Top reasons to invest in Indian realty in 2019
January 9, 2019
The year gone by has shaped Indian realty to comply with numerous policies that would guarantee transparency and quality of construction to investors and home buyers. These big bang reforms have taken care of several pressing concerns and have helped boost the real estate market in our country. Experts believe 2018 was a bumper year for Indian real estate and the positive effect will carry forward into this year. Let’s take a closer look at some trends in Indian real estate that will prompt you to invest in 2019.
Global capital inflow
One of the biggest real estate trends of last year and a major sign of revival for the Indian property market was the increase in investments by foreign investors. Improvement in India’s credibility – thanks to a solid regulatory framework – has made it an attractive destination for global investors. Experts believe the momentum will only increase from here, making 2019 even bigger in terms of Foreign Direct Investment (FDI) in Indian real estate. If you’re an NRI looking to make an investment in Indian realty, take a look at our ultimate NRI guide to buying property in India.
Revamped business models
Since the turn of the millennium, many projects were launched by developers without any assurance of completion. There were multiple instances where homebuyers were left stranded with their money gone and no completed project. This left homebuyers in a fix, with the real estate industry losing its credibility. However, by way of the Real Estate Regulatory Act (RERA), all projects mandatorily have to submit a deadline for completion. This has resulted in two things – developers were now compelled to revamp their business model, and the system transformed into one with more accountability and transparency. The implementation of GST and the Benami Transactions (Prohibition) Amendment Act 2016, too, has had a resilient impact on how builders run their businesses and their ethics. Fly-by-night developers no longer have a place in the market and going forward from 2019, the Indian real estate industry promises higher and sustainable demand, with returns in the long run.
Ever increasing demand for homes
One of the biggest positives about Indian real estate is the constant demand for residential property, which is fuelled by our ever-increasing population. In addition to the population growth, the rise of nuclear families and increased urbanisation has led to real estate developers focusing on the affordable housing segment. The past decade, however, was all about luxury housing and the mid-range segment. The 2017 Union Budget gave a much-needed nod to the affordable housing segment, and since then, this sector has seen unprecedented growth. While experts predict this growth will not slow down in 2019, the luxury and mid-range segments, too, will pick up thanks to increasing salaries and purchasing power, as well as easier financing and payment options. All in all, developers will be able to focus on all three housing segments in terms of revenue, and homebuyers will be presented with multiple options.
One of the biggest proponents of Indian real estate is its commercial market. The many policies and reforms instated by the government have resulted in numerous positive shots for commercial property, which is seeing a new high growth curve, particularly in a few niche markets:
REITs or Real Estate Investment Trusts work similar to mutual funds and are essentially trusts that only invest in property that is profitable. These properties include both residential and industrial projects. Just like a mutual fund, investors can choose from multiple properties to build a profitable real estate portfolio. With the Indian government opening up our real estate market to REITs, they may result in substantial returns to investors and an overall boost to the commercial market segment.
India is changing in more ways than one and proof of this is the office sector. Today, professionals prefer hybrid or flexible office spaces. This is partly the result of our vibrant startup ecosystem, which has paved the way for the co-working space market. A sure success story, co-working spaces are currently gaining a lot of traction worldwide as well.
Industry and trade:
With the recent changes in India’s FDI policy, demand for warehouse and industrialised spaces will soon skyrocket in the coming years. This will only further fuel the positive impact the commercial office market is already witnessing.
Alternative asset classes
While the residential, commercial and hospitality sectors are growing, it is heartening to note that numerous alternative and new asset classes have also emerged. These include medical institutes, speciality hospitals, nursing homes, student housing and so on. Experts believe these new asset classes will see tremendous growth and will push the real estate market, backed by foreign and domestic investments.
Following demonetisation and a decline in the housing market in 2007, Indian realty has grown by leaps and bounds. The future looks bright for both developers and end-users. If you are a first-time homebuyer or investor, the time is ripe for you to finalise on the property of your dreams. Head over to Casagrand today and take your pick from our myriad superior homes.