INDIAN REAL ESTATE – THE NEXT STEP
The real estate sector in India has been a roller coaster ride with many inclines and a few steep declines, where most investors, home owners, potential home owners and businesses have been led to believe that we’re in buoyant bubble that could go north or south.
Contrary to popular belief, here are a few reasons that will help you look the clutter and make an informed decision…
- Real Estate Sector Growth Projections
Dubbed to be the fastest growing sector in the country only after agriculture, with a total estimated size of 180 billion dollars by the year 2020. This upward trajectory is supplemented by unique opportunities that each state has to offer fuelled by increasing disposable income, a demand for a high quality lifestyle and the Centre’s efforts to implement reforms that will further inject FDI into the country give the sector a healthy estimation of over 30% in the near future.
Mumbai and Bengaluru have already seen a significant rise of 30% and 35% respectively in the luxury residential market and are poised to grow further with the sectors popularity amongst NRIs and multinational companies.
- Changing Landscapes Through Government Support
Enforcement of new government mandates that ease the approval process for clearances is a huge boost for the real estate sector, which is poised to not only heighten consumer morale but also bring about stricter norms that market players will need to adhere to by the end of November this year. The model’s success will rely upon changes brought about by the center where the increase in delegation of powers to local bodies and the use of technology will play a key role to bridge this gap. This in turn will lead to a stronger focus on sustainable development and swift action enforced towards violations. Small steps towards regulating the sector have already begun such as the ‘ISRO’ app that allows market players to obtain approvals for projects that are closely situated next to heritage structures and protected monuments.
- Ease Of Business
India was ranked 142nd globally for the ease of doing business and has now moved up 12 places in the last year according to a World Bank report. A ranking that is dominated by countries such as Singapore, followed closely by New Zealand, Denmark, UK, USA, South Korea and Hong Kong is a big leap for India to secure the 130th spot and is set to rise higher with centers ambition to be in the top 100. With the Government revising and streamlining various policies, FDI into the real estate sector is set grow at a healthy pace.
- Real Estate Market Sentiment
The year 2016 is set to see a turn around in the real estate equity markets according to the America Merril Lynch report, where there is going to be a significant rise in demand for properties under INR 3 Crore and above INR 20 Crore bracket. Consumer sentiment is will change from rental to own and FDI will increase through leasing with multinational companies looking to set-up base in India.
As per industry forecasts for the year 2016, there is a positive outlook favoring investment opportunities in both commercial and residential real estate markets that will begin reap returns from Q2 and Q3 onwards of the financial year.