The real estate market in India could begin to improve in 2018; here's why

The real estate market in India could begin to improve in 2018; here's why

The surprise demonetization of the government in 2016 was a real shock, putting more or less end to the unaccounted funds found in the segments of secondary sales and even primary and in the segment of luxury housing.

Last year was rich in events for the Indian economy, and more specifically for the residential real estate sector. There have been reforms galore that have literally changed the DNA of Indian real estate, focusing on eliminating black money and improving market transparency to make the residential real estate space better for consumers and investors.

The surprise demonetization of the government in 2016 was a real shock, putting more or less end to the unaccounted funds found in the segments of secondary sales and even primary and in the segment of luxury housing. The Real Estate (Regulation and Development) Act came into force in 2017 with the aim of improving financial discipline, improving market transparency and giving consumers a stronger voice and legal choices to deal with. promoters and brokers. The Benami Property Law has been amended to make it more effective in reducing transactions and anonymous real estate. The year 2017 saw the launch of new housing projects impacted by the demonetization, the RERA and the GST. The top 7 cities saw only 94,000 units added in Q1-Q3 2017, a reduction of more than 50% compared to the same period in 2016. The last quarter of the year was more positive with the 18 000 first homes launched.  

Price trends vary.

Throughout 2017, Indian residential real estate strongly favored buyers and massive unsold stocks were used to control housing prices. The evaluation of average prices for the last 5 years (Q3 2012 to Q3 2017) reveals that Pune, Kolkata, Hyderabad and Bengaluru have been the leaders in the appreciation of the value of capital, countering trends in large cities like metropolitan area of ​​Mumbai. and the National Capital Region (NCR).

Inventory decreases, but not significantly.

The size of the unit also falls

Changing customer needs and high real estate prices in major cities mean that developers are now starting to produce compact homes. In the top seven cities of India, the average size of units launched in 2017 has significantly decreased compared to the previous year. 

Affordable housing will remain the largest segment of Indian real estate in 2018, and we will see a lot of consolidation among developers and brokers as RERA becomes a stronger market force. 2018 is unlikely to lead to a dramatic recovery in the residential market, but the recovery and growth we will experience will be supported by greatly improved market fundamentals.