The last two-three years have been quite eventful for the commercial real estate segment, even as the residential market has continued to be sluggish.
Urbanisation is central to a country’s economy – and in India, the urbanisation rate corresponds to 60 per cent of the country’s GDP. For smoother transformation of a developing nation like India, the need of the hour is to manage the process of urbanisation.
Almost every industry is dynamic in nature and the construction industry is no exception. Its environment has become more dynamic due to the increasing uncertainties in technology, budgets, and development processes.
The home buying journey today is not as cumbersome as it was a decade ago. In the past, homebuyers were completely dependent on brokers and personal connect.
A favourite with the IT and tech crowd, Bangalore has been one of the brightest jewels in India’s business crown, and demand for office space has led to an all-time shortage of supply in the city.
Real estate developers in Hyderabad are counting their blessings. Reason? The rate at which the IT-ITES office-space market is being taken up in the city, is very good news for them.
The massive rally that drove the Indian market to record highs, has had a positive rub off on the beaten down real estate stocks. Most realty stocks have made sharp gains during the year, as the sentiments seemed to have improved for the sector.
Affordable housing schemes for the middle and lower income groups are finally on a serious growth curve in 2017, with huge demand in both segments now also being met with increasing supply.
We expect the impact of demonetisation, implementation of Rera and GST, to have a significant impact on the real estate sector. Following are few trends we expect to play out.
Separation of land aggregators and developers
Apartment Funding (AF) is a fund-raising structure where the involved investors acquire real estate units at deeply discounted prices.
Rera and GST implemented by the government in quick succession this year have a significant bearing on the real estate sector, raising hopes of recovery in an area that was hit hard by demonetisation.
For those justifiably worried about the chronic shortage of 19 million units in urban housing in the country, there is good news.
The weakness in the manufacturing sector in June seems to have been led by transitory factors like GST and water shortages. Over the next few months, output should improve as firms resume production following GST (to restock) and as monsoon alleviates the water shortage.
How do you see Rera going forward?
Rera is the biggest thing to happen in the Indian real estate sector and we hope that it will buyers more confident. Rera will allow demand creation but this may take a while.