Real Estate is now a billion dollar industry in India. Up until a couple of decades back, real estate was not a business sector to be reckoned with enormous earnings of money. House has always been a necessity for human species as it provided them shelter protecting them from natural changes in weather and a roof above to sleep in and stay with family. The man usually bought a plot of land and built a house to accommodate the family and provide them with a shelter of a lifetime. It was simply restricted to just buying and selling without any involvement of commerciality.
However, the real estate trend has undergone a significant metamorphosis since the past decade with the introduction of gated community apartments and luxurious housing projects. Industrialists and entrepreneurs have been investing crores into the real estate sector for huge returns in profit. The reformative steps brought into the real estate sector in the form of RERA, GST, REIT (real estate investment trust), Benami transaction Amendment Act and Pradhan Mantri Awas Yojana have further escalated the pace at which the real estate sector has improved. With these policies introduced by the Government, the real estate sector is now much more transparent with financial discipline and increased efficiency; as a result of which this sector has seen new heights in terms of transactions. In Q2 of 2018, there has been a 50% jump in new housing projects (compared to the preceding quarter) across the seven top cities of India. The growth is noticeable in the sales front too with 24% more sales than Q1 (2018). This shows that prospective home buyers had been on an observant mode and waiting for the right time to buy their dream home. Also, real estate sellers were looking to clear their unsold property with attractive schemes and offerings like freebies, discount on GST or a rebate on the overall property price.
Also Read: The impact of social media on home-buying decision
The present Government’s vision of Housing for all, 100 Smart Cities, Amrut Cities and Industrial corridors like the Delhi-Mumbai Industrial Corridor (DMIC) by 2022, needs an investment of 4 Trillion USD. Research about the Indian Realty market says that due to affordable housing options and co-working spaces, the market size of the real estate sector is reckoned to touch USD 180 billion by 2020. There was an estimated one crore urban housing shortage that has been taken care of by the Pradhan Mantri Awas Yojana, Urban. Under this scheme over 14.3 lakh houses have been sanctioned in 2017-18 alone. Additionally in March 2018, more 3.2 lakh affordable houses have been sanctioned. There has been a notable rise in real estate activity in the tier-II cities like Jaipur, Lucknow, Indore, Ahmedabad, Raipur and other cities that have impacted the Indian real estate market.
How is the Indian realty sector gearing up?
With the pace of real estate development in India, there is a high potential that the realty sector will soon reach the trillion dollar mark. Let us take a closer look at how that can be achieved
Real estate merger, Joint Development & Joint Ventures
With comparatively lower sales of housing projects and a financial crunch, small-time real estate builders are looking for mergers, consolidations, acquisitions, joint developments and joint ventures with established and prestigious developers.
A prominent example from the recent times is the Trenset Jayabheri Elevate project in Hitech City, Hyderabad. Trendset and Jayabheri, the two prominent names in luxury residential living have joined hands to take futuristic living to a level of opulence.
This trend in real estate merging is likely to remain steady in the future as well.
Government regulated schemes to ensure transparency
Real Estate developers have been notoriously believed to dupe property buyers of their hard earned money and deliver sub-standard products. Because of a few, the entire real estate sector was looked down upon and customers were refraining from investing in properties. The real estate market was in dire need of a policy that would ensure transparency between the builders and the property buyers. With the passing of the RERA Act and other transparency policies like the GST or the Benami Property Act; the image of the real estate sector has changed and also helped in solving India’s housing crisis. With the introduction of these policies in customer interest, there has been complete transparency in the real estate ecosystem and the business models have transformed too. With flexible pricing, multiple payment options and timely delivery of projects, the current status of real estate is good news to first-time home buyers.
Also Read:The advantages of investing in real estate at a young age | Honer Homes
Foreign developers are looking to invest in the Indian realty sector
The several transparency policies and the ease to do business have attracted many foreign investors to enter the real estate market and capture a substantial share. Reports have stated that nearly 44% of the total investments in real estate sector (2018) have come from Canada, the US and Singapore. Over 90% of these foreign investments have preferred commercial projects in cities like Mumbai, Pune, Hyderabad and Bengaluru.
Currently, besides developers from the US and UK, property developers from Japan, Korea and China are also keen on investing. Since there is an increased focus on developing affordable housing projects, Sumitomo Corporation, a Japanese firm has joined hands with Krishna Group to build 5000 housing projects in Gurgaon. Besides Chinese firms like Dalian Wanda Group and China Fortune Land Development Co. have signed an MoU with the Haryana Government to build industrial parks. These firms are making billion-dollar investments in this sector.
Besides a capital inflow, implementation of REITs (real estate investment trusts) has brought in further transparency in real estate transactions that will encourage NRIs for real estate investment in India.
Affordable housing projects – focussing on consumer demand
Aligning with customer demands of affordable housing projects, real estate and small-size developers have jumped into the bandwagon. According to data by ANAROCK Property Consultants, there has been a 100% increase in the affordable housing segment in Q2 2018 as compared to the preceding quarter. This signifies that developers in tier I and tier II cities have started building projects observing customer demands.
Growth of new Segment
The real estate model of India has changed a lot in the last couple of years. While real estate measured to independent bungalows or stand-alone apartments until a few years back, it has now taken the form of gated community apartments and villas that also provide the convenience of varied amenities and facilities.
However, looking at market analysis, in all probability new sectors like senior living, student housing, co-working spaces, healthcare facilities and other segments like townships and plotted developments will see a rise. Due to the implementation of newer policies, several developers are diversifying and exploring new arenas in the real estate sector.
Modern construction techniques
There is a scarcity of skilled manual labour in the real estate development that leads to invariable project delays. However, with emerging technologies in the construction sector, the large players are implementing new construction techniques that ensure fast and quality delivery within the stipulated time.
Also Read: Registration charges and Stamp duty: What you must be aware of | Honer Homes
India is one of the fastest emerging economies in the world with many industrial developments, and real estate has great potential. A trillion dollar investment is required for its over-all growth considering the fact that a substantial foreign investment is already flowing in. Since years, real estate has been considered a great investment option and 2018 has seen record growth in the Indian realty sector. So if you are looking to invest in real estate today, look no further. It is a lucrative market and investing in a property in a high-potential area will always bring forth profits.
Visit Honer Homes, an eminent real estate developer in Hyderabad and find your dream home. The Indian real estate sector is fast developing and it is the perfect time to invest in a new house.
[…] Also Read: Future of Real Estate in India | Indian Real Estate Market Forecast 2019 […]
This post is great .and thank you for sharing. Real Estate Developers in Pune
Hey HonerHomes ,
Thanks for the finest info we are providing the best information.
Hey HonerHomes ,
Thanks for the finest info we are providing the best information.