After a downturn and a general lull in the real estate sector in the last few years, the Indian property market is once more showing signs of growth. The real estate sector is one of the largest employment generators in the country but its progress is also closely dependent on the developments in other major sectors such as retail, IT, hospitality, infrastructure etc. The focus is primarily on the end user demand and is further dependent on other factors as well.
So what are the factors that are driving this growth and investment?
Urban Population
The rising population in India means that the need for quality housing and infrastructure will always be on the rise. Rising number of nuclear families with increasing disposable incomes is the core consumer group that is pushing the real estate market. In fact, India’s urban population is expected to rise above 850 million by 2050 (more than 50% are expected to be in the age group of 20-55 year, a core income bracket with spending capacity) and the demand for real estate is only expected to rise further.
Increase in Demand in Tier 2 and Tier 3 cities
So far the majority of the real estate market has been driven by the metro cities such as Mumbai, Delhi, Chennai, Kolkata and Bangalore. But with decades of growth in the housing sector, these bigger metros are facing problems such as high land and construction costs, limited land resources, very high property prices, infrastructure woes, lessening demand etc. This has meant that builders and investors are shifting their focus to Tier II and Tier III cities such as Chandigarh, Coimbatore, Vadodara, Jamshedpur, Ahmedabad, Surat, Vadodara, Coimbatore etc. In contrast to the bigger metros, these places offer affordable land and labor, a large consumer base with higher incomes ready and willing to invest in quality real estate, better price appreciation as well as government policies aimed at fueling rapid growth in smaller cities. All these factors are contributing in making these cities a lucrative market for real estate growth and investment.
Affordable Housing
With a growing populace, the demand for housing has been on a steady rise and is expected to further increase. Where earlier the focus was on luxury and mid segment housing, the concentration is slowly shifting to affordable housing. Government initiatives such as Pradhan Mantri Awas Yojana, Housing for all as well as the rising requirement from Tier II and III cities has been a key contributor towards this growth.
Infrastructure Development
Sound infrastructure is one of the key factors that drives real estate growth. Enhanced connectivity via railways, air, roads and proximity to medical facilities, educational institutions, entertainment hubs, retail market, business centers, schools, retail outlets etc. accelerate real estate prices as it is the most preferred aspects for a buyer to choose a property. With the government focused on pushing infrastructure reforms, the realty sector can only expect a boost in quality housing demand.
Also Check: Luxury Flats by Mahindra Luminare in Gurgaon
RERA
The Real Estate (Regulation and Development) Act, 2016 or RERA is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. Implementation of RERA, GST, Benami Property Act have brought in the much needed transparency, accountability and have also given home buyer rights and protection while conducting a property transaction. In addition, RERA has put the onus on the builders for timely delivery of projects, pricing flexibility and payment structures.
Home Loan Rates
Previously a home buyer had limited options while raising funds to purchase a property. But with many home loan options from reputed housing loan companies available, acquiring the funds to buy that house has become easier. Home loan rates play a crucial role in the demand for housing projects, higher rates deter buyers whereas flexible rates means an increase in demand. Attractive home loan rates and tax relief on home loan interest announced in the current budget will help stimulate demand for affordable housing and also attract first-time homebuyers.
With the real estate sectors reviving itself after a slump, one city that has emerged as a favourite real estate destination is Chennai. Better standard of living, cosmopolitan society, sound infrastructure, multiple housing options for all sections of buyers, property appreciation, ease of selling, assured rental incomes etc. have all contributed towards the growth of Chennai real estate market.
One of India’s top real estate brands, Mahindra Lifespaces has multiple projects in Chennai to suit varied buyer interests. Home buyers looking to buy
properties in Chennai can choose from Happinest Avadi which offers ready-to-move-in 1 & 2 BHK flats in Chennai, Aqualily, an exclusive gated community of elegant and well-designed 1 &
3 BHK apartments in Chengalpattu and Lakewoods that consists of 2 & 3 BHK ready–to-move-in flats in Chengalpattu.
References
1. 99acres - Factors Affecting Real Estate Price
2. Money Control - Factors Driving Real Estate Growth
3. Urban Tree Homes - Investment in Real Estate Market Chennai India
