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28 February, 2019
2019 is here, and the real estate industry looks in a better health, as compared to the last couple of years. Here, you will come to know about some of the trends that are making themselves evident in the industry. Increased accountability and transparency in the industry during the last few months have motivated a lot of investors to buy properties in India. Besides, the REITs are likely to shape the industry in a positive way.
Have a look at the trends that are likely to dominate the real estate industry in 2019.
Sustained demand of office spaces: The firm GDP increment will be fueling further expansion, attracting investments. Last year, the gross absorption of office space has been greater than 20%, as compared to the previous year. The reason behind this is the renewed interest from the tenants of banks and more expansion of technology-oriented firms.
Increase in co-working culture: In India, the entrepreneurial ecosystem is expanding and it has cast a multiplier impact on various segments. This includes the commercial office space, among others. The last five years have witnessed the concept of co-working space growing to more than 200 players.
Aligning demand and supply: The demand and supply of residential properties in the urban areas are likely to be aligned. Due to the impact of urbanization, the number of nuclear families is on the rise. This is increasing the demand for housing, and the unsold inventories are getting occupied. However, the price mismatch is evident in the industry and selling the homes has been an issue. The developers are striving to get the size of residential units aligned, so that it can suit the end users’ budget. Besides, home buyers need to be more informed and the focus of the government on affordable housing may result in an enhanced traction in the segment of affordable housing.
Consolidation: Small real estate companies are approaching the larger ones, so that they can save themselves from the financial crisis and complete the projects. As a result, joint ventures and joint developments are taking place. The small and large developers are entering into development managerial agreements. In recent past, the organized developers have shown fast pace of growth, and this is likely to continue in 2019. The consolidation may also extend to the co-working operators from the developers.
Warehousing:The residential market is still unstable and the supply of good quality office space is short. The key players are being attracted to logistics. The states have been unified into a single market due to the implementation of GST. The structural shift in the logistics sector is evident, and small fragmented groups are being consolidated into centralized ones.
However, the NBFC financial crunch is something that might concern the investors and will have a considerable impact on the industry.