of a new government has improved market sentiments and this has resulted in an improvement in the demand of office space, especially in the small to medium segments. This is further supported by a substantial decline in rentals in the past one year.Because of tough market conditions and global slowdown, investments in Real Estate Sector got badly hit and this resulted in a slowdown in demand for office space all of a sudden, in the last one year. But, the fresh supply of office space continued as buildings launched earlier to meet the expected strong demand for office space were completed during the period, even as the global economy was facing what may be billed as the second worst recession in the last hundred years.
This slowdown had put pressure on rentals and capital value of office space in the country that led to correction in rental rates and brought them down closer to a more realistic level. In fact, corrections in the rentals have also helped in reviving demand for office space. Companies, experts say, which had postponed their expansion /relocation decisions due to negative sentiment are now ready to take advantage of the softened market. This positive aspect to all this has increased the leasing volume by 3-4 % in the NCR during the second quarter of 2009. The report says the increasing levels of corporate confidence should help Real Estate Sector and the momentum should be maintained in the second half of the year. Increase in demand for office space is a good sign for the economy, and also for the real estate sector. The opening of new offices means investment is likely to pick up, which will help revive the economy. At the same time, it also leads to creation of new jobs, which drives the demand for residential real estate.
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