The last decade has seen the real estate sector experiencing a fluctuating ride; demonetization, RERA & REITs in 2016, as well as GST in 2017, have meant that the past few years have been especially tough on the realty sector.
But those were transformative phases and the picture is changing for businesses gradually since last year. The 2019 union budget proposed benefits for real estate intending to drive growth in the sector. The government is actively pushing the real estate segment as this sector is one of the key drivers that will propel their goal of achieving the $ 5 trillion Indian economies. On the strength of these boosts, the real estate sector has once again picked up momentum and is growing at a healthy 9% and is expected to reach $180 billion by the year 2020.
Investing in real estate is considered safer and more favorable in terms of returns than gold, mutual funds/stocks, or other financial investments. But as a home buyer who will put in a considerable amount of funds, there needs to be thorough research and study of the market before the investment.
Here are some trends that are expected to rule the Indian real estate market in 2020. Read on…
1. Government initiatives-With an eye to reviving and provide impetus to the realty sector, Finance Minister Nirmala Sitharaman outlined a slew of measures for the real estate sector in the union budget 2019 such as new model tenancy law, provision for the construction of new public infrastructure on landholdings by the Central Ministries and Central Public Sector Enterprises across the country, reviving the NBFCs from the ongoing debt crisis and liquidity crunch, modifying TDS on the immovable property to include other charges, etc. Also, a collaboration between builders and the government will not only minimize risks but will also be a more viable economic model of development for urban real estate and infrastructure. These urban housing developments are aimed at the mid-segment home buyers and will look to provide budget-friendly projects but with all necessary facilities for comfortable living.
2. Foreign Direct Investments-As mentioned above the real estate sector is essential to the economic growth of India but it is also one of the most fluctuating in terms of funding. Attracting foreign direct investment (FDI) into the sector is vital to its continued growth and development. The Indian economy is looked upon as one of the fastest-growing global economies and as such can yield good returns for foreign investors. The Government rules and regulations related to FDIs in the real estate sector have been favorable for global financiers and have successfully generated a good amount for the sector which is expected to grow in the coming years.
3. Escalating demand in top metros and Tier 1 & 2 cities –Another trend that is emerging is the rising demand for quality housing in not just metros such as Mumbai, Bangalore, Delhi-Gurgaon, and Chennai but also Tier 1 and 2 cities such as Pune, Hyderabad, Chandigarh, Ahmedabad, Vadodara, etc. The main reason is the work opportunities through IT companies and other sectors as well. These cities have become hubs for real estate investment as the ROI is attractive. Particularly, luxury and mid-segment housing is driving realty growth in these towns.
4. Affordable home –The government is focused on making housing pocket-friendly to all sections of the society and under the Pradhan Mantri Awas Yojana Gramin and Pradhan Mantri Awas Yojana Urban systems aims to achieve the objective of “Housing for All” by the year of 2022. The union budget of 2019 has made preparations for tax exemption of Rs 1.5 Lakhs to buyers on home loans under affordable housing. These forces are driving demand for quality but affordable housing in the budget homes segment mainly from the working professionals in the top 5 cities in India.
5. RERA force –The implementation of RERA in 2016 was a game-changer for the real estate industry. Although the industry struggled initially coping with the new rules and regulations, RERA has caused the home buying process to be transparent for the buyers. The home buyer’s rights have been established and ensure a structured timeline of project status, timely completion of projects, and accountability for the constructor to avoid hidden costs. Also, the rules are clear and strict regarding punishments on builders who violate RERA norms.
6. Aprreciation of Rental property –In addition to the growing market for residential property purchases in top tier cities and towns in India, the rental properties have also shown a remarkable increase in demand, mainly on the back of working professionals transferring and relocating for improved job prospects and higher standards of living. Delhi, Mumbai, Bangalore, Pune, and Hyderabad have shown a regular demand for both buying as well as rental properties. Also, having a second property in these cities, which is not being used by the owner, means an extra source of income for the owner.
7. Increase in technological factors: The internet is all over the place today. There is nothing that one can't purchase online. So, although one cannot buy a home online without really seeing it, the initial research in terms of choosing a location, availability of properties, pricing, reputed builders, amenities, infrastructure is being done via online searches. Developers and brokers all have an active digital presence to serve their sales pitch. Smart homes that are technologically connected are the newest trend. Many builders offer high tech but sustainable Digi Homes that combine the best of technology with natural surroundings, green spaces, and good air quality.
We at Shree Balaji Group are accustomed to providing nothing but the best to our customers. Luxury, Location & Convenience at your doorstep. If you belong to those who have a luxury niche, the life that will suit you, you can check out the premium luxury apartments in Vadodara|Mehsana|Ahmedabad by the one and only Shree Balaji Group.
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