Future of Indian Real Estate: Will It Shine In The Coming Years?

1. It is always better than any other form of investment. Whenever the stock market, gold, or any other form is low then real estate will still yield good returns. This sector all the diversification of assets.

2. You can earn by sitting at home with the rental income. Real estate always comes with capital appreciation and a steadier one. So, you can put a floor or room or the whole house on rent and enjoy a fixed and good source of income.

3. Tax breaks and reductions are other benefits that you can enjoy with residential real estate. It saves a lot of money that is not possible with any other property with a reasonable cost of owning and maintenance.

4. Real estate investments are considered protected against inflation. As the property prices are rising, home value and rent will automatically increase. Investment properties provide you with increased monthly income and appreciation making you financially stable.

Robust Demand: That Has No Pause In It, Continuously Mounting

The demand for real estate is needless of any description. It is prolific and witnessing never-ending growth.

1. Savills India has presented a report that the real estate demand is expected to increase by 15-18 million sq. ft. by 2025.
2. Increasing urbanization and the surge of luxury living have led to the appreciating real estate market internationally.

Increasing Investments: Growing And Just Growing Endlessly

1. The residential investment comes with outstanding ROI, and the increased transparency in the process and the returns expectations have also pulled people to investment.
2. The first half of 2021 has been a lucky period for Indian real estate with India-registered investments worth US$ 2.4billion and a growth of 52%.

Attractive Opportunities: Garnering The Eye-Balls Of The Marketers And Investors

Developments in real estate are taking place at a rapid speed and this shows the potential growth opportunity. The continuous demand and the boost to project development is also a reason for the increasing real estate market.

1. According to the estimated report of ICRA, Indian firms are expected to raise more than 3.5 trillion through infrastructure and real estate investment trusts in 2022.
2. Blackstone- private market investor also invested in the Indian real estate market worth Rs 3.8 lakh crore and is planning to invest more of Rs. 1.7 lakh crore by 2030. This is done by looking at the benefits one can avail of from this market.

Policy Support: Proved To Be A Shining Star For The Sector And Investors

The government has come up with several policies supporting the investment and also boosting the people to invest.

1. The Government has allowed FDI of up to 100% for townships and settlement development projects.
2. The 'Housing for All' program is one of the facilitators of affordable housing. Twenty million houses will be built by 2022, in addition to a 5% reduction in the GST rate.

Union Budget: Every Time It Comes With Surprises, This Time For Real Estate

Union Budget always come with so many hopes, people in the whole country expect something from the budget to benefit them, in the same way, a lot is expected from the real estate budget as well. Budget 2022 brought so much to this sector by making affordable housing easy. It got a boost with the flagship Pradhan Mantri Awas Yojana (PMAY) where the affordable housing has been made easy in the revised estimates for FY2023.

• In the revised estimate the target has been set to complete 80 lakh houses with the allotment of 48,000 crores almost double from the year 2022.
• In this budget, urban planning has also taken the center stage with the committee people and the policy framers to frame policies for the urban development and provide an impetus to the real estate sector. The main aim of these policies is to bridge the gap between megacities and smaller ones bringing a balance between Tier1 and Tier2 cities.
• The government is also focusing on the Atmanirbhar Bharat by making a USD 5-trillion economy by 2025. Maybe with this step, this sector will get a reform with the ease of doing business in the manufacturing sector.
• National Real Estate Development Council (NAREDCO)-a top real estate body has also urged the Government to bring some relaxation in homeownership and affordable housing. This is going to benefit hugely to the development firms. Hoping these steps will bring a huge transformation in the real estate sector.

The real estate market is growing and is expected to grow more in the coming years. It can reach US$ 1 trillion by 2030 with the market forecast to reach US$ 650 billion, representing 13% of India’s GDP by 2025. The improving income level and the increasing industrial activity are also giving a good share of real estate in the GDP. Then the government policies for this sector are also boosting the growth including:

Real Estate Regulatory Act (RERA)

The real Estate (Regulation and Development) Act, 2016 came into existence by Real Estate Regulatory Authority aiming to protect the home purchasers and boost the investment. The main purpose behind the act is to bring transparency to home purchases. There are so many benefits that homebuyers can enjoy from this act:

• You will get a proper standard sales agreement from all the RERA-registered builders.
• A project until registered from RERA cannot be advertised. To open it in front of the public it has to be RERA registered.
• RERA provides you with complete guidance and also quickly resolves all the grievances. You won’t be facing many issues from it.
• If the builder has to make some changes to the project then it can be only done after the permission of at least two-thirds of the existing allottees.
• All the construction and promotion processes done by the developer will make him only accountable for every action; no other person will be guilty of it.
• If you are not getting timely possession of the project then you will be reimbursed. After RERA registration your money is 100% safe as the developer is accountable for all the costs.

Boost Affordable Housing Construction

Affordable housing has always been a demand section for homebuyers. Every second person looks for the property that is suitable to their pockets, especially the affordable ones coming with manifold benefits. Kudos to the builders who are also coming with affordable property options adding all the necessities in it. This boost to affordable housing construction is going to spark the residential real estate investment.

Interest Subsidy To Home Buyers

With the deduction in home loans and tax slabs, real estate has got an impetus. Also, the depletion in circle rates has also brought hope to residential real estate. But not all are eligible for the home loan subsidy, only the applicants with a maximum annual family income of 18 lakh are eligible for the subsidy scheme. In this scheme, you can avail of the subsidy interest of up to 6.5% and an amount up to 2.67 lakh. It is quite a good amount for the people who are not having much income but still looking for a reliable home.

Goods and Services Tax (GST)

Real Estate is the backbone of the Indian economy contributing to the GDP of around 6-8% and is the second-largest employer after the IT industry. There are several taxes involved in it like Service Tax, GST, indirect tax, and more that are helping in revamping the whole industry. GST has proved to be a relief point because it has saved the buyers from all other taxes and have to pay a single tax of 12% reducing a lot of costs that buyers had to pay always. It will put a positive impact on buyers and boost the people to buy more properties.

Demand For Residential Space Is Expected To Grow Stridently

Residential space is always expected to grow with the people showing interest in it. It is the sector that is always in demand because home is one of the necessities and people crave to get the best home suitable to their budget and needs.

Scenario: The local market is providing an opportunity for consolidation with the key players of the market. Foreign investors are showing huge interest in the market and the ease of the norms bringing a sign of relief to the investors. This has been driven by rapid urbanization, an increase in population, financing and loan solutions, easy availability of properties, and a rise in disposable income.

Notable trends: Indian residential market just not attract investors but the developers as well. Due to the amazing demand for this sector, good growth is expected with the continuous launch of projects. Economic growth along with growing urbanization is boosting real estate demand.

1. RBI Policy
2. Housing for economically weaker section
3. FDI
4. Land acquisition bill
5. REITs
6. Govt-backed stress fund
7. Stamp duty
8. Tax relief
9. Construction premiums
10. J&K new land law
11. Green building movement

According to the latest market report by Knight Frank, New Year 2022 has attained a hike in the residential units. Mumbai recorded the highest sales in the first quarter of 2022 whereas Delhi NCR recorded the high sales in new homes. Kolkata market also witnessed a very b growth attracting countless investors with a great rise in new units launched. The top eight cities with a steady rise in real estate investment include Mumbai, Bengaluru, Delhi – NCR, Pune, Hyderabad, Chennai, Kolkata, and Ahmadabad. 

The real estate sector in India is experiencing great growth and is expected to witness 5% capital value growth in 2022 and more in the coming years. Bigger homes, improved amenities, and eye-catching pricing are all setting the deal that needs to be sealed. The recovery stage for residential properties is better. There are so many factors that have affected the real estate segment for the year.

Budget is an important step that can bring tremendous changes to real estate. The government of India has made several announcements in the Union Budget 2022-2023 that are going to boost the sector tremendously well. The government has prioritized the affordable housing segment and has strengthened the financing systems bringing ease to taking loans. GOI has provided a deadline of 2024 for providing Pucca houses to rural families. RBI has also again decided to keep the repo rate and reverse repo rate the same for the consecutive tenth time stabilizing the affordability.

Continued and increased growth with several segments because of the people taking interest in real estate. NITI Aayog expects the sector to reach a market size of $1 trillion by 2030.  It is the third-largest sector that is about to bring economic growth in 2022. Post pandemic things are getting back to normal, residential sales have increased a lot with the new home sales, this is because of the price cut, increased affordability, ease in the financing, etc. further providing an impetus to the segment.

In the coming years, the market size is expected to rise and in 2040 it can grow from 12,000 crores to 65,000 crores contributing to the country’s GDP. This sector is specifically meeting the increasing needs of the people with the several products increase in infrastructure. Market size expansion is obvious with the people showing more interest in obtaining luxuries. The Indian real estate sector is witnessing phenomenal growth in land deals.

Union Budget always come with so many hopes, people in the whole country expect something from the budget to benefit them, in the same way, a lot is expected from the real estate budget as well. Budget 2022 brought so much to this sector by making affordable housing easy. It got a boost with the flagship Pradhan Mantri Awas Yojana (PMAY) where the affordable housing has been made easy in the revised estimates for FY2023.

• In the revised estimate the target has been set to complete 80 lakh houses with the allotment of 48,000 crores almost double from the year 2022.
• In this budget, urban planning has also taken the center stage with the committee people and the policy framers to frame policies for the urban development and provide an impetus to the real estate sector. The main aim of these policies is to bridge the gap between megacities and smaller ones bringing a balance between Tier1 and Tier2 cities.
• The government is also focusing on the Atmanirbhar Bharat by making a USD 5-trillion economy by 2025. Maybe with this step, this sector will get a reform with the ease of doing business in the manufacturing sector.
• National Real Estate Development Council (NAREDCO)-a top real estate body has also urged the Government to bring some relaxation in homeownership and affordable housing. This is going to benefit hugely to the development firms. Hoping these steps will bring a huge transformation in the real estate sector.