The Indian real estate sector has been working to adapt to changes, guaranteeing quality boost to the prospective property buyers. The industry, going through a rough path in the initial phase of the year, is expected to strive upwards in 2019.
Post-demonetization has brought with itself the reviving interest of several institutional investors, particularly due to improved transparency, and accountability that came with the introduction of RERA, and GST.
The sector further capitalized affordable housing, and Credit Linked Subsidy Scheme (CLSS) during the year, making loan accessible at affordable rates. Incenting both buyers and sellers, Indian real estate is on the verge of a systems re-boot.
However, the present tax structure on the unsold properties has increased the uncertainty in the mind of property buyers, leading to a delay in the purchase decision.
With developers, and buyers trying to lay a patch on the property business, here are the upcoming trends in the Indian real estate sector:
1. Developers revisit their business model
The housing demand is likely to proliferate. India’s improved regulatory framework has made the real estate investment a preferred choice. Due to India’s increased credibility, it has managed to attract the interest of both global, and Indian investors. On the other hand, by way of RERA, a deadline has been given for project completion, compelling developers to improve their overall business model. The private equity is predicted to see a rise in the upcoming years. 2019 will prove to be a nurturing year for FDI investments in India.
2. Co-optation culture
Corporate spaces are the prime option for any firm who wants to cut costs and be time effective. Devising a culture of co-working, the age of workspaces is here to stay. These flexible spaces provide economical rates and is expanding its market in India.
3. Consolidation of the market
The slow movement in the realty sector in recent years, led to over-leveraging by developers. The small developers sought to JV’S or selling off their assets, whereas bigger names saved their financial assets. With the consolidation of the property development market, the crowded real estate sector in India is estimated to be cropped down. Landowners and small developers are collaborating with bigger, better-organized players. Smaller, and struggling developers are selling their land possessions to acquiring firms. The consolidation is expected to remove any anomalies in the real estate market, making it more transparent, and conducive for global and domestic partners.
4. Increase in home demand
Recent years have seen an increase in housing demand. The expanding rate at which the population is growing, urbanization has been the need of the hour. The increase in the demand is attributed to rise in nuclear families, increase in disposable incomes, etc. The government’s approval for affordable housing in its Union Budget 2017-18, has anticipated the growth of the sector at a high pace. Pradhan Mantri Awas Yojana (PMAY) is another initiative launched by the Government of India which bolters affordable housing under its ‘Housing for All by 2022” scheme. External Commercial Borrowings (ECBs) has also brought the option of low-cost funding sources for the builders.