The Indian real estate sector plays a phenomenal role in the Indian economy in that, it contributes around 5% of the nation’s GDP.
While 2017 was a relatively slow year for real estate, due to the enforcement of demonetization (in 2016), 2018 is already seeing a rise in real estate investments across the country.
We’ve put together some of the hottest real estate trends of the year.
Post the Union Budget 2018-19, Indian Govt. announced that it would be setting aside an Affordable Housing Fund under NHB (National Housing Bank). This has encouraged developers to construct more units in the Affordable luxury category.
The Indian middle class is coming to trust the real estate market, thanks to regulatory and standardization reforms like GST and RERA. And since the middle class is the major buyer of affordable luxury, the segment is booming this year.
Better quality of life
Another interesting trend is that there has been a rise in Indians choosing properties with aspirational elements as opposed to budget homes. Properties with lifestyle amenities like gyms, parks, convenience stores and swimming pools are being chosen over houses with ‘budget’ as the sole USP. Today’s buyers are making more informed choices – they’re looking for the right location, amenities, and price. Also, the great supply Vs. low demand for housing in 2017 has left a huge inventory for people to choose from.
The impact of RERA
Over the years, home buyers have complained about how real estate regulations favoured builders more than them. With the RERA Act, the Govt. tried to level it out between the two. With RERA in place, fly-by-night promoters are shutting shop and existing developers are focusing on finishing ongoing projects. This could mean a good supply of houses and a good demand. RERA has brought a great deal of transparency to the sector and has gained the confidence of many buyers in return. From fraudulent sellers to delayed projects, it protects buyers from all grievances and compensates them handsomely in case the developer is at fault.
Home loan interest rates are at an all-time low. Due to an abundance of liquidity in the banking systems, Reserve Bank of India has rearranged interest rates. The interest rates have hence been floating between 8.3-8.4%.
This has brought EMI rates down considerably. The interest rates are suspected to stay in the same range for longer. This means more Indians are going to buy properties this year.
However, it’s best to seek a professional financial expert’s help on the same before deciding to purchase or invest.
The impact of proposed Smart cities
The Smart Cities initiative aims at getting India’s Tier 2 and Tier 3 cities on par with the metros. The Govt. will be improving their infrastructure, using smart technology and solutions. On the other hand, metros are getting overpopulated with a migrating workforce. This is increasing the cost of operation for businesses, who might consider shifting to a Tier 2 city.
These changes may lead to development and growth in Tier 2 cities and eventually the flow of workforce. The developers who take into consideration these factors and start operations in Tier 2 cities may benefit immensely from it.