Indian Real Estate Market in 2020 - Where is it heading to?

The Indian real estate sector has come a long way in the past decade. We have seen a huge growth in demand for both the residential and commercial sectors. The market has witnessed a massive transformation during the past years. More people are now moving towards the major cities in search of an income source that attracts more residential property buyers. The major sources of income in the metro cities are increasing and so does the demand for residential properties… err with a catch.

The tier 1 cities such as Mumbai, Delhi, Chennai, Bangalore, Kolkata are now reaching their limits due to a shortage of lands, finance, and high prices. One solution to this is that there are many emerging cities to be the most sought after destinations this decade. This statement is backed up by the government plans of implementing Smart Cities’ mission planned to set in motion in 2020 providing a substantial push in terms of growth of the industry. Under the scheme, the government is promoting to develop new infrastructure for transport and logistics. These initiatives will prove to be beneficial for cities like Agra, Kota, Pune, Nagpur, Indore, Vizag, Kochi and many others.

Generating revenues and attracting investments will still be handled by the business capitals, but cities such as Nagpur, Indore, Ahmedabad, and others will be more attractive markets for affordable properties. The real estate investment has seen a rise because these cities possess a growth potential that can even rival the major metropolises. The increasing industrial growth and a good job market witnessed in tier 2 and 3 cities have attracted buyers and real estate developers to expand the residential segment. These cities are well connected to the metro cities with improved transport infrastructure with major highways, railways and even airways.

The sentimental values also play a vital role when purchasing an apartment in low tier cities. The population employed in the service sector ends up living away from their families in order to earn their living in the major metro cities. However, with the change in residential real estate growth and the possibility of investing in a home, earning members can live closely or even with their families.

The mindset of the younger generation is different from what our forefathers had. They are now shifting towards living in nuclear families, they are researching the market online, the demand for shared space is increasing, and the affordable housing segment is in demand. Affordable housing is one of the biggest emerging trends in the Indian real estate sector. Most of the real estate buyers prefer buying a house that is affordable. Even the government of India offers various schemes and sections for affordable housing. Some of them include Pradhan Mantri Awas Yojana (PMAY), with tax benefits under Section 80EE, Section 24 and Section 80C.

The real estate sector in India has witnessed a shift with the advent of technology. Today people are shifting from traditional living standards to high-tech living that meet their expectations. Individuals are opting for smart homes where comfort and convenience are within hands reach. Most of the working professionals are shifting from rural areas to cities for better livelihood. This migration of population has resulted in increasing demands for co-living or co-working spaces. Most of the migrating working professionals prefer co-living spaces that is budget-friendly and have less impact on their financial spends. This trend is not only about sharing cost and space but it relates more to belonging to a particular community.

With such a shift, the real estate industry should also adapt to be at the right place at the right time to provide the best experience to the buyer that creates a fast-paced home buying process and better economic growth.