Indian Real Estate Forecast of 2017 Expected Rise in Indian Economy

By Admin September 09, 2016 project-reviews
Indian Real Estate Forecast of 2017 Expected Rise in Indian Economy
Indian Real Estate forecast is like hitting a bubble in open space, which is by chance will hit or not. Real estate in India is its integral ingredient in growth of economy. Real estate is the treasure class that needs a high degree of diligence. Real estate market is facing boom and bust continuously. Historically, the stock market has proceeded in the couple of the years.

Since my childhood, I have noticed that each and every Indian craves for “Roti, Kapda and Makaan” and waiting for owning a property. Owning a Makaan is the basic motto of every human behind his earning.

basic need of man


Indian middle class has always built an aspiration, when the price will fall so that they can get all these three?

As per PRB’s world population data sheet, the population is on progress. The trends in infant mortality and total fertility rates have been observed. The total fertility rates have declined from 6.7 to 2.6% from 1970- 2016. According to UN (2010-2015) in India the population has grew by 1.26%. The Indian economy has seen growth by 7.3% during FY14-15, higher than forecasted GDP rate of 6.8%. If this would be consistency, the country will be stabilized to attain double growth.

INCREASING POPULATION MEANS INCRESING HOUSING DEMANDS

population growth

With this increasing population, the need for land is also in great demand. Many top notch builders are in neck to neck race. More and more housing units are being occupied that itself speaks the strengthening market of 2016 which clears the image of 2017 that occupancy of houses will increase in 2017.

Prices for landed property in 2016 second quarter has declined by 1.5% and now the wait is for 2016’s third quarter as because of Demonetization of 500 and 1000 rupee notes, it will be worth to watch to watch the results and similarly 2017 can see big upgrade in Indian Real Estate.

  • The unaffordable real estate prices forces people to stay in rented properties as they were not able to turn up their dream into reality. But the govt’s surprise of ban will cool down the real estate market hoarding down the black money.
  • It will reduce the pressure on interest rate structure which will prove to be a big relief by reducing the EMI’s on housing loans and prices can fall up to 25- 30 %.
  • The currency ban has shaken up the India’s business. The luxury and the high end segments will see a major impact as cash payments will not be accepted and the legal banking will not allow such big transactions.

demonetization effect


This was the one factor, let’s see some other reasons that will make 2017 a blooming year for the investors of Real Estate.

The Role of Real Estate Growth in Indian Economy is one of the factors behind the growth of real estate sector. The state infrastructure has gained momentous growth. Real estate sector has witnessed an inflow of billion by allowing the foreign investors to invest and the increase interest because of global funds.

Since 2013, the GDP growth was 6.3% so, the growth till 2017 can be assumed with 8% increment.

Let’s come to the main point now for the people who are willing to invest in coming year. According to the past records and the strengthening market of 2016, the housing construction and mortgage rates will increase in 2017. Due to the Federal Reserve tightening the mortgage interest rates will increase and we have seen historically the second half’s of the years has delivered good results. The improvement in housing had shown more occupancy and surely this improvement will level up in 2017.

The “Regulation and Development act” of real estate has helped people to gain more trust because India was facing tough times from last few years in real estate. The 2016-2017 will be much more profitable time period. Down we can heed to residential and commercial real estate sector growth in coming year.

regulation and development act


Residential segment is the most important part in that has been estimated as major contributor in real estate sector growth. The big change will be seen in this sector after 500 and 1000 rupee ban as it will bring transparency in transactions.

The real estate in 2017 will surely shed off the dark clouds and despite of slowdown, the country will pose a brighter picture. One reason behind the improvement could be the “Housing for all Schemes”. As the nation has completed 70 years of independence, still Lacs of people are staying on roads but according to “Pradhan Mantri Awas Yojana”, the mission of this scheme is housing for all, slum rehabilitation, promotion of affordable housing and subsidy for house construction. This scheme mission providing home to 100 cities till 2017 and this will surely boost up the Indian economy and till 2022 the scheme will be completed.


pradhan mantri awas yojna

  • Affordable section: These segments are basically for the economically weaker section. Huge number of people comes under this section that require at least 40-45 million housing by 2028, so approximately 25-30 million by 2017. Also, as per new government rule, the loans for these houses will be 1.5-2% cheaper than market rates and surely cheaper rates, is more housing absorption.
  • Luxury Housing: It is the fastest growing segment, between 2008– 2012 about 182 luxury projects have been built. People are getting attracted towards luxurious living and in greed and need of high end living. HNI’s Indian Citizenry is expected to be tripled by 2017. The villas, penthouses and apartments are with scouting features are basically attention seekers these days.
home

Commercial Segment has changed the livelihood of many people and it is spreading its base in real estate. The growing infrastructure and IT hubs demand is showing the commercial section growth. Like residential the commercial section is also fragmented into parts.

  • Industrial: the demand for online business, warehousing and transportation has increased enormously. The GST implementation has created demand in sophisticated grade. The manufacturing industries have received propellant at max. Delhi Mumbai Industrial Corridor (DMIC) has shown significant boost in real estate.
  • Retail: as per the growth rate of 2015 and 2016, the retail will surely touch the heights. This section has provided major role in real estate. CAGR (compound annual growth rate) is expected to increase by 8% from USD518 Billion in 2012 to USD850 Billion in 2017. It is expected that the absorption will reach 15 million sq. ft. till 2017.

Commercial Segment

  • Office: the major occupier of land, almost 70 million sq. ft. is for office use. Domestic Companies and MNC’s have increased in huge number in last few years. It is expected that the demand will strength over 90 million sq. ft. till 2017.

A CHUNKY INITIATIVE- MAKING SMART CITIES

Addressing the urbanization a renewal step by New Government to develop 100 cities with sustainable living is implemented by Union ministry of Urban Development. Smart cities are equipped with good infrastructure and proper system for water, transport, sanitation, power etc. the government has targeted 100 cities to increase the economy and by the end of 2017 they have set a target to allocate INR 70 billion to the budget. Although, the success of this mission will be evaluated in long term, but surely will show progress on real estate.

makes cities smart


Why changes in real estate will be been seen?

Indian real estate has seen significant changes in last decagon. Nearly 90 million Sq. Ft in 2005 to more than 400 million Sq. Ft in 2015, have been sold and that with the significant changes in country’s investment. The period was marked by rising popularity of entertainment hubs and residential options.

changes

  • In concern of real estate sector, the approval of “Real Estate Regulatory Bill” has been an important initiative. The passing of this bill has regulated clarity for both investors and builders. This act has obliged the developer to park 70% of project funds in respected bank account.
  • Urban development minister M. Venkaiah Naidu has said, the aim of this bill is to bring transparency and will help in establishing Real Estate Regulatory Transaction RERA’s to regulate transactions with timely completion. The bill is just to bring direction not crucifixion.
  • According to market the prices are driving up by 4% in June 2015 as in comparison of June 2014. The bank lending in real estate has increased by 7.5% during 2015. In 2015 it was little unstable but in 2016 is in little favorable conditions. The market has gained some momentum because of this kind of Real Estate Investment.

Indian real estate market has been always dominated by NRI’s, Businessman and many other investors building a cyclic process of completion. The real estate market has been unstable that has made buyers full of suspense. These up and down of market always put the investors in dilemma.

Heed down to know some of the cities in which price is varying from 2014- 2016 and present condition of market in 2016.

In Delhi and NCR: in the first half of 2015 market dropped by 60% and sales dropped by 50% in Delhi and in NCR the prices rose by 21.9% and the rental yields are 2.1% i.e. very poor. Around 48,800 units have been sold in 2015 with far improvement from 2014 has been seen in NCR the best option to invest with all facilitators around.

In Mumbai: prices weakened by 10.8%, and Mumbai has witnessed demand in housing units between 3 to 20Cr, totally it has 1.9Lacs unsold units.

In Ahmadabad: prices goes down to 7.4%, still since 2015 42,000 flats are unsold. Lowest sales price has been recorded in 2014.

 In Bangalore: Bangalore showed signs of improvement in 2014 and the prices rose by 10%. It is with much higher yields with 3.68% in 2015.

Take a wise and wide decision in the coming years to get the best in return after investing your lifetime achievement. 

The 2016 real estate has seen high and low tides, in Jan the IMF cuts by 0.2% and the leasing volumes has increased by 5% in 2016. Across major locations, the investment volumes and capital values are expected to rise by 5%. It seems that the growing rental rates mean more people are looking forward to invest in last left few months of 2016. The first quarter of 2016 has seen a sale of 42, 521 units, 4% increase from quarter fourth of 2015, as it was 39, 001 units sale. Surely, 2017 will see a boon with a major turn up because of Demonetization.


real estate 2017


CONCLUSION: Number of initiatives has been taken to up grow the Future of Real Estate Investment and Indian economy. A big thank to P.M Narendra Modi to get the big brilliant step in World’s largest democracy India where many other attempts have been made to diversify its impact on each and every section and these attempts have gain momentum and surely the growth in real estate sector will help the other sectors to grow.

About the Author - Admin
Admin
Baldev Singh writes the content on real-estate from several years and he is one of the few writers who provide the thought-provoking content on best properties deals.
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