India is the fastest growing economy in the world. Investors from across the globe are ready to put in money in the Indian market. Even though the Indian real estate industry has not been in a good phase for the past few years, it has shown signs of improvement in the past year. The question now is – Will the trend continue in a positive direction in 2019?
Indian Real Estate industry hit a massive blow in November 2016 after the demonetization. In 2017, RERA was introduced and the builders found it hard to comply with all the terms and condition of the new law. The Indian Real Estate was going through a change of phase in 2017. The industry stabilized in the year 2018 as both new projects and sales improved in some major cities if not all.
2018 saw an increase in demand for real estate after a gap of four years, the prices are expected to increase in major cities. Cities like Mumbai, Delhi, Bangalore, and Hyderabad are going through rapid urbanizations and see high migrations from other cities and states. As per number available on some real estate research websites, home sales increased 24 percent during 2018 after fall of 17% in 2016. So if you are looking to invest in real estate or planning to buy a property in some of the major cities, don’t wait for too long.
In the past couple of years, the builders are focusing more on the affordable house and the same trend will continue this year. Many developers plan to build affordable housing, with residential units in the price range of INR 15–30 lacs. More affordable housing will be available for a big part of the population.
If we talk of problems, the ongoing liquidity crisis in non-banking finance companies and the crumbling of sector giants, including Amrapali and Unitech, would keep realty giving a hard time in a year when the country will go through the general elections. If the results of the election go as per market sentiments, we can see major growth in the Indian economy in all sectors for the remaining months of the year.
The commercial projects will continue to outperform the home-based real estate market even this year. As per Namrata, MD Event Clinic, Demand in office and retail sectors will continue to beat supplies, leading to lower vacancies and higher rental yields in 2019-20. Private equity participation is quite high in commercial assets, which lends more shine to this space.
The private equity is predicted to see a rise in the upcoming years. 2019 will prove to be a nurturing year for FDI investments in India.
A report on the state of NRI investments in the Indian real estate sector says NRI investments in Indian real estate has already doubled from $5bn in 2014 to $10.2bn in 2018. This growth is largely driven by five cities – Mumbai, Pune, Bangalore, Gurugram, and Noida.
The dollar has gained more than 10% compared to Indian Rupees in the past couple of quarter. Even the other major currencies are stronger now, which means NRIs find this time perfect to invest their money in Indian Real Estate market. The other reason why most of the builders are now targeting the NRI client is Indian real estate more affordable and regulations like RERA that have led to increased transparency.
Event Clinic is organizing a property fair in Singapore on 16th and 17th February. Builders from all the major cities are taking part in the event. This is their 3rd event in less than a year, which shows builders are happy doing it and local Indians are interested in exploring this medium of finding properties to invest in the Indian real estate market.
There are some major events happening in this year so investors should keep a tight watch on them but overall the real estate market looks positive and this is an ideal time to enter the market for all type of investors.