The real estate sector is most globally recognized sectors. Real estate sector include four sub sectors – retail, housing, hospitality, and commercial. The growth of this sector is dependent on the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. The real estate market in India is currently in the midst of honestly stimulating times. The construction industry ranks third among the 14 major sectors in terms of direct, indirect induced effects in all sectors of the economy.In the last few years there have been a few clear macro shifts that have defied the realty sector. The demonetization exercise in November 2016 put brakes on the growth of the real estate market as it made the rampant use of cash in real estate transactions (prevalent earlier) more difficult. Further the Real Estate Rule Act (RERA) that was passed by the Centre in 2016 and most states in 2017 put a lot of onus on builders which further halted new aids in the housing space. In addition the demand-supply gap has been an issue with most of the key real estate markets such as Mumbai, Bengaluru, facing a serious oversupply of properties. The big backing challenge came in 2018 after the IL&FS fiasco. The implosion of IL & FS raised serious questions about the asset-liability mismatch in the books of NBFCs, which have been the principal financers for the real estate sector. Approximately oversupply in the mid and premium segments may still take years to narrow. The big areas of growth in realty could come from low cost housing smart cities and profitable realty. Let us look at some stimulating future trends for realty in India. In 2016 and 2017 strong growth has seen in commercial rental activity in cities such as Chennai, Bengaluru, Mumbai, and Pune, with ~ 4,000 cr sq. ft. of space absorbed. Also grant Thornton expects rental yields to inch higher in 2019 and 2020. The Indian real estate market has always attracted large interest from the emigrant Indian diaspora. The market is currently in a slowdown but with a high potential of turning profitable in the medium to long term, making it an attractive investment proposition. Non Resident Indians (NRIs) represent a large share of buyers on the Indian real estate market. It is very important that before investing in real estate you must have adequate knowledge of what works and doesn’t work. The lack of awareness can be problematic. NRI investors particularly need to know to safeguard themselves from unethical practices by both real estate developers and property brokers. Talking in terms of returns, Indian realty cannot be generalized due to varying growth in different states. There are some parts of India that performed extraordinarily well while others didn’t. Some markets are almost end user driven which puts the lid on notional price hikes. Earlier most of the investors banked on residential properties. But today wealthier savers invest in commercial ones and sectors like warehousing. The Real Estate Investment Trusts are keeping investor engage in the commercial real estate. Indian commercial properties are producing a lot of interest among wealthy savers. Commercial properties in the real estate sector have performed much better than covering over the past few years. The housing sales in major cities have seen a slowdown especially after implementation of demonetization the Real Estate (Regulation and Development) Act 2016 and the Goods & Services Tax. The commercial office leasing ROI has relatively has gone up.
Former investors invested in residential properties by purchasing and selling them off in time. But the same will not make sense currently due to the new regulatory setting and current norms in Indian realty. Indian realty of now is in an unpredictable state and Indian housing prices will barely see any shift. But the state might change in the upcoming and good returns can be expected from the realty. As the government has taken some praise able decision in recent in the form of GST, RERA &demonetization etc. Over the past 5-6 years the numbers of developers in major cities like Mumbai, Gurgaon, Noida, and Chennai have shrunk by around 60 per cent. The consolidation in industry will be very beneficial for the overall industry dynamics as it will ensure timely delivery of the projects,cultivate buyer confidence, enhance overall project execution, and modernize the market by addressing the supply-demand dynamics.