Why one should be optimistic about Indian real estate?

As per KPMG report, the Indian real estate sector is expected to grow to $850 billion by 2028 which would be  13 per cent of GDP.  The real estate in India is one of the recognized sector and quite well-established globally. It is one of the mainstay of Indian economy and second largest employment generator after agriculture sector. The real estate sector basically comprises of four sub sectors- retail, hospitality, commercial and housing. The growth of this sector is compounded by the rising demand of housing, commercial spaces and offices for corporate and increases in travel and tourism.

This sector is going to be next big money spinner as well as employment generator as the Indian Diaspora is keenly watching it and enthusiastically investing in it for good of the sector.

We expect that the real estate in India is poised to take off from current gloom and doom as the economy is now showing a strong uptick of revival and faster growth buoyed by growing consumption and sustained corporate investment.

The compounded annual growth rate is expected to be around 11.3 per cent in this period and strong qualitative growth in hospitality, commercial spaces and offices will help to meet adequate infrastructure required to support India’s growth over a long horizon of time.

The office space absorption has grown 46 per cent driven mainly by two mega regions of Delhi NCR and IT hub Bengaluru. The real estate supply has also increased manifold primarily in Mumbai, Delhi NCR and Bengaluru among top three. The new advent of e-commerce has seen strong demand for real estate properties and products in recent years which strengthen the demand in the market.

Investment in real estate

The Indian Real Estate sector has seen strong cycle of investment in the period between 2000-2016. There has been strong growth year-on-year in the economy. The real estate is on top of charts in investment being made by business houses as well as rising middle class which now equals 350 million which is almost the entire population of United States of America. 

Few companies have already invested in the real estate in India. Likewise, Wanda Group has announced an estimated $10 billion investment in the real estate sector in Haryana for construction of an industrial city. The Trump group of Donald Trump, Presidential Candidate from Republican Party has invested in Trump Towers in Mumbai and has big plans for investment in India. The large real estate companies of China have also shown great interest in the Indian real estate market.

Government's push

The government has unveiled huge programs for the growth and rapid expansion of real estate sector by announcing schemes like ‘Smart City Project, Housing for All by 2022, AMRUT (Atal Mission for Rejuvenation and Urban Transformation) etc.

The government has also initiated and reformed policies like FDI (Foreign direct Investment) in real estate by allowing 100 per cent FDI, removed the scary 3 year lock-in period, the green norms have been eased for the early clearance and start of the projects, arbitration process has been made smooth as well as swift and the new Real Estate Regulation Act (RERA), 2016 is seen as a game changer. The act is a win-win situation for both the customers as well as the developers and further removing blatant use of unaccounted i.e. black money.

Miles to go

The rising middle class and mass migration from countryside to urban areas, expanding consumer base, all this will lead to high demand of real estate properties in India whether it is for housing, retail, hospitality and commercial. All the reputed global real estate consultants like KPMG, JLL and Cushman & Wakefield  are very optimistic about Indian economy and super bullish about real estate websites and market in India. The consultants are of the view that the need for urbanization is impediment for India’s economy to take its rightful place in the world economy.

Affordable Housing in India: Rise of a Relentless Real Estate Segment

Out of all the segments in realty market, residential property is the one that is stealing the limelight these days. It is because of the development process, which is leading up to the availability of innovative projects that are being admired by the buyers. After understanding this need, builders too are now investing most of their abilities to ensure that their projects are counted as favourites among investors. This ability to pick up trends is not only helping builders to adapt to current situations but also making sure that buyers are provided with exactly what they need. This mutual relationship is helping build India’s economy with the trends that are reshaping the real estate structure of the country.

Real estate properties in India have always been on the forefront of establishing new policies and reforms that are in turn proving out to be beneficial for the entire community. This vision has helped builders to move along with new regulations and work according to the given environment. Consistency in residential properties has impacted the overall growth of the Indian real estate industry and is now moving forward with affordable housing in charge of the complete segment.

Affordable property is now in the centre stage

After quite a lot of assumptions it was concluded that buying property should be economical and easy on the pocket for buyers. It is because most of the investors in metropolitan cities are those who have moved to the city area during the process of urbanization. Therefore, investors are now striving to buy housing property without spending a bomb on it. This perception has also helped builders to understand and react on the current market scenario, which is going in favour of the affordable property segment. 

Evolvement of businesses in Tier-II and Tier-III cities has not only increased the pace of urbanization but also provided an opportunity for real estate developers to ensure accessibility of projects for everyone. Although, buyers these days are interested to invest in almost all of the segments, affordable property is still a hot deal among entire community. A rapid development in India’s employment structure is paving a way for more organized workforce that is going to enhance the country’s financial situation as of now.

Need to move forward

From quite some time, India property segment has been stagnant and was not able to reap much benefit out of itself. This scenario has surely taken a new shape making real estate in India a lot more safe and suitable for those who have always been wondering about fluctuating market conditions. Being tagged as an unstoppable market segment, affordable housing is here to make big profits that are not only remunerative for buyers but also for investors for long haul.

The only ambiguity in this process is the lack of knowledge among builders who are most of the time concentrating upon cost effectiveness. This in turn is proving out to be a deal breaker for buyers as sometimes they are not offered a profitable deal altogether. Hence, even after a developer has gone through most of the ups and downs of this market, it is impossible for them to run away from an investor’s demands. This change of behaviour is going to make affordable and every other property segment more indigenous and in accordance with the regulatory system of India.