Real Estate market in India is slowly recovering from the cumulative impact of GST, Demonetization, and RERA. With sales in all 8 key markets showing growth, albeit, on a smaller base, the consumer sentiments seem to be strong. The common industry consensus seems that the sector will grow from USD 120 billion in 2017 to USD 1 trillion in 2030.
The demands for both residential and commercial spaces remain strong in the 3Q-2018. New launches in the top 8 metros went from about 34,000 units in Q4-2017 to 43,000 units in Q2-2018. On a national average basis, the property increased by nearly 5% during the same period. Similarly, in the commercial real estate space, the 8 million more sq. ft. were leased in H1-2018 as compared to H1-2017 driven by Bengaluru and NCR markets and the absorption rates in Mumbai to soon go beyond the supply rates in Mumbai Property market.
The new launches in the residential space crossed the 40,000 unit mark after 8 quarters in Q2-2018. Government initiative such as Pradhan Mantri Awas Yojna (PMAY) has provided a huge boost in the incremental launches and rise in absorption rates in Tier – II and III markets. Of the 6 million units sanction under the PMAY, 1.4 million were sanctioned in FY2017-18 alone. Funding of INR 60,000 crores to National Housing Board will provide the necessary liquidity to drive the grand scheme such as PMAY.
The confidence of foreign players in the Indian Real Estate market also stands strong. According to data from Dept. of Industrial Policy and Promotion (DIPP), nearly USD 2 billion was infused by PE and VC players in the commercial real estate development sector for the period January to August 2018.
With growing FDI, the launch of several REITS and Government push for greater transparency in process approvals, the real estate market is poised for long-term growth.