Real Estate Trends to Watch Out For in 2016
Date: Thursday , March 03, 2016
Headquartered in Bengaluru, Zenify.in is a real estate platform that leverages technology and analytics to provide a hassle free rental experience to owners and tenants.
We have finally stepped into the New Year leaving behind an eventful 2015 in the Indian real estate sector. The industry witnessed regulatory changes that included relaxing of foreign direct investment laws and the Union Cabinet approving the much-awaited Real Estate Bill. Expecting to begin the year 2016 on a positive note, the sluggish sector may witness a pick-up in sales with an improvement in the number of unsold inventories. Here\'s a look at some of the top anticipated real estate trends:
1.This year, we are expecting a high demand for ready-to-move in projects. This will bring an increased focus on project completion resulting in setting an outline for the realty sector. Prospective home buyers who wish to buy a house for themselves, will look at property that is ready for possession within one year.
2.The year 2016 will witness NRIs showing tremendous interest in Indian property. The demand will rise following the property rates going down by 20 percent even in top metropolitan cities like Mumbai and Delhi, according to a recent estimate. Investment in Indian real estate is sure to give them returns that are much higher than what was anticipated a few years ago.
3.Noticing an increase in the Indian government and Reserve Bank of India\'s support for reforms in the country\'s real estate sector, the good days are here to stay. Lowering of basis points, the ease in FDI policy, probable introduction of the Real Estate Bill, and the introduction of smart cities are just some of the influential factors that will improve the scenario of the real estate sector. Even though buyers are being influenced with all kinds of freebies to make investments, they must scrutinize every aspect before making any investments. Cross check and keep a tab on the builders, properties and locations. Before putting your hard earned money at stake, ensure that you check all the necessary legal papers.
4.This year, the sector is expecting more mature investors coming in and buying built-up retail spaces. Once they have the relevant experience and foothold in India, they will start investing in \'greenfield\' assets. Green-field investments occur when a parent company begins a new venture by constructing new facilities in a country outside of where the company is headquartered. However, 2016 will see an unrelenting dearth of quality retail spaces. Retailers will have to revisit their real estate strategy and have a flexible approach, customised to different micro-markets.
5.The year 2015 did not bring the expected growth in residential real estate. But there was a silver lining that resulted in sales picking up in a few cities like Mumbai, Hyderabad and Bangalore. However, reduced launches in cities like Mumbai slightly lowered the inventory. With attractive schemes and deals by developers coupled with lowered interest rates by the RBI, we are foreseeing an end to the long and painful journey in the country\'s residential realty space and estimate an upward growth trail.
6.India\'s office space absorption during 2015 was 35 million sq ft, which was the second-highest figure in the country\'s history after 2011. While 2016 will bring in continued demand for leased spaces, quality supply is expected to bear the brunt. This means that the unmet demand will force the buyers to look for an alternative in Grade-B office spaces, resulting in higher occupancy.
India\'s requirements for real estate facilities are underserved. There is an obstruction between demand and supply of housing, primarily due to the irregularity in information. However, increased market transparency and immense opportunities lie in the offing for the developers and investors. The Indian real estate industry, which was unregulated, fragmented and highly inefficient a few years back, is finally maturing. Although 2016 will witness regulations in this space, the market will remain a bit uneven and moderately unproductive. A favourable reflection is expected in line with the growth of the Indian economy.