A Bull Run For The Next Five Years
The year 2017 will go down in history as the “Year of System Reboot in Indian Real Estate”. Numerous regulatory regimes including demonetisation, Benami Property Act, RERA, GST and Insolvency Bankruptcy code commenced this year. Implementation of these acts directly hit the real estate market across the country leading to sluggish sale, liquidity crunch, funding issues, approval nightmares and confusion among consumers. But I believe that all this transitional slowdown in demand that we witness as an aftermath to a series of reforms has nothing to do with the huge pent-up demand for housing in India under the ambitious goal of ‘Housing for All –by 2022’.
As the dust from these radical transformations settles, their impact is wearing off gradually. The Indian real estate market looks very bullish for the next five years, especially in larger cities as real estate prices have already bottomed out and stabilised. Fence sitters who had postponed their buying decision expecting further fall are coming back to the market opting for best available deals. The transparency and credibility brought in by these regulations have not only attracted domestic buyers but also global investors in multi-dimensional projects with relaxed foreign direct investment policies.
To boost the ‘Housing for All’ mission by 2022, and speed up the pace of development, various initiatives were announced by the government such as infrastructure status to affordable housing, Pradhan Mantri Awas Yojana for credit-linked subvention subsidy, bank recapitalisation, lower home loan interest rate, carpet area sops, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Swachh Bharat Mission (Urban) under the urban habitat model, smart city mission, and the PPP model where affordable housing emerged as the rising star of Indian real estate in 2017.
Another major sector responsible for propelling India’s overall development is infrastructure, which enjoys intense focus from the Centre. The government has initiated several remarkable policies to transform our transport model such as Bharatmala for national highway extension, expansion of rail connectivity through intercity metro linkage, exploring inland waterways through coastal roads Ro-Ro services, wharfs and breakwater, Trans Harbour Bridge, development of multi-modal industrial corridor, improving road connectivity, building warehousing and logistic parks which will accelerate and bring in revolution to amplify the country’s economic growth.
Commercial real estate outperformed in 2017. On a more comprehensive note, these policies and reforms are intended to improve governance, eradicate fraudulence and corruption, streamline taxation structure, and boost development of major sectors such as real estate. While core sectors are leading towards development, bottlenecks and challenges continue to persist in the progression of these acts. Finally to sum up, India is definitely the fastest growing real estate market in the world. It is addressing the demand for built-up space, for multiple asset classes such as offices, housing units, retail, warehousing and logistics parks, in which housing sector is undergoing a significant growth. The outlook for the Indian housing sector in 2018 looks promising, with rising purchasing power, expanding population, growing aspirations, increasing nuclear families, rapid urbanisation, easy home loans and low interest rates. Thus, the housing sector in India is anticipated to register a strong growth in the coming years.
