The fiscal year 2018 is going to be a bumpy one for the Indian real estate sector. Many policy changes were introduced including the widely controversial demonetization and RERA (Real Estate Regulatory Authority) in 2016 as well as the GST in the year 2017.
Here is a list of a few major trends that are going to affect the Indian realty market.
- Deadline for all projects
Earlier, before the RERA came into effect, developers launched multiple projects with no completion date in sight. But now with the RERA, a deadline must be submitted for all the projects, therefore forcing developers to perk up their business models. This will augment customer confidence as well as bring transparency and accountability to the forefront.
- Greater capital flow
According to the World Investment Report of 2016-17, comprehensive capital flow into the Indian real estate sector will further expand. According to the United Nations, India has been ranked number four, for trade and development. It has been the destination for both international and Indian investors due to the improvement in the regulatory framework.
- The Affordable Housing Segment
The Affordable Housing Segment will have a large impact on the housing domain. By the year 2019, more than 1 crore houses will be built in the rural area. In fact, house buyers have been given the criteria for affordable housing. The square meter area has also been doubled from 30 to 60. Due to the limited availability of high currency because of the demonetization process, the land prices will decrease in the next few years.
- The Real Estate Investment Trust (REIT)
The Real Estate Investment Trust (REIT) will transform the office sector and due to this, the builders will obtain the funds to construct buildings. Private equity funds would fund the office sector which will attract small investors with minimal risks. These investors will be assured that the money they are investing will be in safe hands and the venture they are investing in will not lose its value over the next upcoming years.
- Increased projects and developers
Because of increased projects and developers as well as lack of customers, the unification of diverse developers is being executed. This is all due to industry consolidation. More meaning to the real estate sector will be given by both joint ventures as well as joint developments. This will give rise to mergers between contraries, big developers with smaller ones, big players with struggling ones and landowners with builders. And because the price to earnings ratio of this sector will improve, this will attract more customers and investors in the years to come.
So what is the verdict?
With the steady growth of trends in the real estate sector, investors and buyers are moving towards more small-scale investments. Because the real estate sector is a tried and tested method of increasing one’s cash funds, more and more people, both NRIs and citizens are using this option to save up in the long run.