Notable Reasons To Invest In Real Estate In India
August 13, 2021
A few years ago, investing in real estate was a luxury and a way to boost one’s social standing. However, with the growing globalisation, people see it as one of the most tried and tested ways to grow their investment portfolio over a span of a few years. In simple terms, investing in real estate is one of the safest avenues for investment where you can expect assured returns in the long run. While a clear decline in realty was witnessed due to the pandemic, the post-COVID realty market in India is not going to be the same. Its demand dynamics have already begun evolving and changing as new trends start flowing in.
If you are exploring real estate investment options in India, here is a closer look at some parameters that will give you a broader understanding of the forces at play while investing in real estate inIndia: –
1. Global Capital Inflow
Global capital inflow is considered one of the biggest real estate investment trends and a major sign of revival for Indian realty. This is because of the country’s solid regulatory framework which has made it an attractive destination for investing in real estate.
Also, with the turn of the new millennium, the industry has witnessed some positive signs indicating the increasing interest in investing in the real estate market. Keeping aside the fall in the real estate market owing to the pandemic, the momentum is expected to pick up soon with a renewed interest from both domestic and cross-border investors.
2. Revamped Business Models
There was a time when the real estate industry was riddled with inconsistencies. However, with RERA (Real Estate Regulatory Act), it was made mandatory for all projects to submit a deadline of completion. Owing to this, developers have had to revamp their business models to enhance their accountability and transparency.
In fact, it wouldn’t be far-fetched to say that these regulations have impacted the way real estate developers run their businesses. Furthermore, it has also helped eliminate the fly-by-night developers from the market, thus gaining back the buyer’s trust to invest in real estate of India.
3. Ever Increasing Demand
The demand curve for real estate has lesser possibilities to flatten, a fact that is fuelled by the ever- increasing population of the country. Hence, this is one of the biggest positive points for investing in real estate.
In addition to the increasing population, the rise of nuclear families and increased urbanisation has led real estate developers to focus on various segments of housing and commercial properties. These properties range from high-end luxury to mid-range and affordable segments. Going by predictions from experts, this demand is not going to slow down any time soon, thanks to the increasing salaries and easy finance options which have led to enhanced purchasing power.
4. Rising Buyer’s Market
The Indian real estate market is referred to as a buyer’s market as developers keep on introducing newer and more attractive schemes to offset the recent slowdown in the market. Additionally, they are planning to come up with lease assistance, assured rental income options, and more to encourage buyers to invest in real estate in India.
However, this does not guarantee any price correction in properties. It will be mostly seen in slow- moving inventories while others may avoid any price cuts.
5. Realising the Importance of Homes
Regardless of the unavoidable economic conditions and palpable uncertainties in the market, the present condition has also reinforced the importance of homes. People living in rental accommodations prefer to buy their own accommodation as it is the only place to keep you safe and secure.
Lower interest rates on home loans add to this sentiment, encouraging the buyers even more.
6. Rise in Demand in Peripheral Areas
In the coming years, people will prefer shifting their base to less populated areas with large open spaces and lush greenery. Also, with the rise of the work from home culture, people would want to opt for larger and peaceful places with dedicated workstations, recreational places, and open areas like parks and lawns.
Developers pivoting to city outskirts intend to build residential projects in such peripheries. Additionally, the land in such areas is comparatively affordable than the city’s central hub, allowing home buyers to invest in real estate in India even on a budget.
7. Consolidated Transaction Space
The real estate market in India, especially for residential properties is highly unorganised. While the majority of Indian realty is held by larger advisories and institutional channel partners, individual brokers and smaller advisories take care of the rest. However, post pandemic, this model is expected to consolidate with more organised players.
Additionally, the real estate market will evolve with extra focus on asset light models. Developers, realtors, advisories, and other industry stakeholders will try to cut down on their CAPEX & OPEX and work closely with channel partners to reduce the dependencies on a direct sales force. The industry will also witness the entry of other industries such as BFSI, automobile, consulting, etc. to further make a parallel source of income for them. All this taken together will help the realty of India to enrich their inventory pool. The future of real estate investment options in India looks bright for both developers and buyers.
8. Alternative Asset Classes
The residential and commercial realty sectors are growing, fuelled by a rising number of alternatives and new asset classes. This has further encouraged buyers to invest in real estate in India. Experts believe that the new asset classes will witness tremendous growth and push the real estate market towards success, backed by foreign and domestic investments.
Following demonetisation, the present pandemic situation has led to a decline in the number of people investing in real estate. However, with the aforementioned factors in play, the market is expected to grow with leaps and bounds. Also, if it is your first time investing in real estate in India as a buyer, considering the above factors will help you to take a well-measured decision while finalising the property of your dreams.