In India, the real estate sector has been growing exponentially and is considered to be one of the best investment sectors in the country. Real estate sector comprises of four sub sectors - housing, retail, hospitality and commercial. The growth of this sector can be attributed to the growth of corporate culture and the rising demand for office spaces. The housing sector is on the rise to accommodate people who are gradually moving to urban areas in search of jobs. The other sectors like retail and commercial are also flourishing to provide much needed infrastructure to match India’s growing needs. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.
In the coming years, it is also expected that the real estate sector would attract more Non Resident Indians (NRI) investments. Bengaluru is one of the most favoured property investment destinations for NRIs, followed by cities like Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
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It is estimated that the Real Estate Sector in India would contribute to 13% of the country’s GDP by 2025. India’s real estate sector is expected to reach a market size of US$ 1 trillion by the year 2030 from US$ 120 billion in 2017. Not just the housing sector, but the other real estate sectors like Retail, hospitality and commercial real estate are also growing to provide the necessary infrastructure for the population in India.
In the present scenario of the country’s real estate sector the IT, retail, consulting and e-commerce have registered high demand vis-à-vis renting or acquiring office spaces. Commercial office stock in India is expected to cross 600 million square feet by 2018 while office space leasing in the top eight cities is expected to cross 100 million square feet during the year 2018-2020. Grade-A office space absorption is expected to cross 700 million square feet by 2022, with Delhi-NCR contributing the most to this demand.
The growth of the Indian real estate market has been significant. Presently, there is a rising demand for office spaces as well as residential apartments. Not only is there a rise in affordable housing units, but also luxury and premium projects like Malls, private hospitals and retail outlets. In the tier 1 and tier 2 cities, the prices are expected to escalate as the private equity investments in real estate would grow to US$ 100 billion by 2026. Private Equity and Venture Capital investments in the sector reached US$ 2.99 billion during January-August 2018.
Real estate seems to be flourishing, considering the rising demand. The sale of housing projects has been affected due to the introduction of GST and RERA. The market trends show real estate has performed poorly in comparison to equity and gold this year. Equity is volatile whereas real estate is not that volatile. Therefore according to the experts, despite lower returns, it is always advisable to invest in assets and real estate as it diversifies investments as well as it’s a safe investment.
The Union Government has taken some initiatives towards strengthening the real estate sector in India.
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