The real estate sector in India has undergone a massive change in the last few years. It was growing at a decent pace, before slowing down due to the introduction of new reforms by the current government.
However, the past two years have seen India climb 52 positions in the Ease of Doing Business rankings released by the World Bank. Owing to the transparency and accountability brought by the new reforms, things are getting better for the billion dollar industry, suggest Modi Builders, one of the top builders in Hyderabad.
Here are 5 major trends that are likely to shape the real estate market in 2019:
Demand for commercial real estate:
Investment in commercial real estate will be fueled by the GDP growth. Owing to the renewed interest from banking tenants and expansion by tech-companies, the commercial real estate absorption has grown by more than 20 per cent in 2018, and the trend is likely to continue.
Availability of affordable residential real estate:
The demand for affordable housing is growing with the increasing population, urbanization and the rise of nuclear families. But, the buyers have not been able to get the desired properties at an affordable price in the major cities like Mumbai, Bengaluru and Delhi NCR.
However, some residential real estate developers like Modi Builders have come up with various apartments in Hyderabad at different location, meeting the demand of both luxury as well as affordable home-seekers.
Joint developments, joint ventures and development management agreements have been growing between the landowners, smaller developers and organized developers. This process is expected to go on, as the small developers are reaching out to the reputed ones for completion of their projects and resolving their financial troubles.
There has been a structural shift in the logistic sector as GST has helped bring all the states together, turning them into a single market. The sector is attracting quite a few players with small fragmented networks being consolidated into large distribution chains with centralized hubs. The developers have been encouraged to shift their focus from housing to warehousing with the growth of online shopping.
The financial complications:
The disbursal to the real estate sector have been slowed down by the ongoing NBFC crisis. The developers are finding it difficult to raise funds for the projects as the banks are becoming watchful. They have been forced to resort to other financing routes, which in turn is increasing their cost of capital.
The period before and after the general elections is expected to be crucial for the Indian realty. It can make or break the progress of the sector. Many developers tend to go slow on launches before polls and home buyers also wait for the developments. However, the experts at Modi Builders predict a fruitful first quarter for the home buyers, and expect a turnaround for the sector post general elections.