The Indian real estate market has been through a period of tumultuous change in the last few years. Demonetisation, the introduction of RERA and GST have fundamentally changed the way business is conducted. The residential market in particular has been in the midst of a slowdown on account of inappropriately inflated property prices, project launches based on an over-estimation of the size of the luxury market, unsold inventory, slowdown in rentals and the overall negative sentiment of homebuyers. As the residential property market begins to recover, developers have recognised that demand in residential property is not in the luxury market but in the smaller, more practical units, which make them more affordable.
Future Trends & Challenges
World population is expected to quadruple by 2050 and this will put severe strain on all resources – food, water, housing, energy and waste management among others.
Providing healthcare and support systems for ageing populations as medical advances increase lifespans will be a major challenge.
- Affordability will be the key factor in the future with efficiently compact, modular homes having an advantage over sprawling luxury high-end properties.
- Demand for ‘Smart Homes’ with integrated home automation systems that control lights, home appliances and security systems will rise.
- ‘Green Homes’ that are sustainable and eco-friendly are already popular and will continue to gain popularity as families seek refuge from the hectic environment of daily life in crowded Metros.
- As rapid transport options improve and work-from-home culture becomes prevalent, location-based pricing of property will become less relevant.
- As more families travel-for-work, tenancy will become more common than ownership as their lives become migratory. This may also lead to longer tenures for property mortgages.
As the real estate market changes to cope with these changing customer needs and expectations, those that can offer affordable housing with ‘smart home’ benefits will benefit. The Indian Government and developers are already focusing attention on providing affordable housing to the lower income and economically weaker sections of society.
The overall real estate market in India is expected to touch USD 1 trillion by 2030, becoming the third largest globally, according to a recent survey. The survey noted that India has consistently improved its ranking in global real estate since 2014, which has instilled confidence in investors, driven by emerging asset classes such as affordable housing and co-working spaces.