Demand for residential projects witnessed a revival and led to a fast-paced absorption of housing units in 2018. The coming year is expected to flourish on the back of increased regulation triggered by new reforms and policies introduced in 2017.
The real estate industry has been going through an eventful phase post demonetisation in 2016. The new reforms, policies and regulations have impacted the real estate industry both positively and negatively. These changes are going to be fruitful for the industry in the coming year as they are bringing in a lot of transparency to the system and reinstating the confidence amongst buyers and investors. There is a short-term pain, but it would be a win-win situation for everyone in the long term.
The demand for residential projects has seen a healthy growth in the first half of 2018 and the key markets witnessed absorption of housing units at a fast pace. Factors such as lower interest rates, budget-friendly housing schemes and affordable houses coupled with price rationalisation by the developers were some of the major constituents to fuel the growth of the residential sector this year. The housing demand was mostly driven by the end-users and rightly so, as they took advantage of the favourable market conditions, as well as transparent regulations due to the advent of RERA. Customers are still willing to pay a premium for good brands and locations, which has a superior social infrastructure, proximity to workplace, better security, minimal traffic and less pollution.
The commercial or office market has picked up pace in the last couple of years and the credit goes to the stable government and marquee reforms like 100 percent FDI in real estate, grant of infrastructure status and finally the Real Estate Investment Trusts (REITs) getting government approval in India. The concept of co-working spaces has given a fillip to the office markets and has changed the whole dynamics of office, converting them into flexi-spaces with just plug-and-play concept. The start-up boom has disrupted most of the traditional businesses and going ahead; technology and Artificial Intelligence (AI) would be playing a major role, as India is inching towards smart cities and adopting newer technologies.
Hospitality is emerging as one of the most profitable sectors among real estate developers with a lot of interest being shown in for leisure as well as business hotels. India’s domestic demand is likely to surge past any other demand in the near future.
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