Future of Indian Real Estate: Will It Shine In The Coming Years?

Admin | May, 23, 2022

Long-term investment always proves to be advantageous because of the high ROIs, but the main role comes from identifying the right property. You should ensure that you are investing with the right property in order to avail all the benefits. The real estate sector is one of the most important sectors of the country where countless people are investing. Every day you get to hear about a new launch and witness the excitement of people who are planning to invest in it. It is a broad segment that is composed of various sectors inside it and each is witnessing outstanding growth.

It Brings So Many Benefits With Itself; Let’s Count On Some That Residential Real Estate Investment Brings

1. It is always better than any other form of investment. Whenever the stock market, gold, or any other form is low then real estate will still yield good returns. This sector all the diversification of assets.

2. You can earn by sitting at home with the rental income. Real estate always comes with capital appreciation and a steadier one. So, you can put a floor or room or the whole house on rent and enjoy a fixed and good source of income.

3. Tax breaks and reductions are other benefits that you can enjoy with residential real estate. It saves a lot of money that is not possible with any other property with a reasonable cost of owning and maintenance.

4. Real estate investments are considered protected against inflation. As the property prices are rising, home value and rent will automatically increase. Investment properties provide you with increased monthly income and appreciation making you financially stable.

Robust Demand: That Has No Pause In It, Continuously Mounting

The demand for real estate is needless of any description. It is prolific and witnessing never-ending growth.

Savills India has presented a report that the real estate demand is expected to increase by 15-18 million sq. ft. by 2025.
Increasing urbanization and the surge of luxury living have led to the appreciating real estate market internationally.

Increasing Investments: Growing And Just Growing Endlessly

The residential investment comes with outstanding ROI, and the increased transparency in the process and the returns expectations have also pulled people to investment.
The first half of 2021 has been a lucky period for Indian real estate with India-registered investments worth US$ 2.4billion and a growth of 52%.

Attractive Opportunities: Garnering The Eye-Balls Of The Marketers And Investors

Developments in real estate are taking place at a rapid speed and this shows the potential growth opportunity. The continuous demand and the boost to project development is also a reason for the increasing real estate market.

According to the estimated report of ICRA, Indian firms are expected to raise more than 3.5 trillion through infrastructure and real estate investment trusts in 2022.
Blackstone- private market investor also invested in the Indian real estate market worth Rs 3.8 lakh crore and is planning to invest more of Rs. 1.7 lakh crore by 2030. This is done by looking at the benefits one can avail of from this market.

Policy Support: Proved To Be A Shining Star For The Sector And Investors

The government has come up with several policies supporting the investment and also boosting the people to invest.

The Government has allowed FDI of up to 100% for townships and settlement development projects.
The 'Housing for All' program is one of the facilitators of affordable housing. Twenty million houses will be built by 2022, in addition to a 5% reduction in the GST rate.

Union Budget: Every Time It Comes With Surprises, This Time For Real Estate

Union Budget always come with so many hopes, people in the whole country expect something from the budget to benefit them, in the same way, a lot is expected from the real estate budget as well. Budget 2022 brought so much to this sector by making affordable housing easy. It got a boost with the flagship Pradhan Mantri Awas Yojana (PMAY) where the affordable housing has been made easy in the revised estimates for FY2023.

In the revised estimate the target has been set to complete 80 lakh houses with the allotment of 48,000 crores almost double from the year 2022.
In this budget, urban planning has also taken the center stage with the committee people and the policy framers to frame policies for the urban development and provide an impetus to the real estate sector. The main aim of these policies is to bridge the gap between megacities and smaller ones bringing a balance between Tier1 and Tier2 cities.
The government is also focusing on the Atmanirbhar Bharat by making a USD 5-trillion economy by 2025. Maybe with this step, this sector will get a reform with the ease of doing business in the manufacturing sector.
National Real Estate Development Council (NAREDCO)-a top real estate body has also urged the Government to bring some relaxation in homeownership and affordable housing. This is going to benefit hugely to the development firms. Hoping these steps will bring a huge transformation in the real estate sector.

Indian Real Estate Is Extravagant And Voluminous

The real estate market is growing and is expected to grow more in the coming years. It can reach US$ 1 trillion by 2030 with the market forecast to reach US$ 650 billion, representing 13% of India’s GDP by 2025. The improving income level and the increasing industrial activity are also giving a good share of real estate in the GDP. Then the government policies for this sector are also boosting the growth including:

Real Estate Regulatory Act (RERA)

The real Estate (Regulation and Development) Act, 2016 came into existence by Real Estate Regulatory Authority aiming to protect the home purchasers and boost the investment. The main purpose behind the act is to bring transparency to home purchases. There are so many benefits that homebuyers can enjoy from this act:

You will get a proper standard sales agreement from all the RERA-registered builders.
A project until registered from RERA cannot be advertised. To open it in front of the public it has to be RERA registered.
RERA provides you with complete guidance and also quickly resolves all the grievances. You won’t be facing many issues from it.
If the builder has to make some changes to the project then it can be only done after the permission of at least two-thirds of the existing allottees.
All the construction and promotion processes done by the developer will make him only accountable for every action; no other person will be guilty of it.
If you are not getting timely possession of the project then you will be reimbursed. After RERA registration your money is 100% safe as the developer is accountable for all the costs.

Boost Affordable Housing Construction

Affordable housing has always been a demand section for homebuyers. Every second person looks for the property that is suitable to their pockets, especially the affordable ones coming with manifold benefits. Kudos to the builders who are also coming with affordable property options adding all the necessities in it. This boost to affordable housing construction is going to spark the residential real estate investment.

Interest Subsidy To Home Buyers

With the deduction in home loans and tax slabs, real estate has got an impetus. Also, the depletion in circle rates has also brought hope to residential real estate. But not all are eligible for the home loan subsidy, only the applicants with a maximum annual family income of 18 lakh are eligible for the subsidy scheme. In this scheme, you can avail of the subsidy interest of up to 6.5% and an amount up to 2.67 lakh. It is quite a good amount for the people who are not having much income but still looking for a reliable home.

Goods and Services Tax (GST)

Real Estate is the backbone of the Indian economy contributing to the GDP of around 6-8% and is the second-largest employer after the IT industry. There are several taxes involved in it like Service Tax, GST, indirect tax, and more that are helping in revamping the whole industry. GST has proved to be a relief point because it has saved the buyers from all other taxes and have to pay a single tax of 12% reducing a lot of costs that buyers had to pay always. It will put a positive impact on buyers and boost the people to buy more properties.

Demand For Residential Space Is Expected To Grow Stridently

Residential space is always expected to grow with the people showing interest in it. It is the sector that is always in demand because home is one of the necessities and people crave to get the best home suitable to their budget and needs.

Scenario: The local market is providing an opportunity for consolidation with the key players of the market. Foreign investors are showing huge interest in the market and the ease of the norms bringing a sign of relief to the investors. This has been driven by rapid urbanization, an increase in population, financing and loan solutions, easy availability of properties, and a rise in disposable income.

Notable trends: Indian residential market just not attract investors but the developers as well. Due to the amazing demand for this sector, good growth is expected with the continuous launch of projects. Economic growth along with growing urbanization is boosting real estate demand.

Real Estate Is Driven By Policies And The Growing Economy

RBI Policy
Housing for economically weaker section
FDI
Land acquisition bill
REITs
Govt-backed stress fund
Stamp duty
Tax relief
Construction premiums
J&K new land law
Green building movement

Top Cities To Contribute To The Growth: What A Prolific Growth Each Had Done

According to the latest market report by Knight Frank, New Year 2022 has attained a hike in the residential units. Mumbai recorded the highest sales in the first quarter of 2022 whereas Delhi NCR recorded the high sales in new homes. Kolkata market also witnessed a very strong growth attracting countless investors with a great rise in new units launched. The top eight cities with a steady rise in real estate investment include Mumbai, Bengaluru, Delhi – NCR, Pune, Hyderabad, Chennai, Kolkata, and Ahmadabad.

MARKET	Q4 2021	Q1 2022	Q1 2022 YOY GROWTH%	Q1 2022 as % of 2019 average
MUMBAI	18,440	21,548	-9%	141%
NCR	14,498	15,019	123%	140%
BENGALURU	11,881	13,663	34%	114%
PUNE	10,179	10,305	-25%	126%
HYDERABAD	6,357	6,993	1%	172%
AHMEDABAD	3,096	4,105	35%	98%
KOLKATA	2,429	3,619	1%	128%
CHENNAI	2,597	3,376	-17%	80%
TOTAL	69,477	78,627	9%	128%

2022 A Significant Year For Real Estate, The Coming Year Will Be A Bombshell

The real estate sector in India is experiencing great growth and is expected to witness 5% capital value growth in 2022 and more in the coming years. Bigger homes, improved amenities, and eye-catching pricing are all setting the deal that needs to be sealed. The recovery stage for residential properties is better. There are so many factors that have affected the real estate segment for the year.

Budget is an important step that can bring tremendous changes to real estate. The government of India has made several announcements in the Union Budget 2022-2023 that are going to boost the sector tremendously well. The government has prioritized the affordable housing segment and has strengthened the financing systems bringing ease to taking loans. GOI has provided a deadline of 2024 for providing Pucca houses to rural families. RBI has also again decided to keep the repo rate and reverse repo rate the same for the consecutive tenth time stabilizing the affordability.

Continued and increased growth with several segments because of the people taking interest in real estate. NITI Aayog expects the sector to reach a market size of $1 trillion by 2030. It is the third-largest sector that is about to bring economic growth in 2022. Post pandemic things are getting back to normal, residential sales have increased a lot with the new home sales, this is because of the price cut, increased affordability, ease in the financing, etc. further providing an impetus to the segment.

In the coming years, the market size is expected to rise and in 2040 it can grow from 12,000 crores to 65,000 crores contributing to the country’s GDP. This sector is specifically meeting the increasing needs of the people with the several products increase in infrastructure. Market size expansion is obvious with the people showing more interest in obtaining luxuries. The Indian real estate sector is witnessing phenomenal growth in land deals.

Factors Driving Real Estate In 2022: Some Important Ones To Note Down

The year 2021 has been a remarkable year for the industry. Nobody thought that after the pandemic it would react in such a positive way that it did. But it is revamped and rejuvenated and people have the same expectation from 2022 and the coming years as well, that builders give beautiful housing projects and people keep on investing in them. The low home loans and the one-of-a-kind deals from the government with enticing property options made the year beautiful for Indian Real Estate. There must be some factors attached to the sector or the trends that are likely to dominate the sector, let's know some.

1. Integrated Living: Well in the case of the residential sector, home buyers are more attracted to the concept of integrated living. Homebuyers are more fond of the homes that come with high-end amenities in and out of the project. This trend has picked up the pace that has made the living more peaceful satisfying the needs of residents and turning the investment positive.

2. Urban and Suburban Regions: People are now confined not just to the urban locations, instead people are also fond of suburban where they find an abundance of greenery, fewer constructions nearby, open living spaces, etc. This market is continuously getting an influx of investors. And this has also got a boost with the improved connectivity.

3. Indian Real Estate Attracting NRIs: Countless people have to leave India because of several reasons, but still they are very much attracted to the real estate market. Owning a house over here gives the NRIs a sense of security because at the time of crisis they can fall back here. This also allows them to settle here again with a job or business set up.

Some Other Trends...

One of the most commonly observed trends is the change in lifestyle that has pumped an individual to start a new lifestyle, especially a luxury one. They prefer more independent homes to obtain maximum privacy and comfort.

Let’s Now Sum It Up…

Opening The Doors For Positive 2023

Looking at the prolific growth real estate is witnessing in 2022, strong and positive momentums are expected in the year 2023 as well. With the solid foundation, an increase in demand lowered home rates, decreased circle rates, more beautiful properties, etc. will provide an upswing in the real estate sector. This upswing is going to provide a favorable economic outlook. Developers are also playing their part very well introducing several schemes and offers, providing lucrative offers to the sector with a positive push.

Also sustained infrastructure investments, unhindered connectivity, and bustling job opportunities, are also driving factors for the increasing real estate investment.

FAQs

1. What you should know before buying property in India?

Ans. Checking a few details is essential, some of them are goodwill of the builder and the brand, connectivity to various locations especially your workplace, civic and social infrastructure, potential property growth in the future, supply of water and electricity, etc.

2. How many properties can an individual own in India?

Ans. As of now, there are no limits on anyone purchasing property in India. An individual can be held as many properties as he/she wants to.

3. Is it a good time for NRIs to invest in Indian Real Estate Market?

Ans. Post pandemic every industry has changed so how the real estate would have stayed untouched. Indian real estate market has recovered well and this quick recovery and upcoming benefits have made the market open for investors.

4. How 2023 is going to be for real estate?

Ans. Well, an uptick has been observed in the first quarter of 2022 and the same is expected throughout the year. If this consistency continued then 2023 will be a robust year for investment.

5. What is the future of real estate in India?

Ans. Real estate is one of the most important sectors of the country that has provided a sense of living to countless people and its prolific growth shows the interest of people in it. This sector is expected to reach US$ 1 trillion in market size by 2030.

6. Is investing in residential real estate beneficial?

Ans. If you need a home to live then it is the best investment, but you can also fetch multiple benefits like putting it on rent will give you a regular source of income, then you can keep it as an option for good and bad times.