Several new trends are now influencing the Indian real estate sector as per reports. There have been multiple reforms that have brought about a transformation in the sector over the years. Here are some of the new trends that are visible in the real estate market this year-
- Higher Transparency- The real estate sector is now seeing greater transparency and professionalism which has been injected into the whole system. With RERA, all realty processes are being inspected and developers have to focus on ensuring fair practices and a more professional approach towards development, delivery, pricing and other procedures. Accurate and open information is now a characteristic feature of the real estate industry and this has got a boost from foreign investments deployed throughout multiple big-ticket realty projects in the country.
- Project Funding- Most Indian banks and financial institutions were anxious about lending money for real estate projects and ventures on account of lack of transparency, delays and low profit margins over the recent past. However, the industry is now getting funding from pension funds and private equity funds. In fact, these two channels are the biggest sources of real estate funding and as per reports, between 2010 and 2016, the share of non-institutional funding channels in the industry increased to a whopping 75% from 25% previously.
- New models for business- There is a new model of consolidation amongst several real estate players by way of mergers, joint ventures and acquisitions. Joint ventures between land owners and real estate developers are here to stay as well. Many land owners and real estate firms which have high debt will continue selling their assets to larger market players.
- Foreign Investments- The Indian real estate industry is seeing a lot of capital flowing in from private equity funds and foreign investors. This helps developers who cannot always get funds through conventional banking channels. With major reforms in the sector like RERA and GST and high GDP growth, many foreign investors are looking to enter the real estate market in the country. In recent times, the sector is seeing multiple joint venture and investment offers from private equity owners and global investors.
- Environment-Friendliness- The real estate industry is also witnessing a major shift towards green buildings for environment friendliness and sustainability. As per reports, the mapped green building cover in the country stood at only 20, 000 sq. ft. quite some time earlier and this has now increased to a whopping 4.5 billion sq. ft. with more than 4, 500 green buildings registered under IGBC (Indian Green Building Council). In terms of global green building share, India currently has 10-12% of the same as per various studies. There are more than 600 projects which are LEED certified and the country and this is one trend that looks set to continue.
