2018 has been year of real estate’s revival story. It was a year in which we reaped the fruits of the seeds sown in 2017. RERA and GST, aimed at bringing in more transparency in real estate transactions and giving the homebuyer their rightful due were introduced in 2017 and implemented across the country. While the going was tough and cumbersome initially, real estate companies eventually tweaked their processes to accommodate the mandated changes and the entire sector is now better for it. 2018 also saw various trends become more mainstream and we see them becoming a positive real estate mainstay.
Let’s look at some of these real estate trends of 2018:
RERA has put a big thrust on transparency in the real estate sector and has ensured that buyers are more aware of their rights. Many developers have responded well and have been timely in terms of completing projects and handing over possession which is great news for homebuyers everywhere. Overall developers have become more compliant and transparent. The industry has also seen major consolidation - the more robust and better capitalised companies have survived and charted growth stories.
Rising Inflow of Global Capital
With the first REIT portfolio flagged off in 2018, the Indian real estate sector has witnessed a rise in investment inflows from global institutional investors. A transparent, better-regulated market thanks to RERA, has also been a major stimulant for attracting the domestic as well as foreign investors. The foreign investments are also flowing in with better governance and management systems, and business models. This is good news for the industry as a whole as more quality capital will be available.
Increase of Hybrid Spaces
Commercial real estate has seen a remarkable year in which the demand for large open-plan offices has outstripped that of regular cubicle-type offices. The Indian startup economy has had an exciting 2018 and more startups are being registered than any other year before. This means rising demand for co-working spaces which are economical, make optimum use of limited resources, and provide a fertile platform for collaboration, exchange of ideas and higher networking opportunities. Millions of square feet across major Indian cities were purchased or leased by big names in the co-working development space with a view to developing quality office space.
Rise of Smaller Cities
The sustainable growth of mega-cities like Delhi and Mumbai can be best managed by the emergence and growth of smaller cities which meet the aspirations of people wanting to live in or near cities. There has been an increased focus on improving infrastructure and connectivity in tier II cities. Furthermore, a number of businesses are also moving away from big cities to Tier II cities. This has resulted in demand for quality housing in these cities and thus more vibrant and sustainable realty markets.
Emergence of New Sectors
The real estate industry in India is rapidly expanding to accommodate new assets such as student housing, senior living and co-working spaces. More senior citizens are choosing to spend their retirement in specially designed retirement communities which cater to their specific requirements. Similarly, as more young Indians opt for higher education degrees the emergent sector of student housing is growing. India’s booming startup economy is also fuelling demand for co-working spaces with commercial buildings now being designed as open plan spaces which can be leased or sold as co-working offices.
The growth of newer cities bodes well for those looking to move closer to big cities and access quality infrastructure. Similarly, the growth of new sectors enables developers to expand their portfolios and create more robust business models. The latter could be a result of partnering with global entities who can introduce better and sustainable practices. Overall, 2018 has been a harbinger of hope and created a template for a cleaner, transparent and well-regulated real estate market which can be further built upon.