Indian Real Estate is one of the most globally recognized sectors. It is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 per cent of the country’s GDP by 2025. The Real Estate sector is divided into 4 sub-sectors such as Housing, Retail, Hospitality and Commercial. Other than Housing, Retail, hospitality and commercial sectors are also growing significantly, thus providing the much-needed infrastructure for India's growing needs.
4 parameters to determine the real estate market growth in India
1. Robust Demand
Due to rapid urbanization, Real Estate in India has been seeing high demand in cities like Mumbai, Pune, Hyderabad, Bengaluru among others have seen a flux in people spending on properties. Real Estate has become the preferred investment option with constantly increasing income, urbanization and economic growth among other reasons.
2. Attractive Opportunities
Co-working space across the top seven cities has increased sharply in 2018, reaching 3.44 million square feet, compared to 1.11 million square feet for the same period in 2017. With opportunities in new and different segments like co-working space, warehousing, hospitality is growing at a fast pace in India. As Indian Rupee is constantly getting weaker against the Dollar, more NRIs are looking to invest in properties here.
3. Government Initiatives
‘Housing for All by 2022’ – Under the scheme of Pradhan Mantri Awas Yojana, an initiative by Government of India, affordable housing to be provided to every citizen on India by 2022. Increased cash flow to be expected in coming years because of Real Estate Investment Trust. After SEBI’s approval, REIT – a platform for getting investments, might see openings in few years. Tier – II & III cities should be the focus areas for developers in 2019, as many government schemes are being provided for the betterment of smaller Indian cities.
4. Increasing Investments
India has been facing strong competition from neighboring countries like Vietnam and Philippines since past few years and they will continue to go head-to-head again in 2019. With the growing FDI flow into Indian real estate is encouraging increased transparency. Real Estate developers have been focusing on “Affordable Housing” for the benefit of growing middle-income class. Many past year projects which were under process or reaching their deadlines will be completed first and we will see a good amount of supply of houses and other commercial properties in the market.
Ultimately, 2019 is going to be a cautious year for the Real Estate sector in India where developers focus should be on consolidation and in working up existing inventory and for buyers/investors, they will be looking at further price correction in the market.
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