India is a sentimental market when it comes to real estate. There is a greater belief in the security and growth of real estate investments than in other investment options such as mutual funds and stocks. Although the real estate market was seeing a significant drop in demand in the previous and several changes due to RERA, GST, and demonetization, there is a significant change in sentiment and demand in the past six months. There is a projection of 9% growth per annum in 202 with an estimation that the real estate market size would increase to $180 billion by 2022, as per sources.
There are 5 key trends that you should be aware of in 2020 before you invest in real estate.
- Tier 2 cities are poised to see the most significant growth with the influx of industry investments into these cities across India. Non-metros like Pune, Hyderabad, and Coimbatore are also rapidly seeing a growth in real estate, especially in the housing markets. Secondary markets like Thane for Mumbai and Faridabad for NCR are also showing growth in affordable housing markets. For end-users and investors, this is the beginning of the revival of the real estate market across the country.
- Government schemes pushing for affordable housing have given rise to many developers providing a wide range of options. The lowered GST on affordable housing and the various government support schemes such as the “Pradhan Mantri Awaas Yojana” have put the spotlight on affordable housing.
- There is a revival of investment properties in the metros. Rapid urbanization has led to an influx of young working professionals who are looking for rental homes. The growing demand implies that it is a good time to consider investing in homes for gaining rental income.
- Technology-driven homes are on the rise. Connected homes with sustainable living practices are preferred and buyers are willing to pay the premium for this. Green spaces, social spaces and large open spaces are the order of the day for premium properties.
- RERA adoption by all states is in progress and this protects the buyer from any vagaries that might occur during the development of the property. The RERA Act mandates all builders to register their ongoing projects and provide regular updates on the status of their project to ensure timely delivery of properties to homeowners. The committees impose harsh penalties on builders who are found violating the law.
The real estate market is destined for rapid growth in the coming year. The rise is expected to continue for the next 5 years, thus giving investors more hope of returns from India’s favorite investment sector.