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1/2/2019

Real Estate 2018: Recovery Underway; A Cautious Year Ahead

Impact of regulatory reforms like RERA and GST on the real estate sector was felt in 2018 with all stakeholders — from realty developers, property buyers to real estate brokers — are now accepting the new realty market realities. Accountability and transparency repositioned the Indian real estate sector. In fact, the first three-quarters of 2018, supply-side stakeholders were able to build the narrative that the sector is showing a sign of recovery. 

The housing sales rise 50% in 2018 across major cities but towards the end, the non-banking financial crisis (NBFC) vanished all the hopes of strong growth and threatened to refute the profits made during the year. The present NBFC crisis may impact the execution of project and deliveries in 2019.

Affordable Housing: Pushing The Pedal On Residential Real Estate

In the last few years, due to the numbers of piling inventory and lack of buyers, realty developers realized that they first need to focus on completing their existing projects rather than launching new projects. Therefore, the year 2018 saw the demand for affordable housing and it took the center stage in the sector, helping residential real estate to slightly recovering from its lows in last year.
Real estate developers increased their focus on the affordable housing segment backed by the government incentives. Pradhan Mantri Awas Yojana (PMAY) not only pushed real estate developers towards the affordable housing segment but also contributed to increased homebuyer interest in this segment by giving buyers many benefits.
Finally, real estate developers aligned themselves with new market realities by providing more ready-to-move-in apartments to offer more certainty to property buyers. That is why buyers are also showing more preference towards choosing such properties. 

Commercial Sector: Co-working spaces push growth

The year 2018 marked a significant rise in the demand for Grade A office stock. While co-working space emerged as a strong investment option in commercial real estate. India's first REIT listings unlikely to get listed in early 2019, will help commercial property developers to focus more on the commercial office space. Also, the demand for office space will see a rise from various sectors such as logistics, consumer goods, and manufacturing, apart from IT and ITeS and the banking and financial services sectors.

How will 2018-19 be for real estate? 

2019 will start as a cautious year, where realty developers will look to consolidate the existing projects before launching new projects and due to the market consolidation, it is expected that the real estate market will be more transparent, efficient and promising one for investors.

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