Overview of Real Estate in India

Date: 18-April,2019Last Updated: 26-September,2022
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Out of all the assets that investors invest in, Real Estate has been the most lucrative and relied upon sector amongst all. Attracting heavy investments in both Commercial and Residential Real Estate, the markets have witnessed immense growth in this sector.

Globally, Real Estate Investments have always been considered as the safest bet to invest on in terms of long term security and gains. Time is a testament to the fact that there have been numerous successful people who have advised others to invest in it.

Asserting again on the fact that Real Estate in India and investments go hand in hand, it is left to be seen as to how this sector fares over other sectors like mutual funds, fixed deposits, insurance, stocks, gold, etc.

Its always been a preference for investors who are looking at high returns on investment (ROI’s) on a long term basis, placing itself in the very centre of the investment ecosphere making it a very lucrative option.

This blogs objective is to convey the intrinsic strengths of this sector and educate people on how to invest wisely and responsibly in this sector.

The biggest factor that favours Indian Real Estate is the recent economic reforms that have stormed the residential housing market.

The all new GST rates, the RERA act, the Benami Act have ushered in an era of transparency and operations are taking a turn for the better with things being made more organised.

Indian Real Estate has witnessed major growth since the past couple of years and presently it couldn’t have been better.

In the 23rd GST Council Meeting new rates were set and these newly implemented reforms come as a result of the Government’s ‘Housing for All by 2022’ initiative which is a win-win situation for homebuyers.

To begin with, the real estate sector is extremely dependent on the domestic economy. Consumer spending nature is a key factor here.

When an investor is looking at various options in their investment portfolio, real estate looks lucrative thanks to the other assets being extremely volatile.

In times of economic instability excluding real estate, the majority of the assets can experience extreme volatility with chances of complete losses rising from any global crisis. In the times that we’re living today situations like a spike in crude oil prices, a trade war between developed countries or defaults by global banks can happen any moment. Despite this real estate has always been immune from such economic and global factors.

Another interesting fact is that assets in Housing Market are tangible with the ability to return investment in terms of rental income and collateral support in other ventures. So the scope of return on investment is extremely high.

Well let's not forget with RERA making it compulsory for property developers to deliver projects within the stipulated time, a certain discipline shall be inculcated into the market. The confidence of homebuyers has been boosted. This also means that investments in the real state scenario are safe now from delay in possession.

Homes247.in Experts View

Indian Real Estate’s growth will generate huge Returns on Investment and be the talking point of the next decade.

The demand for housing in India shall only increase in coming times.

Housing being a basic necessity and India being the second most populated democracy in the world, the demand for housing shall keep the market going in a way that existing unoccupied units and new projects are developed efficiently and business flourishes.

Its been a tradition to invest in real estate and become rich for a reason. Real estate has always been known to reap great returns and benefits.

Hence we at Homes247.in encourage our homebuyers to Invest in Real Estate and experience the massive ROI that can change your financial prospects for the better.

According to Parth Mehta, managing director of Paradigm Realty, other asset classes like gold, commodities, currency and equity markets, are highly correlated to global economic factors, while real estate is largely insulated from overseas factors.

“Real estate is highly dependent on consumer spending in the domestic economy. Other investments are very volatile and can erode one’s portfolio in no time, in case of any global crisis, such as a spike in crude oil prices, or a trade war between developed countries, or defaults by global banks. Moreover, the housing market offers a tangible asset, with the potential to earn rental income or avail of a loan against property in times of need,” Mehta explains.

Aditya Kedia, managing director of Transcon Developers, maintains that the present real estate market offers a win-win situation, for potential buyers and developers alike. “With RERA in place, developers are bound to deliver projects within the stipulated period of time,” he says.

Manju Yagnik, the vice-chairperson of the Nahar Group, adds that “The sector has witnessed growth in recent times, with a rise in the demand for commercial, as well as residential spaces. Private equity investment in real estate is estimated to grow in the coming years.”

“It is true that investing in real estate requires liquidation of more than 50 per cent of one’s life savings,” says Dhaval Shah, joint managing director of Parinee Group. However, from the perspective of a long-term investment, the return on investment (ROI) will be more than the amount invested, because of improvements in infrastructure, he says. “The demand for housing in India will never diminish and hence, it will be a profitable investment,” he elaborates. Moreover, with realty prices across India remaining more or less stagnant and developers focusing on clearing their existing inventory, this may be a good time to make an investment, say experts.

Girish Shah, executive director, marketing and corporate communications, Knight Frank India, advises that for sizeable returns, any investment in real estate has to be followed by a reasonable holding period. “In regular market conditions, this holding period can range between five and seven years,” says Girish Shah.

Investors are also looking to diversify their portfolios, into asset classes that not only provide long-term appreciation but also regular returns. Real estate is one of the few assets, which promises both, asserts Ashish R Puravankara, managing director of Puravankara Ltd. “If there is one asset class that has appreciated consistently over the years, it is real estate. It gives the best appreciation in the long run, especially when a buyer purchases a property from a trusted and reputed developer,” he adds.

Apart from precious metals, a real estate investment provides the investor with the comfort of owning a physical asset. As the adage ‘roti, kapda aur makaan’ goes, a home is always seen as a basic necessity, adds Rahul Shah, CEO, Sumer Group.

“This sector is widely chosen, because of its high tangible asset value, frequent generation of income and tax benefits. It is also one of the most secure income generating assets that consumers invest in, for the security of their future generations,” says Rahul Shah.

The main drawback of a real estate investment is that the asset cannot be easily liquidated at short notice. Other asset classes like stock markets, mutual funds, etc., can also give high returns to investors. Investing in real estate is also an expensive proposition, especially in metropolitan cities. Nevertheless, a real estate investment can be used as collateral, to raise more capital. When it comes to investing in realty, Pritam Chivukula, co-founder and director of Tridhaatu Realty & Infra Pvt Ltd advises buyers to choose areas that have the potential for development in the near future. “This will enable home buyers to find properties that fit into one’s budget and still offer the same social and support infrastructure, as well as connectivity, in the near future,” Chivukula concludes.

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