Indian real estate housing industry: a glimpse into current trends and prospects beyond 2022!
The Indian housing real estate report has been published for Quarter 3, 2021, and the excerpts below give us a summarized perspective of the housing segment. These indicators and perspectives give us a positive glimpse into the future of Hyderabad housing real estate sector.
Growth of the housing sector is complemented by corporate environment which in turn positively impacts the demand for office-spaces as well as residential units!
Construction industry ranks third in terms of direct, indirect and induced effects to the Indian economy. In India, the real estate sector is the second-highest employment giver, second only to agriculture. No wonder, even the NRIs are projected to favour and invest in Indian cities like Bengaluru, Hyderabad, Ahmedabad, Pune, Chennai, Goa, Delhi and Dehradun.
Market Size of the Indian housing real estate industry
- Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030
- It will contribute 13% to India’s GDP by 2025
- As ICRA estimates, more than Rs. 3.5 trillion (US$ 48 billion) will be raised through infrastructure and real estate investment trusts in 2022 alone
- As of now, Information Technology (IT/ITeS) occupied 41% share of office spaces in 2020, followed by BSFI and Manufacturing sectors with 16% each
- Housing launches were approximately 90,000 units across the top eight Indian cities in Q3 & Q4 2020
- Residential home sales across eight major cities in India jumped by over TWO TIMES to over 60,000 units in Q4 of 2020 compared with 33,403 units in Q3 of 2020
- Signifying healthy recovery has happened post the strict lockdown imposed in the second quarter due to the spread of COVID-19
- According to the Economic Times Housing Finance Summit, 3 houses are built per 1,000 people per year compared with the required construction rate of five houses per 1,000 population
- Current shortage of housing in cities is approximately 1 crore units in India
- 2.5 crore affordable homes are needed by 2030 for the country’s urban population
Current trends & future prospects: pan-India indicators
- There has been a rise in demand for office as well as residences in 2021, and this will continue beyond 2022
- According to Colliers India, Indian housing real estate sector will increase by 4% to reach Rs. 36,500 crore (US$ 5 billion) in 2021
- Investors will continue to capture attractive valuations due to the pandemic and post-pandemic optimism
- Private equity investments in Indian real estate crossed US$ 3 billion Q1 & Q2 2021, which is twice that of the same period in 2020
- In the top seven cities, housing sales has increased by 29%, and new launches will go up by 51% in the Q1 of 2022
- In May 2021, Blackstone Real Estate acquired Embassy Industrial Parks for Rs. 5,250 crore (US$ 716.49 million)
- According to Anarock, housing sales in seven Indian cities increased by 29% and new launches by 51% in Q4 FY21 over Q4 FY20
- Demand for housing real estate revived in Q2 2021 with homebuyers taking advantage of low mortgage rates and offers/incentives by developers
- Residential sales in this quarter recovered to >90% volumes across the top seven cities in India
- In 2021, working remotely was adopted by Indians with dexterity, and work-from-home designs are now being incorporated. In future, work-from-home will be a norm rather than an exception
- Demand for affordable houses below Rs. 40-50 lakh is expected to rise in Tier 2 and 3 cities. This will mean an increase in property prices in these smaller Indian cities
- In April 2021, HDFC Capital Advisors (HDFC Capital) joined hands with Cerberus Capital Management (Cerberus) to create a platform focussing on high-yield opportunities in the residential homes in India. This platform seeks to purchase inventory, and provide last-mile funding for under construction residential projects across India
- The residential sector will grow with the central government aiming to build over 2 crore affordable houses in urban areas by 2022, under Pradhan Mantri Awas Yojana (PMAY)
- This will in turn increase the demand for commercial and retail office space
- Flow of FDI in Indian real estate is encouraging with increased transparency
- Indian real estate is expected to attract a FDI over US$ 8 billion by 2022
These are just a few POSITIVE indicators that point to a promising future of the Indian housing real estate industry. The prospects of Hyderabad are poised to be equally bright considering these facts and figures!
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