Is 2020 the year of Indian Real Estate?

Indian Real Estate in 2020

The Indian housing market is all set to enter a new year where it is expected to see better times. Although it is difficult to ascertain if the Indian real estate sector is normal in 2020, some notions can be made about how the market will behave. When it comes to consumer rights, as market regulators, the real estate authorities are making impactful positive changes.

In the states like Haryana and Maharashtra, the change is already seen by buyers since the state RERAs (Real Estate Regulatory Authority) is pressurizing the builders to be clean with the dealings. Justice is also being served much swifter than the regular judicial system. Since the authorities in other states are developing on this, it can become a country-wide phenomenon.

When talking about rental houses, it has been ascertained that since more and more people defer the plans to buy a home in their present situation, the rental housing segments in the country is doing better when it comes to business. This also includes the co-living segments. The rental housing can be more organized if the states tend to act upon the model law and also come up with rules and regulations with this regard.

The Union Budget of 2020-21 was presented by Finance Minister Nirmala Sitharaman, where below are some of the excerpts of the budget when it comes to the real estate sector

  1. There are deductions availed on housing loans for affordable housing which were sanctioned before 31st March 2020. To make sure more people benefit from this incentive, the date of the loan sanctioned has been extended by 1 year where a tax holiday has also been provided on the gains earned by developers on the affordable housing project which were approved by 31st March 2020. This has been done to boost the availability of affordable houses in the country.
  2. In the real estate transactions, when taxing income from business profiles, capital gains, and other sources, if the consideration value is said to be less than the circle rate, which is more than 5{67ce74ea29cb3842281e10a17b6bc9b0a76f5186003460eea2ff96ae3842e2c1}, then the difference is counted as income, which is for both purchaser and seller. To reduce this hurdle in the real estate transaction and to also provide relief to the sector, it has been ascertained that the limit is to be increased from 5{67ce74ea29cb3842281e10a17b6bc9b0a76f5186003460eea2ff96ae3842e2c1} to 10{67ce74ea29cb3842281e10a17b6bc9b0a76f5186003460eea2ff96ae3842e2c1}
  3. In the next 5 years, Rs 100 Lac crore will be invested in the infrastructure among different sectors like energy, housing, basic amenities, educational institutes, healthcare, logistics, transportation, irrigation projects, warehousing and much more.

When it comes to real estate investing, there is a different strategic approach required when compared to purchasing a property for personal use. When a real estate is chosen for investment strategy, profit is expected out of it. In many of the cases, the investor resells or rents out the property, which is for a higher cost.

Just as similar to other investments, one needs to be aware of all the ins and outs of the market and its trends and smart choices should be made to receive higher returns.

If you are aspiring to invest in real estate, let’s have a look at Indian real estate 2020 for investors.

  • A huge gap between renting and owning

Because of the surge in home prices in recent years, houses have become beyond reach for many people. But this is good news for the investors targeting the rental property but it also implies that it is not easy to buy a home and then rent it out since there are a small number of people who can afford a higher rent price. A smart strategy in this is that it is better to split the home into many rental units even if that requires your time and money. Apartments are also a smart move since rents will rise constantly even if the home prices do not.

  • Slow home prices

By 2025, India is said to be a part of nations that will account for 72{67ce74ea29cb3842281e10a17b6bc9b0a76f5186003460eea2ff96ae3842e2c1} of the expected construction activity. This implies that there will be better infrastructure and improvement in connectivity and eventually, a better standard of living. This also means a bridge in the gap between the metro cities and the small towns. The Global Construction research ascertains that by 2025, India will complete 11 crore annual average houses on an average. Real estate is all charged up to be developed at a massive global scale where the prices will tend to go through high and lows. Investors can invest during the slow home prices which will be based on personal preference and budget.

  • Low risk in smaller markets

Investors want to stay away from the credit risk which is met at the lower end of the investment price range where the physical location is said to be even more important. One cannot count on the rising prices to flesh out the expected return and for it to be done, there should be a hard bargain where there will also not be much competition. It has been ascertained that the fastest-growing cities will drive in a higher risking reward, which is in the emerging economies.

It is a big nod when asked if real estate is worth investing in India in 2020 and 2021. Because of the various positive real estate trends, experts are optimistic about the Indian real estate where there are much brighter days ahead.

In the Indian real estate market, 2020 is a great year for not only residential real estate business but also commercial real estate business. Many co-ed office spaces are gaining attraction in most of the cities since most of the IT is contributing to the hefty demand.

The millennials are more inclined towards co-living spaces which is more dynamic and new when compared to the common rented spaces. The concept of co-living is being widely accepted in India where it is acting as a catalyst for the organized rental market in the cities.  It has been ascertained by experts that if the government takes a bold and quick measure, the urban infrastructure and housing sector can be boosted at unmatched levels.

To get a brief to learn how residential property owners can tap into the co-living segment. Read More

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