Experts have forecasted that the real estate sector in India will witness rapid growth over the next couple of years on account of the regulatory reforms which have been implemented such as RERA and GST and also the increased transparency and accountability in the sector in tandem with growing urbanization, demand for nuclear and affordable housing and growing household incomes.
The realty sector in the country could touch as much as $180 billion in value by the year 2020 as an industry. This would be a new high from the approximately $126 billion market size seen in the year 2015. Investments to the tune of approximately Rs. 590 billion have come into the real estate sector from the year 2014 onwards as per reports. The residential sector will be contributing almost 11% to the country’s GDP by the year 2020 as per predictions.
There are also forecasts of a doubling of the contribution of the Indian housing sector and this could be approximately 11% as compared to the 5-6% that was estimated previously. Sales volumes are also expected to go up with RERA improving buyer sentiments and trust amongst buyers and investors in the market. GST may also lead to cost savings between 3-4% which may also propel growth in the realty sector. Prices will depend majorly on the equation between supply and demand across several micro markets. Along with the major 8 cities in the country, other cities like Kochi, Nagpur, Patna and Chandigarh should also witness major growth. FDI relaxation has also ensured a major impetus for investments in this sector. According to reports, debt based and private equity investments have gone up by 12% on a year-on-year basis seen across 79 deals last year. There will be huge investments garnered by the warehousing and affordable housing categories. The affordable housing category has already received infrastructure status and this will give further impetus to real estate developers. Economic growth in India will be driven majorly by RERA and GST.
