According to a recent India Brand Equity Foundation (IBEF) analysis, the real estate sector in India is anticipated to rise to a market size of $1 trillion by 2030 and contribute 13 percent to the country's GDP by 2025, up from 6 to 7 percent. Not only will the repressed demand drive prosperity, but the country is also seeing a structural shift in housing demand. This is due to a combination of first-time homeowners and consumers rising the property ladder to move to bigger houses or purchase a second home in another region.
Durga Shanker Mishra, the Secretary of the Union Housing and Urban Affairs Ministry, has stated that the National Urban Digital Mission has made initiatives to link almost 2,535 cities throughout India to boost connectivity. The real estate sector now contributes 7% to GDP and is predicted to increase to 10% by 2025. The industry in India is estimated to be worth USD 1 trillion in the next few years as the country strives for a USD 5 trillion economy.
Bangalore- More than the ‘Silicon Valley of India’
One of the most significant developments in Indian real estate is the rise of well-developed localities in Bangalore. Modern-age infrastructural development and transportation & metro connectivity have sparked the curiosity of prospective property buyers in such areas (Yelahanka, Whitefield, IVC Road, Hosa Road, Indiranagar, Kengeri, etc.). Besides offering newer and better townships, they also grant a fantastic investment opportunity owing to their high appreciation and rental return. As many of these localities are home to companies, most of the workforce prefers to live nearby, increasing residential plus micro-market demand.
In summary, the Bangalore real estate market trends demonstrate that investing in houses in popular areas, residences that enable co-living, offer senior care, and are fitted with cutting-edge technology is well worth the money. As Bangalore develops into one of the country's most prominent residential centers, the value of these assets will only rise in the near future.
A deeper dive into the complexities of real estate investments
Organizations are also investing in building their digital capability to ensure a smooth remote working experience. Moreover, companies are rethinking their office locations and evaluating the feasibility of establishing a network of offices spread across different locations. With rapid infrastructure improvements, many cities have established new decentralized business hubs, and these will attract occupiers seeking quality spaces at lower costs.
However, this demand was aided by lower house loan interest rates, which are the lowest in the past two decades. The notion of working from home also supported this, and households are now yearning for an upgrade as personal space becomes more important. Buyers are no longer unwilling to pay a premium for houses built by some of the industry's best brands because they do not want to compromise quality or delivery time. Interconnected advancements are currently seen as vital for comprehensive and sustainable living.
There was an era when cheap credit rushed into the real estate market, resulting in subpar constructions. Because the products were not sold, stockpiles accumulated and resulted in an oversupply issue. Following the NBFC crisis in 2018, the situation improved as the supply of cheap money was curtailed. After commercial banks stopped lending to NBFCs, they began to face a liquidity crisis. Because of the quality and assurance of timely delivery, the NBFC crisis reduced the supply of houses, developer consolidation, and a significant shift in consumer preferences toward residences from A-grade developers. Based on sales momentum in the second half of fiscal 2021, researchers estimate that the real estate industry will produce a dynamic in the current fiscal year. Prices will likely climb in some locations, as demand for first-time home buyers and those looking to upgrade or locate a second home picks up.