Weak condition of the Indian Economy in the last year made a lot of people doubtful about investing in the real estate market. However, as per a recent research conducted by Knight Frank India, the Indian real estate market is expected to revive in the year 2020. In 2019 as well, the property market in India remained stable with prices either flat or falling.
Let us understand how major real estate markets of India like Delhi/NCR, Mumbai and Bengaluru fared in 2019 as compared to 2018. Refer to the table below.
|Real Estate Market
|Change in Average Price
|Change in New Launches
The study shows that Ahmedabad had the highest percentage of new launched properties at 11,487 followed by Hyderabad with 13,495 properties launched in the year 2019. As opposed to the other major markets, Hyderabad also rose above the trend and saw a 10% increase in the average property price.
Delhi/NCR saw a 5% increase in average price and a 45% increase in the number of new launched properties in 2019 and there was also a 5% increase in sales as compared to 2018 with 22,976 properties sold. As opposed to this, Mumbai real estate market saw a fall in average price as well as the sales.
For the last few years, the government’s focus has been on affordable housing and the trend is likely to continue in the coming years as well. The default of several banks and NBFCs had a direct impact on the real estate sector in 2019 and so a number of projects were stalled for a long time. In November 2019, the government announced a Rs. 25,000 crore bailout fund that would help more than 1,600 stalled projects in different cities. This does not only help the real estate developers who have failed to complete their project due to lack of funds but will also finally give possession of homes to the customers who have been waiting for a long time.
Prime Minister’s goal of Pradhan Mantri Awas Yojana which was launched to provide affordable housing solutions to the urban poor population of the country is also expected to be completed in 2022. This is why it seems that the focus of the government will be on affordable housing.
Despite the slowdown in the economy, the demand for real estate- both residential and commercial- has been stable and is expected to continue in the same way. There have been several reforms to encourage growth in the construction, logistics and retail sector which would again give a major push to the real estate sector.
The study has also shown that though positive trend is expected for affordable housing in India, the luxury real estate market will remain stagnant as there are already several unsold units.
So, if you are looking forward to investing in real estate in India in 2020, it is best to go for residential projects from affordable categories or commercial real estate such as office spaces, retail spaces, plots, etc.