After demonetization, indefinite anxiety had plagued the Indian real estate market. Nevertheless, this year started slowly for potential homebuyers but numerous policies and transparent regulations by the government are likely to push-button for the real estate market in India. With the growing population of the nation, the need for housing is even higher. Speedy completion of real estate projects, growing need for affordable housing and big government reforms like- RERA Real estate (regulation and development) Act, 2016 and GST are expected to change the scenario in the year 2019.
Real estate developers generally delay the occupancy time or take decades to complete the ongoing projects by faking assurances to the buyers. All this had been quite common due to the lack of strong regulations in real estate market in India. Well now with the enactment of the RERA Act (Real Estate Regulation and Development Act, 2016), deadlines have been fixed for each project that is in the process. The act is expected to quiver the developers and compel them to complete the projects on time while offering transparent business models to the buyers and to the law.
The year 2019 is expected to supply and see more transactions in the affordable housing segment than the luxury and mid-housing segment. With a shortage of around 40 million houses in the nation, affordable housing is the need of the hour. The government’s dream of ‘house for all’ by 2022 needs to push this segment ahead and this is what builders building the projects believe as it provides big opportunities for them as well as for buyers. Affordable housing is seeing an uptick both from the supply and demand side this year and it will become a key driver for the real estate market in India in 2019.
While the government is backing up this segment of housing by extending the benefit of Credit Link Subsidy Scheme on home loans for Middle Income Group under Pradhan Mantri Awas Yojana till March 2020, this segment of housing is expected to grow during this year. Under this scheme, the buyer can get a subsidy up to 2.67 lakhs on home loans.
2019 will see the dawn of buyers
2019 is expected to be the year of execution as a large number of projects that have been struggling will reach completion with government strict reforms. This will result in a good supply of affordable houses for different sections of buyers especially first time buyers. Buyers are expected to get what they expect in the prices they are ready to pay for housing. First-time buyers will get more opportunities to invest in real estate as more housing options will be available on the market with projects nearing completion. With the growing economy and ever-increasing real estate prices, a number of first-time buyers are expected to invest in the property sector for the sake of investing.
Increased leasing options for commercial use
In metros like Mumbai, Bangalore, and Delhi, this trend has been doing rounds for many years but with changing functioning trends, leasing is becoming common in tier II and tier III cities as well. With everyday new startup being launched, the needs for office spaces are only increasing in the nation. Also, this is resulting in co-working spaces due to high rents and space crunch.
The share of co-working spaces in total office leasing increased to 10% in 2018 from 5% in 2017. Well, with the measure of traction and acceptability, this new real estate expected to emerge in 2019 and is here to stay. Surprisingly, the demand is not only coming from startups and SMEs but even from larger companies. Tata Communication, a leading Indian firm set up its office in 18,000 sq feet in Smart Work Business Center in 2018. Similarly, Awfis Space Solutions rented out 21,000 sq. ft space to Hinduja Global Solutions
Co-working spaces reduce renting costs and more and more new-age office spaces are being leased thereby benefitting the buyer and the seller.
Apart from just housing projects, the gone years have seen the rise in all new cities being built by real estate developers. With cities like Lodha Palava, where co-living spaces for young, adult, old and children are being created, housing in such cities is in high demand. Senior and student housings are going to increase in the coming year with their growing population. India is a young nation with a 50% population below 20 years. Such a high population required the student living sector which is likely to grow in 2019. Besides, with the estimated senior population the country expected to touch 240 million by 2050 from the existing 98 million in the country. This demands more senior housings.
Cities that are being developed with all the basic amenities for students and seniors while keeping up with all age groups are likely to see heightened activity.
The emergence of Newer Markets
Tier-II and Tier-III markets are taking on the high prices unaffordable real estate sector in bigger cities by offering a whole new growth of affordable real estate sector. The home prices in these emerging secondary and tertiary markets are accelerating the growth of the real estate segment at large by bridging the affordability gap in the market. Metros had remained overpriced when it came to buying properties. But, with the opening of tier II and tier III markets, the buying and selling options have increased and this is going to see a rise in the year 2019.
Rumors have it….
Well, it was believed lately that Real Estate Investment Trust (REIT) will be launched in 2019. REIT was introduced in the year 2008 in India but lack of tax implication was keeping it from coming into action back then. With the government’s property reforms like RERA and GST, it is expected that REIT could come into action with progressive modifications and increased investor interest.
Overall, 2019 is expected good for real estate growth. Both buyers and sellers can get opportunities.