Emerging Housing Trends in 2019
The year 2019 looks to redefine the Indian reality space
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Cautious optimism has replaced the indefinite anxiety that had plagued the Indian real estate sector for the last few years now. A slew of policy initiatives and push towards reforms by the government have once again made the Indian real estate market shift gears and adapt itself to the growing needs of the rising populace in the country. The year 2019 looks to redefine the Indian reality space. The speedy completion of infrastructure projects, focus on affordable housing and the impact of big bang reforms – RERA and GST, is likely to push the growth button for the Indian real estate sector in the coming year and provide continuous consolidation in the market.
The last decade saw delayed or no assurance of multiple projects that we're seeing simultaneous launches without any surety of their completion, owing to lack of strong regulations in the Indian property sector. But now, with the enactment of RERA Act (Real Estate Regulation and Development Act, 2016), a deadline has been fixed for the projects to be completed. This move will make developers rejig their business models in the coming year and allow for timely execution and completion of projects.
The coming year is slated to be the year of execution. With a large number of projects still struggling to reach completion and running behind schedule, 2019 could see a good supply of houses, across the major markets of India. The residential market will be driven by transparency and consolidation with a huge push towards the affordable housing, a segment that will usher the dawn of resurgence for the Indian realty market.
Riding the Affordable wave
Affordable housing is being termed as a silver lining for the sector that will give the government's dream of "Housing for all" by 2022 a much-needed push. Providing big-ticket opportunities to both the developers as well as the investors in the coming year, affordable housing segment that was anointed with the infrastructure status in the Union Budget 2017-18, it is expected to grow at a high rate. This segment will help in fulfilling the shortage of around 40 million houses that the country faces. Therefore, the affordable housing segment is likely to witness a high demand in the coming year as against the luxury and the mid-housing segment that was holding the focus of developers till now.
With the country being ranked fourth in terms of FDI inflows according to the World Investment Report, it clearly indicates the augmenting interest of foreign buyers and investors in the Indian markets. Also, we expect real estate sales momentum to continue with reforms paving way for increased transparency, investors will find their way back to the residential markets in 2019. Also, a key but gradual shift will be visible in the source of capital for the real estate business. Dipping or missing profits and a number of dubious practices were marring the image of the real estate sector in the country, getting money from the Reserve Bank of India were becoming a challenge. But with a slew of policy measures, the tide is turning with Private equity funds and pension funds set to become the primary and consistent source in the coming year.
Dawn of the First Time Buyer
A growing economy and persistently rising real estate prices are making a number of potential first-time buyers realize to foray into the market and make their purchases. This is adding on to the sales volumes with the primary focus being on projects nearing completion that is drawing the maximum attention and investments.
Senior living and students housing are the two upcoming segments that will hold key focus in the coming year. With the estimated senior population the country expected to touch 240 million by 2050 from the existing 98 million in the country, the senior living sector is likely to see heightened activity.
The emergence of Newer Markets
With the primary real estate markets reaching their peak and becoming unaffordable for the buyers, emergence of tier II and tier III markets are taking on the spotlight. 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.