India has become the 7th biggest economy in the entire world after toppling a few first world countries on the list. India is considerably growing and providing elegant markets for the multinational companies to find a perfect spot for a functioning branch. The increase in foreign investments from the reputed brands is also creating an advanced sphere where the professionals are availing excellent job prospects in the industrial hubs of the leading cities.
The trained and experienced mass is migrating to the leading cities in India in search of proper career platforms and settling down there for a better future. It means that the real estate segment is indirectly driven by the growth in the migrating population. This factor is being perfectly utilized by the reputed real estate brands. They are creating flagship ventures where these modern families can find a new home and settle down perfectly. Despite the growth in the economy and the advent of new jobs in the market, the real estate industry is currently facing a downfall.
Past market performance back in 2017 and 2018
The real estate industry was in its golden era back in 2017 and 2018. The demand and supply of the real estate properties, both residential and commercial, were pretty high. Due to the media and international corporations, the real estate industry gained traction for a few years. The cities like Delhi, Mumbai, Bangalore, Chennai, Pune, Hyderabad, and Kolkata caught the eye of the real estate brands because of the increasing demand for real estate properties.
By 2018, the real estate industry showed a formidable comeback despite the demonetization effect in 2016. Here are some statistics that will show how the market came back with a bang in 2018.
- The percentage of sales increased by 26% in the first half and grew even more lately.
- The second quarter of 2018 showed a huge increase in new property launches from 38,324 in 2017 to 42,975. As per the report from Knight Frank, the launches increased by 46% in 2018 in comparison to 2017.
The cities started to urbanize the suburban locations and created a better platform for the development of new more projects. Mumbai is still showing the highest real estate rate in terms of asset prices and secured 18th rank in the world index.
Current trends in the Indian real estate market
Low acquisition rate
The real estate market in India is witnessing a downfall due to various reasons. The affordability of the assets has literally worried the current population. As per the current trends, the real estate properties developed are being slowly acquired by the investors. Despite the increase in migration of trained population in the leading cities, the rate of acquisition is declining as the disposable income of the mass is not increasing in that rate.
Demand in increase later and so will the price
Due to the reduced rate of acquisition, the bigger brands are currently stalling new projects right in the dormant stage and confirming the acquisition of the new properties countrywide. The sale of the previously built assets will be pushed before new projects established in the market.
The demand for new launch properties will also rise in due course of time which will also result in the increase in the price of new properties. The rate of increase in price will not be that impressive though. Due to the rapid urbanization of leading cities in India, the migrating population will find ample options to choose from. The price will increase but at a lower rate.
Middle class and upper middle segment growth
India has one-third of the total poor population of the world. Despite the big number, the financial condition of the upper middle class and middle class will earmark the rising economy of the country. The GDP growth rate is rising considerably giving higher hopes to the real estate companies as the number of customers for the assets developed by them will also increase simultaneously.
Affordable housing plans
The number of affordable housing plans will outnumber luxury plans. The average price range of these residential units will range from INR 15 Lakh to INR 30 Lakh.
The NRI segment will look for more lucrative investment as the Indian currency is losing its value in the international market. The market will definitely grow but the rate will be slow.