A spate of construction activity backed by the government’s push for affordable housing and infrastructure growth is indicating the revival of India’s real estate sector, industry experts have said. The strongest indication has come from the quantum of investment that the sector has received in the first six months of this calendar year.
As per a CII-JLL report called ‘India’s Real Estate Milestones – A 20 year narrative’, the January to June period of 2018 witnessed inflow of institutional investment of $3,616 million (₹24,011 crore) into the real estate sector, a majority of which was into the IT & Commercial sector. The IT & Commercial sector attracted close to $2,000 million (₹13,151 crore) while the retail space received $300 million (₹1,898 crore).
From 2013 to 2017 institutional investments in real estate increased at a CAGR of 63% to a cumulative of $ 20,971 million by end of 2017, as per this report which was unveiled at a real estate Conclave.
According to real estate developers and experts the sector is in the positive territory. “Housing for All by 2022 is a game-changer with a difference. While new infrastructure which is being created will enable growth of housing, the government’s new policies are supporting creation of housing stock for the end-user,” said Niranjan Hiranandani, MD, Hiranandani Communities.
Addressing the CII Realty and Infrastructure National Conclave in Mumbai, Mr. Hiranandani said RERA, the new regulatory regime, was effectively “short term pain for long term gain”. He said infrastructure growth would enable improved access to new, peripheral areas near existing cities where ‘Smart Cities’ would be created. For instance, he said the Mumbai Trans-Harbour Link would open up a huge chunk of land across the harbour, which could be an extension of South Mumbai. He said real estate is now heading towards affordable pricing.
Ramesh Nair, chairman of the Conclave and CEO and Country Head, JLL India, said, “From higher demand for commercial and residential real estate to FDI inflows into the sector, there has been an upswing in the business environment. Returning of buyer confidence and up trend in stable capital values will drive the positive trend.”
Mohit Malhotra, MD and CEO, Godrej Properties Ltd said the transparency that the new regulatory regime has brought in would play a major role in redefining the future of real estate.