Single window approvals by central and various state governments to accelerate the growth of the industry.
Post the revival of the Indian real estate sector, we saw this year that the homebuyer is more empowered. For developers too, regulatory reforms have eased some of the existing pain points. These developments are expected to help increase cash flow in the Indian real estate sector in 2019.
Commercial real estate to boom
In the coming year, there will be huge scope for the development of commercial real estate due to the increasing number of grade-A office spaces for start-ups, co-working space providers, and e-commerce companies, all of which are also the key drivers of this segment.
IT parks in terms of location and amenities will also become key growth drivers for commercial real estate in India. Rentals in commercial realty will spur growth, as investors tend to rent commercial space more than buying it. Also, a rise in the educational institutions in metro cities will drive student housing, which is a huge unmet demand in the country.
Warehousing to get a significant boost
Another growing sector is warehousing, which should consolidate next year. There has already been a sharp increase in the demand for organised warehousing due to advancements in e-commerce. Now, with the liberalisation of FDI, the requirements for the warehousing industry are expected to escalate more in 2019.
Further initiatives to strengthen the industry: REIT to come into force
The electronic and white goods segment will spur growth in warehousing, as the need for substantial warehouses in urban and semi-urban areas will increase. According to a recent industry report, India is set to witness investments close to Rs 50,000 Crore for the creation of warehousing facilities across the country between 2018 and 2020.
The Indian government has also announced certain amendments in taxation and regulatory policies, which should help Indian real estate. RERA is streamlining real estate, ensuring that the buyer gets full value for the money spent on buying a home. The central and various state governments are also announcing single window approvals for real estate. If the same becomes effective, it will contribute significantly to the growth of the industry.
Furthermore, GST and SEBI approval of the Real Estate Investment Trust (REIT) has led to improvised transparency, which, in turn, has caught the attention of institutional investors who are now looking at Indian real estate with renewed dynamism. With a lot of expectations now on the first REIT in early 2019, investors can look forward to great opportunities to be a part of the fund.
Proptech to be a game-changer
The numerous facets of proptech will be a significant driving force for Indian realty. Digital tools that create virtual and augmented experiences for homebuyers will bridge the gap between shortlisting and buying properties online. Also, technological advances such as chatbots, BIM, and drones will ensure more safety in the construction industry.
Homebuyers’ sentiment to shift: Affordable and mid-market housing to see maximum traction
I believe that 2019 is going to be a bright year for both developers and homebuyers, as mid-market and affordable housing will provide a tremendous investing opportunity. Homebuying sentiments will shift towards luxury homes that feature a compelling price tag.
Millennials to bring in a demographic shift
Real estate firms, since long, have been hearing about the rise of millennials for a demographic shift in the market; however, we are yet to see this impact.
2019 is expected to be the year where this scenario is set to change. Estimates peg that India will have 410mn millennials, who will spend $330 billion annually by 2020. Also, the preferences and needs of millennial buyers – residential projects with essential amenities, urban connectivity, and public infrastructure in a liberal neighbourhood – are likely to have strong traction in the real estate market in the upcoming years.
Overall, accelerated by government measures and other pivotal factors, the Indian real estate sector will surely progress with increasing demand in 2019.
This article is contributed by Madhusudhan G., Chairman and MD, Sumadhura Group
(The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor)