The real estate sector in India is one of the most globally recognized sectors. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations.
The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.
Real Estate Sector in India
By 2040, real estate market will grow to ₹ 65,000 Crore from 12,000 crore in 2019. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13% to the country’s GDP by 2025.
The real estate sector comprises four sub sectors – Real Estate Sector in India
- hospitality and
Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. Indian real estate is expected to
increase by 19.5% CAGR from 2017 to 2028.
Real Estate Sector in India, After the unlocking process was initiated in the third quarter of 2020, both the residential and office markets started showing promising signs of revival. As business activities resumed with the gradual opening of the economy in the third quarter of 2020, the office market witnessed green shoots of recovery.
By 2040, real estate sector in India will grow to ₹ 65,000 Crore from 12,000 crore in 2019. Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13% to the country’s GDP by 2025.
The real estate sector comprises four sub sectors – type
Sentiments improved further in the last quarter of 2020 with the news of potential vaccine development and the office market continued its recovery momentum. Real Estate Sector in India Net absorption increased by 52%, while new completions grew by 39% when compared to the preceding quarter.
Home sales volume across eight major cities in India jumped by 2.5x to 33,403 units from July 2020 to September 2020, compared with 9,632 units in the previous quarter, signifying healthy recovery post the strict lockdown imposed in the second
quarter due to the spread of COVID-19 in the country.
Government initiatives in Real Estate
Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies.
Real Estate Sector in India Below are some of the other major Government initiatives:
- The Atmanirbhar Bharat 3.0 package
- Under Pradhan Mantri Awas Yojana (Urban) (PMAY (U)), 1.12 crore houses have been sanctioned in urban areas, creating 1.20 crore jobs.
- Government has created an Affordable Housing Fund (AHF) in the National Housing Bank (NHB) with an initial corpus of 10,000 crore (US$ 1.43 billion).
FDI in Indian real estate
The growing flow of FDI in Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards. Indian real estate is expected to attract a substantial amount of FDI in the next two years with US$ 8 billion capital infusion by FY22.
Residential real estate in the country’s top seven property markets has staged a comeback with sales exceeding prepandemic levels, driven by record-low interest rates, discounts offered by developers, lower prices and stamp duty cuts in key areas.
Real Estate Sector in India, The improved sales momentum has lifted confidence among realty developers, pushing them to launch more projects as indicated by the rise in new offerings across markets.
MUMBAI REAL ESTATE
Home sales in India’s eight prime residential markets increased by 12% in the January-March quarter compared to October December quarter of 2020. Average value of property sold also rose 14% to 66 Lacks.
Challenges and Opportunities in Real Estate
The Following are the challenges in Real Estate sector in India
- Unanticipated delays in project approvals;
- Availability of accomplished and trained labour force;
- Concern due to ongoing pandemic situation;
- Increased cost of manpower;
- Rising cost of construction;
- Growth in auxiliary infrastructure facilities; and
- Over regulated environment.
Opportunities : As India awaits policy reforms to pick up speed, the demand for Real Estate in a country like India should remain strong in the medium to long term.