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Friday, 28 February 2020
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Trends that would shape the real estate sector in 2020

Written by Posted On Friday, 17 January 2020 02:51
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In India, real estate is one of the prime sectors, that supports its economy. It contributes to around 6 to 8% of the country’s GDP. In terms of the generation of employment, it occupies the second position. Over the last few years, the real estate sector in India has witnessed several changes in policy. The developers are coming up with fresh residential and commercial projects, that live up to the expectations of the homebuyers. The buyers have also become more cautious while investing in real estate projects. However, the industry is recovering from its crisis, and several new trends are showing up. Here are certain trends, that would define real estate in 2020 in India.

Technological transformation

The technological transformation in real estate would be playing a major role in driving the industry forward in the coming years. The buyers, as well as the sellers, are benefitting from this transformation. It enhances the construction process and simplifies the process of purchasing a property. Technology has the potential to leverage the overall real estate industry, providing better action to information and meeting the expectations of customers. Over the years, technology has been fostering a better business environment in the real estate sector, and this trend is likely to continue throughout 2020. Automated homes and smart technologies are likely to penetrate deeper into the real estate sector.

Technology also reduces the time needed for real estate constructions, without compromising the quality of buildings. Besides, it makes the construction process more cost-effective. Virtual reality and augmented reality have also enhanced the marketing process of real estate projects. This enables potential buyers to experience the property in Mumbai, even when they are not physically present there. In 2020, technologies like blockchain and IoT are further likely to find wider use in real estate.

Interest of foreigners

The real estate industry in India has benefitted considerably from foreign investment. NRIs and other people have been investing in real estate to a larger extent in the last couple of years. Particularly, with the weakening of the rupee against the dollar, foreigners are finding lucrative real estate investment potentials in these properties. Particularly, the commercial segment has witnessed a consistent demand from NRIs. Several Mumbai Properties in the major cities have been booked by this section of investors. This is a positive growth trend for the real estate industry, and 2020 is likely to witness several such acquisitions. Commercial property has the potential to generate greater rental income, as compared to residential ones. Foreigners are investing in the A grade office spaces in India. This is a great feat for Indian real estate, and property sales are likely to increase in the coming months, thanks to foreign investment.

Demand on the needs of consumers

The real estate developers have been focusing on the needs of customers while launching property in Mumbai. They have significantly worked to realign their strategies. As a result, property owners can now purchase affordable homes within their budgets. Small and new developers are also trying to deliver a customized experience to the buyers. The developers, therefore, are focusing on the needs of millennials and corporate employees. The new projects come in various formats, and one can choose from penthouses, apartments, villas, studios, and bungalows. The prices of such projects also range significantly, from affordable to high. Therefore, the sizes of apartments are being adjusted to fit them into the buyers’ budgets. The developers are also open to acquisitions, consolidations, mergers, joint ventures, and joint developments. In 2020, the developers would be focusing on the needs of property buyers to a greater extent.

Consolidation of the market will become more pronounced

Although the overall sales of residential real estate have remained weak in India, the leading developers have displayed sustainable sales in the key cities. They are also hiving off their assets to reduce the debt. On the other hand, the smaller developers are facing it difficult to survive. A greater number of real estate firms are facing insolvency issues. The government has declared the INR 25,000 crore fund to bail the industry out of the crisis. This will give a new lease of life to the projects that are presently stalled, or the ones that are running behind the schedule.

Apart from the trends that have been presented above, the real estate industry will witness a greater diversification. Investors and homeowners would find an ideal time to invest in the projects. The industry is likely to strengthen in the next few months. In a nutshell, the real estate industry in 2020 would enjoy a good consolidation phase.

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