The Indian real estate sector has been evolving over the past few years, having witnessed both fluxes as well as growth. The introduction of new rules including taxes, reforms as well as regulations are improving the business environment.
The fate of the realty sector in India partially depends on the results of the ongoing elections too. While the first half of the year is understandably expected to be slow when developers are careful with new launches and homebuyers adopt the ‘wait-and-watch’ approach. Post the election, this situation is expected to unleash a jump in growth.
The best time for buying is now, however, while the homebuyer can still get good bargains. This is because if the government changes, it’s unclear whether the next government will be taking the current reforms to the next level. Over the last two years, India has jumped 52 positions in ‘Ease of Doing Business’ with construction showing a massive improvement. The construction sector holds third ranking among the 14 major sectors and effects economy in all other sectors too. It is touted to incur more NRI investment in both long and short terms.
Real estate is one of the most globally recognized sectors and comprises of four sub-sectors; these include housing, retail, commercial and hospitality. Real estate is expected to increase to around 1 trillion US$ in 2030 from 120 US$ in 2017. It’s expected to contribute to about 13% of the country’s GDP by 2025. And with commercial, retail and hospitality real estate growing significantly, they are expected to provide the much-needed push for the growing needs of the nation.
SEBI (Security and Exchange Board of India) has approved the formation of a new platform – Real Estate Investment Trust (REIT) which will make it easier for investors to invest in the Indian realty sector. This is expected to bring in an additional Rs1.25 trillion in the coming years into the realty sector. And with a shift in market trends from the family-owned businesses to that of professionally managed ones, real estate developers have also changed gears. They are now investing in centralized processes for sourcing materials, hiring architects and engineers and organizing manpower. With real estate developers now revamping their accounting and management systems and exhibiting greater transparency, they are also able to attract more funding to manage their growing need for managing multiple projects.
The year 2019 is expected to be a positive one, throwing up stronger growth trends fuelled by increasing demand for commercial office spaces and greater demand for homes.