The Indian real estate market is expected to witness a brighter and healthier 2019 since it is already in the throes of a steady recovery. Home sales have increased by around 30% and unsold inventory has been liquidated to a large extent. Affordable housing is expected to be the major growth driver for the real estate market in the country, particularly with added emphasis from the Central Government. As per the latest reports, housing sales volumes in the country have increased by almost 47%. Experts estimate that sales volumes should start rising considerably from the second half of 2019 although they will be a little slower for the first 6 months of the year.
However, sales volumes will improve in the second half of 2019 due to higher supply of new housing units and the proposal for lowering GST rates on under-construction properties to 8% from 12%. Average prices of property witnessed growth of 1-2% as per reports throughout the top 7 cities of Mumbai, Delhi-NCR, Bangalore, Hyderabad, Chennai, Kolkata and Pune. Average prices per sq. ft. touched roughly INR 5, 550 for 2018 as compared to INR 5, 490 per sq. ft. in 2017.
Housing prices are expected to remain largely stable in 2019 without any major upheavals as per reports. Demand has been going up steadily for real estate in India and sales volumes have also increased likewise as per real estate developers. However, demand is more for ready to move in property and is a little on the lower side for under construction projects. Supply of residential units remained high in 2018 due to the Government’s thrust on affordable housing. Going forward, affordable housing should be the biggest driver of future growth throughout the country.
New launches throughout the top 7 cities stood at 193, 600 units in 2018 and 41% of this tally or roughly 79, 400 units pertained to the affordable housing category. The resale or secondary market should also receive a major boost, particularly in case of ready-to-move properties which do not have completion certificates yet with the GST rate being slashed. Developers are also looking to tap shifting buyer preference for ready to move properties since these do not attract GST. Developers are also looking to absorb the GST fees in case of ready to move properties which do not possess completion certificates as of yet.
The commercial real estate market should continue doing excellently in 2019, continuing the momentum garnered in 2018. Close to 40-42 million sq. ft. was absorbed in 2018 across commercial categories with supply levels touching 30 million sq. ft. The first REIT listing in the country is expected early in 2019 and this will spur heightened influx of liquidity for the commercial office space category. Retail sectors should also keep doing well in 2019 and this will have a direct impact on progress in the residential real estate space.
