With a number of initiatives and policies coming up, 2020 is expected to be the year of emerging micro-markets, with huge demand for quality homes along with the transparency in the real estate deals and improved accountability of builders. According to an industry report, the real estate sector will be at the centre of rapid economic and social development, which will further transform the economy. These emerging trends and new upheaval are supposed to create a highly competitive environment for the developers. CREDAI & IBEF report says that the sector will reach US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13 percent of the country’s GDP by 2025. Moreover, the housing sector’s contribution to the GDP is expected to almost double to more than 11% by 2020. Hence, the real estate industry could be different and bring new reforms within the next few decades
Disruptive technologies in construction to act a game changer
The emerging technologies in the construction sector have made the large players implement new techniques that ensure fast and quality delivery within the stipulated time. The technological innovations, such as Robotics and Cognitive Automation, Artificial Intelligence (AI), Machine Learning, Internet of Things (IoT) is supposed to impact more on transformation of Indian realty sector in 2020. For developers, technology advances will make eco-efficient building more viable.
These technology innovations will further precede effective planning in construction project management, leading to leaner construction, optimized cost value, better quality, and value engineered products.
Spurt in NRI investments, tailwinds to propel real estate to a trillion-dollar economy
The transparency in policies and the ease to do business have attracted many foreign investors to enter the real estate market and capture a substantial share. Now, with the increase in NRI investments, the real estate sector is expected to escalate more in 2020. As per a recent industry research report, there has been an NRI investment of approx. Rs. 46,000 crores in the last three months. The growth outlook across both residential and commercial real estate is turning positive now.
Sustainable Housing to be adopted by the builders and agents
Undoubtedly, the future of the real estate industry is sustainable housing. Architects and Builders are working towards creating buildings with sustainable infrastructure, green housing concept with good air quality, spaces for social gatherings and better concept to manage resources and waste. A current industry report says that the developers will look forward to integrating sustainability criteria into prime office buildings, new cities and individual homes. Therefore, in order to secure the future of the next generation, the investments in the designs that support sustainability is expected to increase.
REITs to bring in further transparency in real estate transactions
The reformative steps and policies in the form of RERA, GST, REIT (real estate investment trust), Benami transaction Amendment Act and Pradhan Mantri Awas Yojana have made the real estate sector much more transparent with financial discipline and increased efficiency. The concept of REIT is a great boon to the investors. In the coming year, they will get capital appreciation and income from the property without having to essentially purchase and maintain it. It will open real estate to a broader spectrum of investors who are particularly looking to invest in the affordable housing sector.
Implementation of REITs (real estate investment trusts) is further believed to encourage NRIs for real estate investment in India.
Affordable housing: A big opportunity
Affordable housing will be a sector that will continue to be a key driver for real estate market and provide a big opportunity for both developers as well as investors in the next few years. There is a possibility of collaboration of the developers and the top Government organizations. This would ensure the minimization of the risks that arise due to schemes.
It is hard to undermine the fact that the real estate sector has been the backbone of the Indian economy for a very long period and has been a major contributor in the economic growth. Peering into the crystal ball, the year 2020 will have its fair share of ups and downs for the real estate industry. However, with better housing options and government initiatives to support the buyer and policies which usher transparency, 2020 is expected to be a good year for construction and real estate industry.