India’s real estate market has been shining bright in terms of attracting investors’ interest. After sluggish two years, the realty market in India is finally looking up. The sector is also contributing to the country’s GDP positively due to rising income levels of buyers and increasing industrial activity. In addition, government policies are also boosting the sector’s growth and encouraging investment. According to Niti Aayog, CEO Amitabh Kant and CBRE Report, the real estate market is expected to reach USD 1 trillion by 2030, accounting for 18-20% of the country’s GDP.
The Indian residential real estate market is becoming one of the most popular asset classes for investors. According to the Housing.com-NAREDCO (National Real Estate Development Council) survey found that 47% of respondents preferred real estate to gold, fixed deposits, and stocks as investments. These positive sentiments are being bolstered by the growing value of property ownership. Moreover, the value of real estate also appreciates steadily over time due to capital appreciation.
NRIs Eyeing India’s Real Estate Segment
NRI investment in the real estate market has increased over the years, enabling developers to reach a more extensive consumer base. Increasing domestic home ownership sentiments have also encouraged developers to upgrade their projects to comply with global lifestyle standards.
NRIs find India’s real estate market very appealing and are increasingly investing in properties in their homeland. The comfort of owning a home in their homeland is a big plus for NRIs, especially in times of crisis, as it gives them a sense of security. In addition, owning a home in India allows them to live and work in their homeland.
Commercial Real Estate Investments Gaining Traction
The commercial-retail real estate industry is also experiencing remarkable growth momentum driven by companies’ expansion plans. The demand for office space has improved significantly this year. According to Anarock’s report, the PE investments in office assets reached USD 1,862 million in April-September 2022, almost equal to the total investment in the previous financial year.
Additionally, retail leasing across malls and high streets in India has been on an upward growth trajectory. According to an industry report, leasing across India’s malls and high streets will surpass the previous year’s records, with new store openings increasing by 25% on a year-over-year basis in 2022. The retail sector is also expected to witness new supply and pushed demand in the coming years.
Owing to the higher return benefits associated with investments in commercial property, several domestic and NRI investors have been exploring commercial properties as a preferred investment option. According to an industry report, Delhi-NCR remains the most favoured location amongst investors as the major chunk of PE investments during April – September 2022 was in Delhi-NCR. Additionally, many millennial NRIs are investing in Indian commercial real estate, scripting India’s commercial real estate success story.
Future Prospects Look Bright
A positive sentiment surrounding the real estate sector reflects the strengthened confidence of investors and end-consumers. The current trend depicts positive growth prospects suggesting this is a great time to make a real estate investment.
The real estate sector is already India’s third-largest economic driver. This positive trend in real estate investment could propel India to third place in the world by 2030.
Authored By – Kaustubh Chandra, Manager, Marketing and Leasing, Brahma Group