Indian Real Estate is going through an interesting phase, as sentiments are bottoming out in most of the major markets. Despite the absence of any notable price growth, transaction volumes are picking up in the major Indian Cities. The surge in sentiments is also backed by a significant rise in transparency in the industry. 

The industry is also capitalizing on the recent re-election of the Modi Government & the budget session that was underpinned by a growing emphasis on infrastructure, affordable homes & liquidity. Amidst such an interesting time, mentioned below are the six major trends that are going shape & reshape the industry in the times ahead.

End-User Market – a Few years back, Indian Real Estate has been marked by soaring investor activity, as they constituted near around 40% of the transaction volume. However, as the market slowed down gradually, investment activities also started to dry up & the market became an end-user driven. Although with reviving sentiments in the industry, investor activities have picked up in recent times, the market is still predominantly end-user driven. In the times ahead, it will remain the same with no chance of possible turn-around. 

Ironically this might also be the best to Invest- Although the market is mostly run by end-users; this might be conducive time to invest in Indian Real Estate. Property prices are viable in most of the major Real Estate markets in India, due to corrections in the past. Juxtaposing the recent ease out of the prices with reviving sentiments makes the present Indian property market a perfect recipe to get an attractive dividend in the middle run. As property prices are attractive, investors should bet on the industry & capitalize on the resurging sentiments. 

Affordable & Mid Income Homes will get a thrust: The time for affordable & mid-priced home (less than 45 lacs) has finally come in India. As home shortages continue to soar high, there has been a pressing need to take emboldened steps to bridge the gap. Fortunately, the government has been taking proactive steps to address the challenge. In its 1st installment, it gave infrastructure status to affordable housing, offered financial incentives to buyers & devised innovative mechanism to raise fund. In the maiden budget of the 2nd term, the government continued its commitment towards affordable homes in India. In the times ahead, the affordable & mid-priced segment will constitute a sizable part of the market.

Real Estate Growth will be pinned on Infrastructure Development: Infrastructure growth & demand for Real Estate are interlinked with each other. The influence of Infrastructure on Real Estate is multi-faceted. On one hand, growth in Infrastructure acts as a catalyst for more economic progress thereby spurring housing demand. On the other hand, major infrastructure projects such as ring roads, railway lines, metro networks, airports etc. - attract commercial activities in its vicinity, thereby resulting in a spurt in land prices.  Jacking up of land prices in conjunction with growing commercial activity feeds into residential demand, thereby thriving residential market in the vicinity.

As the government has proposed a massive investment of INR 100 lakh crore in Indian Infrastructure, Real estate is expected to get a boost. On the back of growth in infrastructure, new urban corridors will evolve & surge in activity will unravel in the suburban areas. Real Estate activity will also pick-up in townships & rural parts of the country on the back of infrastructure growth.

 Organization & consolidation in the sector- In the times ahead, more organization will follow in the Indian Real Estate industry. As the government has taken some praiseworthy decisions in recent times in the form of RERA, GST, Demonetization, REITs, etc.- the overall industry is organizing & consolidating. Over the past 5-6 years, the number of developers in major Indian cities such as Gurgaon, Noida, Mumbai & Chennai, have shrunk by around 60%. As major corporates such as Tata, Adani, Godrej, Mahindra, Adani, etc. will continue to expand their foothold in the market, the consolidation in the industry will continue to unravel.

Industry consolidation will be very beneficial for the overall industry dynamics as it will ensure timely delivery of the projects, enhance overall project execution, cultivate buyer confidence & streamline the market by addressing the supply-demand dynamics.

Increased Organization in the Transaction Space as well: As the realty market will continue to consolidate, the transaction space will also evolve rapidly. In a market that is highly unorganized & run by brokers, larger advisories such as 360 Realtors, Square Yards, Anarock, Investor Clinic, etc. are making a notable mark. Often called Institutional Channel Partners (ICP), these advisories currently control around 10% of the transaction space in major cities. This will grow further, as there is a pressing need for agnostic, unbiased & value-added advisory in the realty space.  Interestingly, the growth will emanate from both metros as well as tier 2 cities.

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The Writer is a Founder and Managing Director of 360 Realtors.