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Trends From The Indian Real Estate Market

Real-estate sector is the backbone of any economy globally and this will continue to be true in upcoming decade. It comprises of four segments i.e. housing segment, retail space, hospitality industry and commercial spaces. Growth of real-estate depends on few dynamics such as growth of industrialization in the economy & business growth, which in turn raises the demand for office spaces, which ultimately increases the demand for residential spaces in urban areas.

NRI’s count is more than 3 crores for India, who also play dominating role in Indian real-estate sector by investing heavily into it. Of the various cities in India, Bangalore & Hyderabad is expected to be preferred investment place, followed by other cities such as Pune, Chennai, Goa & Delhi.

As per the report from Knight Frank, Real-estate sector in India is expected to reach a market size of US $ 1 Trillion by 2030 and will contribute 13% of the country’s GDP by 2025. Co-working spaces & bachelors’ accommodation is the new trend in commercial and residential space.

Indian real-estate has got positive boosts in the recent years due to govt policies, below are some of them.

  1. RERA (Real-estate regulatory authority)
  2. GST (Goods & Service tax)
  3. Housing for all by 2022 scheme by Govt of India (PMAY)
  4. 100% FDI in real-estate investments
  5. Increase in number of NRI investments in India
  6. Introduction of REIT (Real-estate investments trust) under guidance of SEBI
  7. Reduction of GST to 1% for affordable homes valuing up to Rs.45 Lakhs.

Below are few facts related to real-estate:

  1. Indian real estate sector attracted institutional investments worth US$ 30 billion in 2018.
  2. Private Equity and Venture Capital investments in the sector reached US$ 4.47 billion in 2018
  3. India has received Foreign Direct Investment (FDI) equity inflows to the tune of US$ 24.91 billion in the period April 2000-December 2018
  4. Housing launches across top eight Indian cities increased 75 per cent in 2018 to 182,207 units.
  5. In March 2019, Embassy Office Parks, India’s first real estate investment trust (REIT) went public.
  6. Warehousing space in top eight Indian cities increased 22 per cent y-o-y in 2018 to 169 Mn sq. ft.
  7. Around 5.1 million sq. ft. of retail space became operational in top seven Indian cities in 2018.
  8. In May 2018, Blackstone Group acquired One India bulls in Chennai from Indiabulls Real Estate for around Rs 900 crore (US$ 136.9 million).
  9. In February 2018, DLF bought 11.76 acres of land for Rs 15 billion (US$ 231.7 million) for its expansion in Gurugram, Haryana.

Telangana real-estate is going to see a surge in prices in the coming few years, due to imbalance between demand & supply. During the phase of RERA implementation in the last 2 years, there were lot of uncertainties among builders, due to which not many new projects were launched in the region. Due to this reason, inventory has fallen to just about 2 quarters of sales. Due to political stability in the region, demand will continue to pickup with low available inventory, thus escalating real-estate prices in the region. If buyers are looking for investments in Telangana, this can be the good time to invest.

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