• Research & Analysis Services I Academic I Market & Industry I Government Policy I
Navigating the Maze of Opportunity: India’s Real Estate in a Shift-Shaped World

Navigating the Maze of Opportunity: India’s Real Estate in a Shift-Shaped World

Shelter, a basic necessity of human beings, is still a bothering question for many Indians. This tunes us with the real estate sector in India. The real estate sector comprises four sub-sectors, housing, retail, hospitality, and commercial. 

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. India’s real estate sector is expected to expand to US$ 5.8 trillion by 2047, according to a recent NAREDCO-Knight Frank report, contributing 15.5% to the GDP from an existing share of 7.3%. The year 2024 is expected to mark the next phase in the evolution of real estate, driven by factors such as continued urbanisation, growth in the rental market, and steady appreciation in property prices.

According to the Economic Times Housing Finance Summit, about three houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the country’s urban population. 

Soaring prices of houses make it a dream-like situation for average Indians to purchase a home in metropolitan areas or tier-I & II cities. There is a large demand but the affordability component minimizes the potential of the real estate sector in the Indian economy.  To ensure the balance, efforts from the private sector and the government both are required. 

This article delves into the Indian Real estate sector and it’s analysis from market as well as policy perspective.

Why is there a need for balance?

It is said that a wise person learns from other people’s mistakes as well. 

In the grand ballet of global markets, India’s real estate holds a captivating position. After weathering the pandemic’s pirouette of disruption, it now faces a complex choreography of internal and external forces. But within this intricate maze lies a wealth of opportunity, waiting to be unlocked by understanding the rhythm of the market and dancing with its changing steps.

The echoes of distant falls like China’s Evergrande reverberate across the stage, casting a shadow of uncertainty. Yet, the melody of domestic resilience lingers, fueled by pent-up demand and government initiatives like the Pradhan Mantri Awas Yojana (PMAY). Affordable housing, the market’s steady waltz, keeps investors swaying to its measured beat, while the luxury segment awaits a graceful return to the spotlight.

However, the world beyond India’s borders also influences the dance. The rising interest rate tempo in the US threatens to tighten the market’s grip, while geopolitical tremors add unforeseen steps to the routine. Adaptability becomes paramount, with developers needing to quickstep in sync with global uncertainties.

Still  within this complex choreography, new dancers emerge. Tier-II and III cities are taking center stage wherein their vibrant growth attracts investors seeking fresh routines. Another highlighting factor of real estate industry is Sustainability, the green ambassador of the market, partners with technology to introduce innovative moves like smart buildings and energy-efficient designs. Niche segments like senior living and co-living spaces become the market’s daring contemporary ballets, catering to specific needs with agile grace.

For investors, the stage offers a symphony of options. REITs and fractional ownership present new melodies to hum along to, while due diligence remains the conductor, ensuring a harmonious flow of capital. PropTech, the market’s tech-savvy choreographer, introduces digital pirouettes that streamline transactions and enhance transparency.

Yet, the curtain can’t rise without the backdrop of regulation. Streamlined policies and transparent Real Estate Regulatory Authority (RERA) guidelines create a stable platform for the market to perform on. A plus factor is the market’s inclusivity that  ensures everyone has a role to play, from first-time buyers to seasoned developers.

Finally, the future promises a breathtaking grand finale. As India’s urbanization quickens, real estate will evolve into a dynamic spectacle. Technology will take center stage, with AI and virtual reality transforming the way we buy, build, and experience. Sustainability will become an integral part of the choreography, ensuring a green and responsible future for the sector.

While the main metros waltz under the bright lights, smaller cities are quietly rehearsing their own routines. The rise of “smart cities” like Indore and Pune, fuelled by infrastructure upgrades and IT hubs, attracts a new generation of homebuyers seeking affordable modern living. Tier-II and III cities offer developers a chance to compose fresh symphonies, catering to regional needs and aspirations. Imagine co-living spaces nestled amidst heritage sites in Jaipur, or eco-friendly resorts blending with the natural beauty of Himachal Pradesh. The potential for regional real estate is vast, waiting to be unleashed with the right planning and investment.

The PropTech Revolution: Transforming the Stage

Technology is no longer a silent accompanist in this grand production. PropTech takes center stage, transforming the way we navigate the real estate maze. Online platforms become the digital dancefloors, where buyers and sellers gracefully connect, while virtual tours offer immersive glimpses into future homes. Imagine AI-powered property management systems predicting maintenance needs and optimizing energy usage, or blockchain technology streamlining transactions and enhancing transparency. PropTech is poised to rewrite the script, making real estate more accessible, efficient, and data-driven than ever before.

Sustainable Harmony: Dancing with Nature’s Rhythm

As the world embraces green sensibilities, Indian real estate can’t afford to miss a beat. Sustainable practices are no longer optional extras; they become integral steps in the choreography. Imagine verdant rooftops teeming with life, buildings that breathe with natural ventilation, and communities powered by renewable energy. Developers who integrate sustainability into their designs will not only be applauded by environmentally conscious buyers but also attract long-term investment and government support. The future of Indian real estate demands a harmonious co-existence with nature, and those who master this duet will hold the key to success.

The Human Connection: Inclusivity on the Center Stage

Real estate isn’t just about concrete and steel; it’s about creating spaces where people thrive. Inclusivity is the essential melody that binds the entire performance together. Imagine barrier-free homes designed for differently-abled individuals, senior living communities that nurture a sense of belonging, and affordable housing schemes that empower low-income families. When real estate caters to the diverse needs of its audience, it creates a harmonious ensemble, where everyone has a stage to shine on.

From Grand Jete to Smooth Glide: Adaptability is Key

The future of Indian real estate is not a pre-scripted ballet; it’s a dynamic jazz improvisation. Uncertainty and change will be the constant companions, demanding agility and adaptability from all the dancers. Developers who can pivot their strategies to respond to economic shifts, changing consumer preferences, and emerging technologies will be the ones who lead the pack. The ability to read the market’s ever-evolving rhythm and adjust their steps accordingly is the key to staying ahead of the curve.

So, as the music continues to play, remember this: India’s real estate is a captivating performance, full of promise and potential. By understanding the diverse rhythms, embracing innovation, and prioritizing inclusivity, we can all contribute to a vibrant and sustainable future for this sector. Let’s keep our eyes on the prize, our feet light on the ground, and our hearts open to the magic that unfolds on this ever-evolving stage.

Hidden Gems: Niche Stages and Untapped Potential

Beyond the conventional waltzes of residential and commercial spaces, niche segments wait to sashay into the spotlight. Imagine co-working havens for digital nomads nestled amidst the bustle of Mumbai, or wellness retreats perched on the serene shores of Goa. Student housing clusters offering vibrant communities near top universities, or senior living villages designed for active aging in serene settings – these are just glimpses of the untapped potential in niche markets. Developers who dare to venture beyond the familiar and cater to specific needs will find loyal audiences and lucrative opportunities in these hidden niches.

The Rise of the Crowd: Democratizing the Show

The traditional top-down hierarchy of real estate is facing a pirouette of its own. Crowdfunding platforms, fractional ownership models, and the Real Estate Investment Trusts (REITs) democratize the market, allowing even small investors to participate in the grand spectacle. Imagine a world where individuals can invest in luxury apartments through fractional ownership, or pool their resources to fund sustainable community projects. This democratization opens doors for new players, fosters innovation, and injects fresh energy into the market. 

Property developers and consultants are of the opinion that the industry is witnessing the “best time” and it is possibly in the first or second year of long-term upcycle.

Sales were strong across price brackets, be it affordable, mid-income, premium and ultra-luxury homes, but what surprised everyone was the huge demand for properties starting from Rs 3-4 crore range to as high as Rs 100 crore.

The Sustainability Tango: Balancing Growth with Responsibility

The applause for green practices is growing louder. Energy-efficient buildings, renewable energy generation, and waste management systems are no longer optional flourishes; they’re essential steps in the sustainable tango. Imagine eco-friendly townships seamlessly integrated with natural landscapes, and communities powered by on-site solar energy. Developers who prioritize sustainability won’t just be applauded by environmentally conscious audiences; they’ll also attract long-term investment and government support. It’s a delicate balance, but one that is necessary for a harmonious future where real estate thrives in tandem with the environment.

Global Fusion: A Blend of Rhythms

The Indian real estate stage is no longer isolated. International collaborations, knowledge sharing, and cross-border investments create a global fusion of styles. Imagine Indian developers partnering with renowned architects from Singapore or incorporating innovative building technologies from Europe. This cross-pollination of ideas fosters innovation, raises standards, and opens doors to exciting new possibilities. As the world becomes more interconnected, Indian real estate must embrace this global fusion to stay ahead of the curve.

And so, the show continues, evolving with each beat of the changing times. New dancers take the stage, their routines a blend of tradition and innovation. The future of Indian real estate is a kaleidoscope of possibilities, waiting to be unveiled. By embracing change, prioritizing sustainability, and fostering inclusivity, we can all contribute to a vibrant and harmonious performance that promises to captivate the world for years to come.

Beyond Bricks and Mortar: The Rise of Experiential Living

Move over, square footage! The future of real estate isn’t just about walls and windows; it’s about crafting immersive experiences. Imagine co-living spaces that double as vibrant social hubs, complete with co-working areas, rooftop gardens, and curated events. Senior living communities morphing into wellness havens with on-site spas, fitness centers, and cultural activities. Picture luxury apartments boasting not just high-end finishes but personalized concierge services, in-house entertainment facilities, and curated art collections. The key? Understanding the evolving aspirations of consumers and weaving unique experiences into the fabric of every living space.

The Gamification of Investment: Democratizing the Market

Real estate, once considered a playground for the elite, is undergoing a playful revolution. Imagine virtual reality tours that let you explore future homes from the comfort of your couch, or gamified platforms where investors compete for lucrative deals. Think fractional ownership schemes democratizing access to prime properties, and blockchain-powered marketplaces offering micro-investments in diverse projects. This gamification not only injects excitement and engagement but also makes real estate more accessible and inclusive for a wider audience.

In July 2021, the Securities and Exchange Board of India lowered the minimum application value for Real Estate Investment Trusts from Rs. 50,000 (US$ 685.28) to Rs. 10,000-15,000 (US$ 137.06 – US$ 205.59) to make the market more accessible to small and retail investors.

The Data Symphony: Orchestrating Growth with Insights

Big data isn’t just a tech fad; it’s the conductor of the future’s real estate orchestra. Imagine AI algorithms analyzing vast datasets to predict market trends, identify buyer preferences, and optimize investment strategies with pinpoint accuracy. Picture location-based analytics revealing the ideal spots for new developments, and sentiment analysis gauge consumer expectations, ensuring every project resonates with its target audience. By embracing data as a powerful tool, developers can orchestrate growth, mitigate risks, and create projects that cater to the precise needs of the market.

The Infrastructure Interlude: Building the Stage for Success

No dazzling performance happens without a well-prepared stage. India’s real estate future hinges on robust infrastructure development. Imagine futuristic transportation networks seamlessly connecting cities, high-speed internet blanketing every corner, and renewable energy powering communities. Picture smart grids optimizing energy usage, and waste management systems ensuring sustainable living. Investment in infrastructure isn’t just about bricks and mortar; it’s about building the foundation for a thriving real estate ecosystem that caters to the needs of not just today but generations to come.

Collaboration: The Key to a Harmony Performance

Real estate isn’t a solo act; it’s a collaborative masterpiece. Imagine developers partnering with local communities, incorporating their needs and aspirations into new projects. Picture architects, engineers, and sustainability experts working in unison to create green and efficient buildings. Think government policies fostering innovation and creating a conducive environment for investment. This collaborative spirit, this symphony of diverse talents, is the key to unlocking the full potential of India’s real estate future.

The future of Indian real estate shimmers with promise, a vibrant tapestry woven with the threads of innovation, sustainability, and, crucially, the supportive fabric of government initiatives. Let’s explore how these vibrant strands intertwine to shape a dynamic and inclusive landscape for all.

Affordable Abodes: PMAY Paints a Brighter Canvas

At the heart of this tapestry lies the Pradhan Mantri Awas Yojana (PMAY), a bold brushstroke painting dreams of affordable housing into reality. Imagine millions across India finding secure havens in well-equipped apartments and urban homes, thanks to subsidies and tax breaks provided by this crucial scheme. PMAY acts as a catalyst for developers, encouraging them to cater to the needs of low- and middle-income families, ensuring a more equitable distribution of housing opportunities. 

Government measures not only affect the financial aspect of homebuying; they also reinforce the rules. Increased accountability and transparency could only come with the government’s backing of the Real Estate (Regulation and Development) Act (RERA) amendments. Such changes have helped protect the industry against fraud and delays, restoring faith in the real estate business that has steadily risen in the past two years.

Smart Cities Symphony: Infrastructure Plays the Lead Melody

The music of progress plays through the development of smart cities. Imagine gleaming metropolises teeming with seamless connectivity, powered by renewable energy, and boasting efficient transportation networks. Government initiatives like the Smart Cities Mission are the maestros of this transformation, creating futuristic habitats that attract investment, foster innovation, and empower residents with a higher quality of life.

Sustainability Takes Center Stage: From Policy to Practice

The curtain rises on a greener performance, where sustainability takes center stage. Imagine eco-friendly buildings crafted from recycled materials, nestled amidst verdant public spaces. Picture solar panels dotting rooftops, generating clean energy to power communities. Government policies like the Green Building Rating System (GRIHA) set the stage for this eco-conscious act, incentivizing developers to adopt sustainable practices and minimize their environmental footprint.

Inclusive Crescendo: Every Note Matters

No symphony is complete without its diverse instruments. The future of Indian real estate acknowledges this, with inclusivity playing a harmonious melody. Imagine barrier-free homes welcoming differently-abled individuals, and senior living communities providing dignified spaces for aging with grace. Government programs like the Accessible India Campaign provide the score for this inclusive performance, ensuring that everyone has a place to thrive in the real estate landscape.

Collaboration Conducts the Grand Finale

The future of Indian real estate isn’t a solo performance; it’s a grand collaboration. Imagine developers joining hands with communities, incorporating their needs and aspirations into new projects. Picture architects, engineers, and sustainability experts working in unison to create green and efficient buildings. Think government policies fostering innovation and creating a conducive environment for investment. This collaborative spirit, this chorus of diverse voices, is the key to unlocking the full potential of India’s real estate future.

Dhruv Kumar Singla

Dhruv Kumar Singla is Graduation Student at Gokhale Institute of Politics and Economics with a keen interest in Finance and Investment. He has been working upon research projects in the same area.

Leave a Reply

Your email address will not be published.