Office markets are expected to grow in 2020 – 2021. Warehousing segments will also be seeing renewed interest. The Indian real estate sector is undergoing an evolving phase for some time. This trend is likely to continue this year as well. There are numerous reforms which have been introduced in the sector through changes in tax, regulations as well as in the business environment. It would be interesting to see if the current reform agenda will be continued with the new government after the elections & whether they will take them to the next level.
Rankings Released by World Bank
As per rankings released by the World Bank over the past two years, India has jumped a significant 52 position in Ease of Doing Business. Primarily, this improvement has happened due to improvement in six of the 10 categories which were assessed. One of these is dealing with construction permits that showed a massive jump in massive policy reforms.
Increase in Transparency & Accountability
Transparency & accountability have increased & which has caught the attention of institutional investors. They are now evaluating the real estate sector with renewed energy. It is also possible that Real Estate Investment Trusts (REITs) may take shape anytime soon. This will definitely help in improving cash flows pouring into the real estate sector.
GDP Growth Should Fuel Expansion
Firm GDP growth & sustained office demand should fuel expansion & further attract additional investments. The requirement of gross office space in 2018 has grown by over 20 per cent owing to renewed interest by banking tenants. Further expansion of technology companies has also helped achieve this growth.
Coming Together of Supply & Demand
Alignment of supply & demand for residential space due to urbanization, growing population, increase in disposable income & rise of nuclear families has fuelled demand for dancing. However, the increase in sales has been an issue, owning to price mismatch. This is the reason property developers are working hard to align sizes of residential units which are suitable for budget home buyers. Moreover, homebuyers nowadays are more informed. Affordable home buying henceforth will have enhanced traction.
The fate of Indian Real Estate Sector
The growth of real estate has been greatly influenced by the rapid urbanisation and a tremendous increase in the demand for properties, especially in metropolis. Cities like Hyderabad, Bangalore, Mumbai and Chennai have become a hub for real estate investment. This is mostly due to the high-speed influx of IT companies in these cities. Numerous real estate developers have lined up various luxurious and mid-range apartment projects to cater to the increasing demand for housing needs, especially of the working class generation. Buying a property in these cities can give you a great return on your investment. This is one trend that is changing the face of real estate, particularly, in the metro cities.
Fate of the Indian real estate sector will finally be decided by the results of the general elections. Several property developers normally tend to go slow on fresh projects before the polls. Even home buyers generally adopt a wait & watch approach. Nevertheless, it can be a good time for home buyers now to drive a hard bargain.
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