Over the past decade, the Indian real estate industry has experienced tremendous growth. Several factors, such as favorable governmental policies, attractive schemes and growing confidence of customers and investors – along with the increasing purchasing power of customers – are driving this growth. It is essential to understand real estate’s latest trends to invest successfully. In this post, we’ll be examining 5 of these trends and their impacts.
- Rise in Foreign Direct Investment
Due to recent policy decisions and strengthening of the economy, India is emerging as an attractive investment destination. Structural reforms, increased transparency, and liberalized foreign direct investment regime are attracting foreign investors. Changes in regulatory framework and transparency, along with launch of REITs (Real Estate Investment Trusts), have got global firms lining up to invest in India.
- Revamping of Business Models by Developers.
With the implementation of the Real Estate Regular and Development Act (RERA) across the nation, developers are revamping their business model. RERA promises to increase transparency and to hold developers accountable, which increases consumer confidence. People will be eager to invest in India properties. REITs will also have a long-term impact on developers. Due to the increased institutional funds available, it will force them to either corporatize or avoid the risk to get taken over by bigger developers.
- Co-working Spaces
With many metropolises dealing with a confluence emerging businesses and lack of infrastructure, co-working spaces are emerging in Indian cities. These provide a business with flexible working options at a good price. Co-working spaces increase cost-efficiency, which helps in employee motivation and retention. The flexibility and environment boosts their productivity.
These spaces also allow the companies to keep their client servicing team near their client sites without being locked into a cumbersome lease. It will lead to corporates and co-working operators creating a ‘hybrid’ ecosystem, where they rely on each other.
If you are a developer in India metro such as Bangalore, then you should consider offering co-working spaces. If you decide to invest in Bangalore, you can reap benefits of this emerging trend by developing a customized solution for co-working spaces.
- Rise of New Players
Many new companies are emerging in the market, using technology and innovation to disrupt the staid business models of the industry’s titans. A number of these companies are online marketplaces, linking up supply and demand via the power of the Internet.
An excellent example of one such company is Smartowner. SmartOwner is India’s largest marketplace for real estate opportunities that aren’t on the general market, and it offers investors exciting and profitable investment opportunities. Smartowner pre-vets the project for location, market price, and trends, and curates each deal to ensure maximum profits and minimum risks.
In short, businesses like SmartOwner are democratizing the industry, giving the savvy investor access to deals that would have been only available to the big players a decade ago.
- Industry Consolidation
Consolidation is becoming an obvious choice for many less reputable developers, as slowing sales, lack of financial prudence, and new regulations have meant their old business models are no longer feasible. Joint developments and joint ventures between landowners and small developers will emerge.
Small developers are being bought out by larger players. Accordingly, they will look to sell their land banks to players with better balance sheets. Consolidation will become a regular affair in this industry. Big players will strengthen in coming years, and smaller players will lose their foothold.