The real estate sector in India is set to witness some important developments this year. After a slowdown that lasted nearly a couple of years, the real estate market in India began to pick up again towards the middle of 2018.
Here’s what we can expect in 2019:
1. Increase in demand & supply of housing: The Government of India is focused on working towards its agenda of Housing For All by 2022. The plan is to build one crore new housing units by the stated year, because of which affordable housing is being due importance. Nearly 50,100 new housing units were launched across NCR, MMR, Chennai, Bengaluru, Pune, Kolkata and Hyderabad in the second quarter of 2018. In Pune, there was an enormous 214 per cent increase in the number of new housing units in Q2 2018 (compared with Q1 2018). The affordable housing sector was a major contributor here, and we can expect a significant increase in the demand and supply of housing units this year.
2. The rise of hybrid workspaces: Hybrid workspaces are steadily replacing traditional offices in India. This trend can be ascribed to the growing start-up culture in the country. As a consequence, corporates and co-working operators have joined hands to operate hybrid workspaces, which in turn boost the real estate economy. This trend is also enhancing cost-efficiency, workplace productivity and employee retention. 2019 will see many more such workspaces come up in various parts of the country.
3. REITs will enable diversified investments: For India’s real estate market, REITs can play an important role to solve the problem of unoccupied and unsold inventory, which is currently a major challenge facing the economy. REITs can help mobilize the returns on these dormant properties, while allowing investors to start small and safely diversify their investments. This will encourage a whole new demographic of investors to explore real estate as an investment option.
4. Greater FDI in real estate: As a result of the increasing popularity of REITs, there is expected to be a surge in FDI into India’s real estate. REITs make it easier for global investors to diversify their real estate investments. Additionally, the enhanced transparency and efficiency in the real estate sector—after RERA and GST—has further fuelled global investments.
5. New business models: Tax reforms like GST and regulatory reforms like RERA and Benami Property Act have brought in a greater level of transparency, accountability into the real estate sector. In order to deliver on these counts, real estate developers are swiftly revamping their business models, and homebuyers and investors can now look towards projects that are compliant with the prescribed standards.
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