The Indian real estate market is on the path of brisk growth. In the Global Competitiveness Report 2018 of the World Economic Forum, India ranked 58th, five places upwards compared to 2017. India’s rank in the World Bank’s Ease of Doing Business 2019 climbed up 23 places to 77.
The policy conditions are also conducive to this growth: in 2018, RERA and GST were implemented, bringing transparency in the sector. The Securities and Exchange Board of India
(SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform which allows investors to invest in the Indian realty industry, thereby creating an opportunity worth Rs 1.25 trillion in the Indian market over the years. Thus, considering these numbers, it hardly comes as a surprise that the real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute to 13% of the country’s GDP by 2025.
Residential sales were up with over 64,000 units sold in the first half of 2018 itself,
compared to 2017’s full year’s sales of approximately 96,000 units. Co-working has gained popularity and acts as a major driver in most micro-markets with 15% share in space absorption. The Indian retail estate is also expected to witness the addition of 13.5 mn sq ft of malls in 2019 across major cities apart from tier II and III cities.
Urbanization, policy support, increasing disposable income and easier financing act as the boosting factors for the market. Let us have a closer look at 7 of the rapidly growing centres of real estate in the country:
The financial and commercial capital of the country, also often referred to as the ‘city of dreams’ is exactly that when it comes to the real estate segment. Overall, Powai, Vikhroli, Kurla, Andheri and Goregaon remain a favoured investment destination accounting for 60% of total absorption of commercial real estate, according to reports. Co-working emerged as a late bloomer here but expanded at a frantic pace. The residential market was witnessing stupendous growth too: The Mumbai Metropolitan Region (MMR) recorded strong growth in launches in 2018 after many years of subdued launches, recording a growth of 220% year-on-year (YoY) in 2018.
The capital city and the surrounding region is a hub of robust commercial and cultural activities. Within these cities, Gurugram led the market activity in 2018, with both residential and office spaces being sought after. Noida followed on its tail, and this trend is likely to continue. Numbers clarify this trend: Gurugram contributed significantly to the new launches in NCR in H2 2018, taking up 52% of the overall pie, followed by Greater Noida and Ghaziabad. As far as overall growth is concerned, consider this: the NCR office market bounced back in 2018 registering a growth of 14% compared to the lackluster 2017.
Mumbai and Bengaluru have been rated as the top real investment destinations in Asia.
In Bengaluru, the people have realized that owing to policy changes the residential real estate market now functions relatively transparently and efficiently. This alone has triggered a healthy sales volume.
Chennai’s growth story is similar. Inventory overhang is at its lowest, affordable projects are being launched and To increase sales, developers are running attractive discount deals and offering subvention schemes.
New launches in 2018 were up 54% compared to 2017, in a YOY comparison. It is expected that after NCR and Bengaluru, Hyderabad will have huge project completions in the coming three years.
The Pune residential market saw growth in launched in 2018, up by 157% yoY over 2017.The IT service sector acts as the largest driver of office space in Pune. Kharadi and Undri are also counted as the real estate hotspots.
Significant increase in real estate activity in cities like Indore, Raipur, Ahmedabad, Jaipur and other 2-tier cities will open up new growth avenues in this sector. Ahmedabad, in particular, has been able to maintain a healthy momentum through the availability of ready-to-move-in houses and steady demand.
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