The real estate sector is one of the most globally recognized sectors in India. It is also the second largest employer after agriculture and is expected to grow 30% over the next decade. The real estate sector comprises of four sectors namely- housing, hospitality, retail, and commercial. The Indian real estate sector has been going through a major transformation in the recent years, recently now with the introduction of new policies by the Government. The economic reforms continued throughout 2017, including the introduction of RERA and the imposition of GST. The real estate industry is recovering and many favourable trends are likely to emerge in 2018 and 19. Let’s explore.
- Increase in Foreign Direct Investment: The Foreign Direct Investment (FDI) in India will increase according to the World Investment Report. India has been ranked fourth for FDI inflows for trade and development. The real estate sector in India has currently attracted $32 billion in private equity up till now.
- Increase in demand for 2 BHK and 3 BHK segment: This year there will be an increase in demand for 2 and 3 BHK housing projects. People will be ready to move into properties which do not have any issues related to compliance.
- Real estate developers to improve their business model: With the enactment of the Real Estate (Regulation and Development) Act, a deadline has been set for projects to be completed to avoid any penalties. The real estate developers will also have to revamp their business model. This is to ensure that the projects are completed within the given time frame and bring more transparency and accountability in the system.
- Demand for homes in big cities on the rise: The demand for homes as well as prices in the big cities is on the rise. Investors are interested in buying both commercial and residential real estate properties. New projects are expected to start in big cities as well as suburban areas. To lure buyers, real estate developers are focusing on constructing apartments with green building facilities. The Government is also likely to come up with schemes to provide homes on a budget. There will be a rise in the demand for luxury homes in the coming years.
- New asset classes to push the real sector further: Various alternative and new asset classes have emerged in the Indian real estate sector such as specialty hospitals, short-term stays, student housing, and aged care facilities. These sectors are showing signs of high growth and promise to push the sector further with investments by domestic and foreign investors.
- Positive impact on the commercial office market: The demand for a commercial office space in various cities in India is also growing on account of improvement in industrialization and trade opportunities. In 2018-19, the demand for warehousing is also expected to increase manifold. This will have a positive impact on the commercial office market as well as other sectors.
- More joint ventures in the real estate sector: This year, there will be more joint ventures in the real estate sector. There is an increase in the number of real estate developers and projects, but a dearth of customers has led to mergers of different developers. There will be new investors as the price-earnings ratio will become better.
The Indian real estate sector is one of the most globally recognized sectors. 2016-17 saw a few changes in policies that included GST, demonetization, and implementation of RERA and REITs. With these reforms, there is a huge possibility that 2018-19 will be a glorious year for the Indian real estate market. If you are looking to buy property in Mumbai, there are many upcoming Hiranandani builders. Hiranandani Fortune City is an integrated township project that offers property options such as 1, 2 and 3 BHK apartments. It is also developing commercial and residential township projects in Chennai and Alibaug.