Real Estate Prices Likely To Start Recovering In Select Micro Markets, Projects, Report

Property prices are likely to start recovering in select pockets and projects after remaining flat for the last 6-7 years. While developers will keep a close eye on how the inventory position pans out, prices may rise 4-5% on a compounded annual growth rate (CAGR) of over the next 4-5 years, said a stock broker Motilal Oswal Financial Services. The brokerage’s outlook on pricing is based on its interactions with property consultants and select real estate developers. It expects office leasing to remain muted over the next 2-3 quarters as occupiers are currently focusing on recalling employees back to office, which will take at least 4-5 months. The leasing cycle will return once global office occupancies are back to normal, which will take at least 2-3 quarters. Tenants are increasingly focused on employee hygiene and wellness, which means that demand for Grade-A offices will remain in favour, the brokerage said. While the near-term outlook remains muted, the long-term view remains positive as 50%/85% of global and domestic companies are expected to grow their real estate portfolio by more than 30% over the next 3-4 years.