Indian Real Estate Q1 FY20 - Investment Opportunities on the Rise

By : Silky Malhotra

03 August, 2019

In sync with the continuously evolving economic climate, the real estate market in India is undergoing a consistent upturn. To highlight the factors that are playing a dominant role in the prevalent optimism across the country, 360 Realtors, India’s largest institutional channel partner, has come out with its Quarterly Report for Q1 FY 20. This exhaustive research consists of in-depth analysis of key criteria such as transaction growth, price trends, supply-demand pattern, infrastructure development & much more in the major cities in India that are contributing to the rising demand. Through this research, investors and end-users planning to invest in property can get valuable and relevant insights enabling them to take the most viable decisions regarding the best opportunities.

It is apparent that the current transaction volume in major markets across India is mostly end user-driven as many potential investors are still wary about venturing into Real Estate. However, in certain pockets, concentrations of investors are gradually rising. Ground analysis by the 360 Realtors research team has shown that despite this guarded approach, currently a few markets such as Pune are still showing healthy investor participation, standing at near around 20% of the total transactions. This indicates that Real Estate still harbours tremendous potential as an investment tool. Interestingly, prices are still low in major markets & it will take some time to move beyond the high figures achieved earlier. Therefore, looking at this upturn, it can be said that this is an opportune time to make an investment.

The Real Estate segment in India is also propelling forward due to sustained intervention by the present government which can be credited for introducing some noteworthy changes in the industry in the form of RERA, GST & REIT, etc. In the recent Budget as well, the government has re-emphasized its commitment towards infrastructure, affordable homes & liquidity in the market which is going to strengthen the fundamentals of the industry in the longer run. The government has announced that it will pour in over 100 lakh crore into Indian infrastructure to develop roadways, ring roads, railway networks, metro railways, etc. An immense push of this nature will also encourage more housing demand in the times ahead. It will also go a long way towards bridging the urban-rural divide, encourage new urban corridors & spur further urbanization.

IT hubs such as Pune, Bengaluru and Hyderabad are exhibiting a strong performance with transactions moving upward consistently on a Q-O-Q basis. In Pune and Bengaluru, the unit absorption has increased by 40% and 9%, respectively. Hyderabad is also presenting a promising picture with demand rising Bon In Delhi-NCR and the MMR region, a high concentration of inventory still floating in the market has made it a priority for developers to turn around the existing projects contributing to a slowdown in these regions.  In terms of investor-end user segmentation, Hyderabad and Pune are gradually drawing investors while the market in Delhi-NCR and MMR are dominantly end user driven since investment options are scarce. To get a detailed picture of average price movements and absorption and consumer behavior trends, click here to go through our full report.