The Indian real estate sector has been through many ups and downs in the last couple of years due to the fluctuating market, yet has stood the test of time and remained faithful to investor expectations. Experts believe that the Indian real estate market will continue to do well even in the coming year.
Young investors can quickly characterize the real estate market in India as ‘slow’ or ‘boring. But real estate benefits all the investors except the gamblers. Today, commercial real estate funds are making their presence felt in the market since the idea of earning a regular passive income from safe real estate investments have found greater interest with the small-time investors. The coming year is said to bring more options for these investors, who do not have a handsome portfolio yet worth crores.
In the coming year, an 8 to 9 per cent overall growth in the economy is expected which will see a rise in the jobs and a bounce back from the recent slump in the stock market. All these would eventually contribute to an increase in the demand for housing and more people would enter the housing market, which will be beneficial for the real estate economy. The government has been planning and implementing infrastructure mega-projects like highways, new airports, metros, etc. as well as undertaking major policy initiatives such as ‘Housing for all’ and the Pradhan Mantri Awas Yojana.
It is needless to state how these things drive the growth quantitatively and qualitatively in real estate assets. Experts believe that low interest rates might make a significant positive impact on the real estate industry along with the government’s recent roll out of numerous tax related and other incentives that are aimed towards potential house buyers as well as streamlining of the mandatory bureaucratic work. The often overlooked and passed on tier-II and tier-III real estate markets will benefit the most from these positive developments and would fetch high returns for the investors.
Commercial real estate is considered as one of the most attractive assets in the real estate market. The commercial real estate sector will get healthy returns as major IT companies are switching back from online to offline offices. Many retailers are now gradually opening in-person stores post the pandemic. E-commerce firms are spreading wisely by expanding their warehousing and logistical operations. Many renowned IT companies are moving a significant chunk of their manufacturing to India and more companies are on their way as India is soon going to rise among the world’s top silicon chip manufacturers due to the current state of affairs between China and the US.
The housing market is the driver of growth and sustainer of the entire real estate economy. It is expected to witness its potentially best year from the coming year onwards. Residential sales have gone up by a whopping 51 per cent post the pandemic. Sources believe that the prices are expected to rise nearly 7.5 per cent all over India, 4-5 per cent in Mumbai and Delhi, 5.5-6.5 per cent in Chennai and Bengaluru along with a number of other economic indicators with a positive growth.
The real estate economy is not perfect and has certain weaknesses which could pose a challenge to its growth, such as increasing mortgage rates, inflation and building material shortages. If these issues are limited in scope and localized, they do not create much of a problem. A growing economy, returning to the normal pre-pandemic work structure and the various government initiatives all combined together will create a conducive environment for the prosperity of the real estate market in the future.