Signs of Market Bottoming Out, Emergence of New Growth Destinations & Major Policy Changes in Anticipation

In tandem with the global realty, Real Estate in India is also showing signs of positivity with markets bottoming out in the major cities. Although there is a prevalent tendency among buyers to wait so that prices can further slump, selected markets across every city are showing impressive growth- both in terms of surge transaction as well capital value.

The common underlying factors- Driving the growth of most of the residential markets include- Large employment base in vicinity, economical pricing & an upcoming infrastructure.

The demand is more concentrated in the budget segment ranging between 25 to 70 Lacs categories according to the research conducted by Square Yards Global Intelligence Cell (GIC). The research that has analyzed 9 major cities over the last six months, indicates that nearly 27% of the total demand falls within the INR 40-70 lacs range followed by 19% in the INR 25-40. Thus, the 25-70 Lacs sub-category constitutes nearly 50% of total demand.

The demand is more concentrated in the budget segment ranging between 25 to 70 Lacs categories according to the research conducted by Square Yards Global Intelligence Cell (GIC).

Nearly 18% of the demand fall in the INR 70 lacs to 1 Crore segment & 13% of the total demand comes under the 1-1.5 Crore category, as revealed by the research.

With positivity reemerging in the market, developers are once again back with new launch projects, with attractive payment schemes to lure buyers. There is also strong emphasis towards completing the existing under construction projects.

In terms of individual cities, doldrums continue to linger in NCR, that is suffering from one of the largest inventory of unsold stocks. In Mumbai Metropolitan Region (MMR), the commercial capital of the nation, positivity seems to be coming back, although it is more focused on the peripheral areas such as Thane & selective locations in Navi Mumbai. In the Mumbai City, other areas that are demonstrating impressive growth are, Kandivali, Goregaon & Dombivali.

IT/ ITeS centric cities such as Bengaluru & Pune have been doing better. Although, the former suffers from a large inventory overhang, especially in the high budget segment. In the Budget & Mid segment, inventory turnaround is swift. In Pune, upcoming peripheral locations such as Lohegaon, Kharadi, Bavdhan etc. are clocking significant growth numbers, in terms of price appreciation.

In Pune, upcoming peripheral locations such as Lohegaon, Kharadi, Bavdhan etc. are clocking significant growth numbers, in terms of price appreciation.

There has also been substantial progress across various policy initiatives proposed in the recent times. In the Budget Session, the government has removed the Dividend Distribution Taxes (DDT) on the REITs thereby taking a step ahead towards implementation.

A list of 33 cities have been determined for the 1st round of Govt. Funding for Smart City Project. In coordination with the Smart Cities, there has been an uptick in the Housing for All initiative with participation started to coming in from the public & private sector.

Both the Smart City & Housing for All in tandem is expected to make a significant impact on the urban development landscape of India & can slowly & gradually transform urban development into a major economic driver itself rather than being a by-product of development.

The Smart City & Housing for All in tandem is expected to make a significant impact on the urban development landscape of India & can slowly & gradually transform urban development into a major economic driver itself rather than being a by-product of economic growth.

There has been continued interest from Private Equity (PE) Investment in Indian real estate industry over the last 6 months comprising of both entity & project level deals. However, on Year on Year (Y-o-Y) basis there has been a slump.

National & international investors such as Piramal, Motilal Oswal, KKR, Blackstone & L&T Finance have been active in the Indian real estate markets. PE could be a major source of capital for Indian developers in the times to come.

National & international investors such as Piramal, Motilal Oswal, KKR, Blackstone & L&T Finance have been active in the Indian real estate markets. PE could be a major source of capital for Indian developers in the times to come.

With 100% FDI allowed in the sector, various other foreign players are putting Indian realty in high up their agenda. According to International Property Consultant (IPC) JLL India, large number of Japanese & Chinese players are looking to invest into the Indian real estate markets.

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