2017-18: A year of change for commercial real estate sector
The real estate industry is influenced by rapid advancement in technology and significant demographic shift. As there is increasing demand for information technology, manufacturing, logistics and consumer goods, the real estate outlook for 2017 is likely to be robust too. The demand will be further boosted due to a paradigm shift in commercial space. 2017 seems to be a bumper year for India when it comes to real estate and economy. In the eyes of major institutional investors and funds, India is moving up in the list of top chosen geographies for real estate investments.
How is 2017-18 going to be a year of change for India?
Growing cities – Indian cities are driven by urbanization, rising income and increasing consumption of goods and services which leads to growth. There is a demand for a house that is located strategically and is at a good price with good quality. The cities and micro markets that are end-user driven are likely to remain stable if seen from the perspective of resulting pricing shifts. Some banks also lowered their lending rates which is a great news for intending home buyers. More numbers of borrowers are now As eligible for loans. All these facts go well for the growth of the real estate sector.
The evolving home buyer – Usually the home buyers prefer to hire an institutionalized developer with a good track record and governance framework. There are evolving customer profile with a larger share going to customers seeking home loan to buy a property. Real estate market in India is growing and maturing and will essentially be end user driven.
GST – Goods and services tax has caught the attention of the market. The government has kept a large number of items under the 18% tax slab. GST has subsumed a series of central taxes and state-level levies and for the nation, it will be a benefit in the long term.
Sustainable urban development – There is a global rise of cities. By the year 2050, the urban population will account for more than two-thirds of the world population. Green buildings and developments are bringing long-term benefits to the environment and are increasingly finding favor with consumers in India. Currently India’s cities contribute a smaller proportion of green developments. But the scale of green development is improving mainly because of incentives and tax benefits. There is a new direction for India’s real estate sector with green and inclusive urbanization that consists of the entire lifecycle of buildings.
Thus over time, the economy is expected to help increase transparency and institutional capital deployed across industries and sectors is bound to increase to a new level. The Indian real estate sector will emerge stronger, healthier and capable of long periods of sustained growth.