Biggest Reasons Behind Recovery of Indian Real Estate And Future Expectations
The real estate sector of India has observed a strong recovery in the 3rd quarter of 2021 as the economy began to rise after the severe second wave of the Covid19. Both residential and commercial developments have staged an outstanding performance, ignite by numerous factors.
What are the driving factors for the real estate sector?
- Historical low-interest rates on home loan
- Affordable residential property
- Improving economic condition and rising employment
- High saving during the pandemic
- High wealth creation in the market
Housing sales
- 124%+ on-year hike in top 7 Indian real estate markets: (According to the survey of JLL India)
- 92% on-year rise in top real estate markets of India: (According to the survey of Knight Frank India)
- 21% rise in the launches in residential property in Delhi NCR, Bangalore, and Mumbai (luxury & affordable segments)
| City | Q3 | Q2 | % Share |
| Mumbai | - | 279 | 39% |
| Bengaluru | - | 137 | 19% |
| NCR-Delhi | 76 | 136 | 19% |
| Hyderabad | - | 106 | 15% |
| Chennai | 235 | 63 | 9% |
| Others | 305 | - | - |
| Grand Total | 616 | 721 | 100% |
Office leasing
- 12.5 million sq. ft. transactions, up 168% on-year: (According to the survey of Knight Frank India)
- 11.9 million sq ft new office space completion, up 67% on year
- Bengaluru, Pune, and Hyderabad account for 73% of new ready for possessions: (According to the survey of Knight Frank India)
- 5.85 million sq. ft. net office absorption, up 48% sequentially and 8%, on-year: (According to the survey of JLL India)
- 10.9 million sq. ft. new ready for a possession; rentals remain rangebound: (According to the survey of JLL India)
- Vacancy opportunities rise to 16.4% from the previous 15.8% in June 2021: (According to the survey of JLL India)
Outlook
- The residential property market of India is expected to see many new launches in the festive season
- Builders’ SOP (Standard Operating Procedure), affordable interest rates to attract home buyers
- Rising vaccination drive, lower infections cases may encourage more activity in office leasing
- The robust performance of the IT sector, strong hiring shows potential for the office space segment.
Conclusion
As real estate investors continue to re-plan, rearrange and reconsider investment strategies, demand is bound to go up, as buying a property has become very significant once again. In the last quarter of this years and whole 2022 sentiment for the residential space remains more positive than the commercial segment. We can see noticeable improvements in newer developments, and a tech-enabled approach which could well transform the industry in the long term.