Residential properties in India continue to attract more traction and are still affordable and investment-friendly.
In what can be considered a big relief to buyers and investors, the prices of residential properties are not going to see an upsurge. They are still affordable and investor as well as investment-friendly.
With a high scope of investment, residential properties are affordable across Indian cities except Mumbai and Delhi, says a report titled ‘Residential Real Estate: An Investible Asset’ published by KPMG and Magicbricks. The report comes at a time when prices in the housing segment have become more than twice of what it was 10 years ago. With growth of only 4 per cent being registered since the past three years, the prices have remained subdued.
The reasons for muted growth vary from less demand to untoward delays in completing projects that hamper the overall viability of a project in the long run. But according to the report, the market is on the revival path. Though it will take a time of a few quarters, the segment is set to only witness growth.
The report indicated that construction and real estate would become the third-largest sector on a global level by the year 2030 with 15 per cent share in GDP, a double of what it is at present. The report further suggested that although the growth has been low and has even fallen to 50 per cent with proportionate decline in incomes, the desire to own one’s home as well as the affordable prices of homes in India in comparison to other countries has definitely made Indian real estate market, one of the preferred choices. What makes residential property tick with buyers and investors are factors like rate of savings, GDP, mortgage growth, urbanisation, affordability and growth of income. The report also backs quintessential reforms like Goods and Services Tax and RERA while highlighting the slow down observed in the industry after the note ban in November 2016. The clearing of black money in the deep pockets of the industry and rules and regulations safeguarding the on-time completion of projects along with structuring of tax liability in the economy has had an impact.
The report laid emphasis on the realty market’s sturdy returns on investment to home buyers and pointed out that it is anticipated that the market will continue to grow owing to interest subsidy on loans, interest rate cuts, easy filling of FDI forms and mortgage penetration at an increasing level. Experts also suggest that the demand of housing will only continue to growth and is said to touch 580 million by 2030. It is expected to grow by around 36 per cent owing to job opportunities, increase in GDP as well as growth in mortgage penetration. With affordable services, social and physical infrastructure picking up a fast pace if not already in place, opportunities of employment and hassle-free connectivity modes, India’s realty market is set to undergo appreciation in prices of land in the next 10 years.