Since time immemorial, owning a property is a dream cherished by several Indians. More than a need, it is the emotional value attached to owning ‘apna ghar’ (one’s own home).
The way real estate has metamorphosed from being just another tangible asset to a prominent asset class for investment is nothing short of remarkable. However, due to several macroeconomic conditions, the sector has witnessed dwindling sales in the recent past. And given the vast reach of TV journalism, prime-time debates have inundated audience with hefty doses of how real estate sector has lost its sheen and how it is no more a lucrative option for investors. But, unfortunately, these channels have failed to show the brighter side of the story.
So, is the situation grave? Well, not really. In this article, let us tell you why it is sensible to invest in Indian real estate market in today’s scenario.
- Last year’s surgical strike against black money cracked a whip on speculative investors, transforming the market into a buyer-centric one. Moreover, with declining sales and mounting unsold inventory, developers are not leaving any stone unturned to grab buyers’ attention. Clearly, in such a scenario, it is the best time for an end-user to negotiate and sign a great deal.
- Further, regulatory reforms like the Real Estate Regulatory Act (RERA) and the Goods and Services Tax (GST) have further reinstated the consumer confidence in the realty market. This can be gauged by the growing number of sales volume in Q2 and Q3 2017.
- Developers have also become more vigilant and are trying to complete their existing projects rather than launching new ones. Moreover, there is a good mix of affordable and mid-segment properties in the market catering to all segments. And with affordable housing getting ‘infrastructure status,’ more and more developers are launching projects in the budget-friendly segment.
- The present government has also been on its toes to constantly improve the country’s infrastructure. This year’s Union Budget saw the largest-ever allocation to rural housing and improvement of road networks. Further, improving air connectivity in Tier II cities and metro connectivity in several cities is also likely to bode well for the sector in the times to come.
- The government has also announced several policies to attract home buyers. Be it the Credit-Linked Subsidy Scheme (CLSS), modifications in the EPF scheme or the reduced home loan interest rates, all these have made investing in real estate a profitable deal.
At present, the market may be slow-performing but real estate will never become non-lucrative in the Indian context.
Real estate is cyclic in nature
It is marked by four phases namely recovery, expansion, hyper-supply, and recession, and on an average, it takes about 18 years for this cycle to complete.
Moreover, considering India’s population growth, the demand for housing is perennial. Further, in addition to Indians, real estate also forms a crucial part of the investment portfolio of the NRIs, HNIs, and UHNIs. Last, but certainly not the least, with several multinational companies expanding and setting base in the country, the demand for commercial real estate is also likely to grow by leaps and bounds.
During its heyday, real estate fetched great returns. However, with the changing scenario, it is imperative to change the outlook as well. Like any other asset class, real estate is expected to fetch good returns if one has a long-term horizon. Of course, location and project will also determine the growth potential of a property.
We, at RoofandFloor, are ardent advocates of real estate as a good asset class for investment. We also strongly believe that after every storm comes a calm. So, if you are waiting at the edge to take the plunge, now is the best time to buy a property. And if you are convinced enough, click here to explore a wide range of property options in your preferred budget.
Come, let’s get you home!