Real estate in India has been in great demand for decades as it offers better financial stability. And, for a fast-growing Indian population, investing in land offers higher returns compared to other investment options.
Looking forward, in the future there will be economic and social shifts, larger risks and returns, a wider range of opportunities, and new drivers of value. Such factors include the impending economic downturn and the rise of a fresh buying population, in the form of young adults.
Real Estate 2020 – As expected, the top metropolitan cities such as Mumbai, Bengaluru, Delhi, Chennai, Kolkata, Hyderabad and Pune saw tremendous rise in property prices. But, the actual surprise was the increase in the price of properties in tier 2 cities – due to the developments in infrastructure.
Real estate in 2020 and beyond will be the years of emerging tier 2 and tier 3 cities as opportunities have already started to grow in these markets.
Here, we list out the latest real estate trends in the present, future, and beyond –
The rise in the flow of market capitalization to the real estate community has helped in the recovery of this industry. The increase in domestic activity and the investors’ stress on real estate logistics has led to increased investments in real estate .
Need for Affordable Homes
The Government of India has facilitated the growth of the real estate sector by bringing in a massive initiative by setting up the Pradhan Mantri Awas Yojana scheme – ‘Affordable Housing’, a basic accommodation to every Indian by 2022. It is a credit linked subsidy scheme, designed for the Economically Weaker Section (EWS), Low Income Group (LIG), Middle Income Group-I (MIG-I), and Middle-Income Group-II (MIG-II). A homebuyer can avail a subsidy of up to 2.67 lakh on home loans under this scheme. This will set the tone for a prosperous Indian real estate community.
Shift to Tier 2 Cities
The increasing growth of real estate in tier 2 cities is due to the emergence of software companies, the walk-to-work concept, media exposure, quality lifestyle, and an increased attraction to retail. These factors have driven investors to move to the housing market in tier 2 cities. The capitalization rates in both first and second tier real estate markets are expected to equalize in the future.
Use of New Technology
Real estate sellers and buyers use new technologies like apps, social media, online home selling platforms and smart home technology, and with the emergence of AI, the real estate sector is expected to rise going forward, thus contributing to the growth and success of the real estate industry.
Use of Amenities to Attract Customers
Property owners, builders and even landlords seek to capitalize on amenities. Gyms and parking access are staple needs, and the want for unique amenities like communal gardens and amphitheaters are among many others. The major attractions in real estate are amenities as they offer value to the property.
The above listed are just some of the many trends expected in the real estate world, but the market fundamentals will remain solid.
Having said that, here are a few key finders or predictions for 2020 and beyond which may shift the fundamentals of the market, such as future developments.
- By 2020, the investable real estate will grow by more than 55%.
- There will be a wider return of opportunities in fast growing cities
- Value keys will be sustainability and technological innovation
- Teaming up with the government will become more important
- By 2025, there will be 37 ‘megacities’, up from 23 today, and 12 of these will be in emerging markets.
Implications for real estate strategies
Wrapping up – The predictions of the growth in institutional-grade real estate will continue to be strong, creating an even greater range of opportunities for real estate investors. The real estate investors and managers need to have a vision towards the growing trends and prepare themselves for the future.