Last year, Real Estate sector in India has witnessed a significant transformation with the implementation of reforms such as RERA and GST. This year look promising for real estate in India, and the growth prospects in 2018 look brighter than ever. 2018 looks promising for a good supply of houses across major Indian markets.
Global capital flow into Indian real estate will increase further, as per the World Investment Report 2016-17, India has been ranked fourth for FDI inflows, by the United Nations Conference for trade and development. Improvement in the regulatory framework, has built up an attractive destination for both global and Indian investors. Indian real estate has attracted USD 32 billion in private equity so far. Due to transparency, NRIs find country’s real estate market more reliable.
Developers will revamp their business models, developers launched lots of projects and there was no guarantee of completion of the projects. Now, through the RERA act, a deadline has been given for the projects to be completed. It will force developers to improve their business model. The developers will require to bring more transparency as well as accountability in their system, and do a lot to increase consumer confidence.
Also, the Goods and service tax (GST) as well as the Benami transactions (Prohibition) amendment act, will have a major impact on, how developers run their business. Developers, should bring changes in their business models to sustain in the market.
The REITs will have an important and long-term impact on developers, with the choice of either ‘corporatizing’ or risking taking over, by their larger counterparts.
Here are the trends that are expected to reshape and redefine the sector:
1. Real estate developers are transforming their business models- Recently implemented reforms such as RERA, GST and the Benami Property Act have enforced a greater level of transparency, accountability and quality-on-time on the part of real estate developers. Projects are therefore much more reliable and meet the set standards.
2. Workspaces are evolving into ‘co-working‘ spaces- With the fast evolving work culture in India, regular office spaces will give way to more hybrid co-working spaces. Corporates and co-working operators will now work in tandem, which in turn will benefit the real estate economy and also increase cost-efficiency, productivity and employee retention.
3. FDI into real estate will increase further- With the launch of the launch of REITs (Real Estate Investment Trusts) in 2017 and the enhanced transparency in real estate transactions, the real sector will attract even more global investors than before.
4. Affordable housing is witnessing a revival- By 2019, there is a target of building one crore new houses in rural India. The Housing For All agenda has been fixed for 2022, and affording housing in India is receiving the much-needed infrastructural attention in order to meet the set target.
5. REITs will enable significant growth- REITs are expected to add significantly to India’s growth story. As more and more office spaces in India become REITs complaint, a variety of institutional and smaller investors will put in their money in return for regular dividends at relatively low risk.
With the growing trends in real estate sector, people are now moving for investment in small scale as well. Real estate investing, even on a very small scale, remains a tried and tested means of building an individual’s cash flow and wealth.