The Founder and Managing Director of Sahiti Group, Dr. Boodati Lakshmi Narayana, began his role as an individual builder in 2000, with over two decades of experience in the construction industry. He brings a wealth of knowledge and professionalism to any project he is involved in. He is a successful industrialist and a venture capitalist based out of Hyderabad. He placed himself in the highly competitive construction industry over a period of 10 years. He established Sahiti Constructions as a partnership firm in the year 2010 and has so far successfully completed over 20 residential and commercial projects at various locations in Telangana and Andhra Pradesh.
More than a year and a half into and after the pandemic, let’s look at how the real estate sector is shaping up for new and old buyers
Real estate market is seeing steady growth across the globe, and this is despite and after the pandemic. According to India Brand Equity Foundation’s Real Estate analysis, the Indian real estate sector is expected to grow to a market size of US$ 1 trillion by 2030, and RS. 65,000 Crore ($ 9.30 billion) by 2040. It is expected to contribute towards 13% of the country’s GDP by 2025. Retail, hospitality, and commercial real estate are also expanding rapidly, supplying much-needed infrastructure for India’s expanding needs both for residence and commercial purposes.
The construction industry ranks third among the major 14 sectors of the primary, secondary and tertiary economy. It is also expected that this industry can incur more non-resident investments (NRI) both in the long term and short term. According to ICRA estimates, Indian firms will raise more than Rs. 3.5 trillion (US$ 48 billion) through infrastructure and real estate investment trusts in 2022, compared to US$ 29 billion raised to date.
With such great numbers, it is clear that the industry of Real estate is booming and for those who are planning to invest in realty, there is no better time than now.
Post Pandemic Inflation: It is predicted that the investment post pandemic will be beneficial for those who are planning to invest, as overall inflation in the property rates is expected to happen in future due to price hikes in the raw material. If we talk about the robust demand and opportunities, the Security and Exchange Board of India has reduced the lower minimum application value for Real Estate investment trust from INR 50,000 to 10,000 and 15,000 to make the market and commercial areas more accessible for the small and retail investors. Also driven by transparency and returns, there’s a huge surge in private investment in this sector.
However, before taking a step ahead, investors should understand that investing in real estate with a passive strategy is a viable way to get started. Before investing actively, there is a lot for investors to understand, making sound decisions necessitates research. There is a huge difference in how first-time homeowners should invest in real estate and how serial investors will.
Affordability: Your new investment should be Affordable and should not hinder your plans. Home purchase affordability index (JLL HPAI 2021) shows that between 2013-2021 affordability has increased in the following cities- Delhi, Mumbai, Chennai, Kolkata, Hyderabad, and Bangalore. Most of the people answered that they are looking forward to investing their prosperity in Real Estates and look at it as a beneficial investment for their future. According to Knight Frank Research 2021, 24% of the Global survey respondents have indicated an increase in spending power since the start of the crisis. In the Mainstream Indian Segment, 38% of respondents indicate a rise. For the segment of the population where the income levels were not adversely impacted as a result of the pandemic, a higher savings rate has played out in such an increase that shows great optimism in people and their interest in investing in Real Estates.
Overall Market Overview: Another segment of research 2021 showed that 61% of respondents in the Mainstream Indian Segment and 32% in the Global Indian Segment expect prices for primary residences to rise in the next 12 months. It demonstrates that 2021 has great potential for both residential and commercial real estate businesses, and because Real Estate Investment Trusts (REITs) are required to be fully functional as well as to generate revenue, these have surfaced as one of the most sustainable investment choices when opposed to ordinary property purchase. Hence, these efforts also contribute to the high demand and widespread of residential and luxury estates.
Favourable Govt. Policies: Govt. of India along with the state governments have taken some initiative for the development of the Real-Estate sector- Finance Minister Nirmala Sitharaman announced The Atmanirbhar Bharat 3.0 package in November 2020 which included income tax relief measures for real estate developers and homebuyers for primary purchase/sale of residential units of value (up to Rs. 2 crores (US$ 271,450.60) from November 12, 2020, to June 30, 2021). Likewise, The Union Budget 2021-22 has extended the tax exemption for interest on housing loans up to Rs. 1.5 lakh (US$ 2069.89) and the tax holiday for reasonably priced residential developments until the end of fiscal 2021-22. The Union Cabinet has also approved the establishment of an Rs. 25,000 crore (US$ 3.58 billion) alternative investment fund to resurrect approximately 1,600 stalled housing projects across the country (AIF). Further, India had formally approved 425 SEZs as of January 31, 2021, with 265 already operational, and the majority of special economic zones (SEZs) are in the IT/BPM industry.
As a result, Real-Estate can be characterized by an increase in property value, and in recent years, with ever more multinational corporations investing in India, Real- Estate value has grown quicker than before. Even if investors invest in a seemingly lower-value property on the outskirts or in the suburbs, it can turn into a gold mine in the future. When compared to other types of investments, it yields excellent returns. It is more beneficial than storing funds in banks or purchasing gold because the value of Real Estate increases at exponential rates when compared to bank interest or gold appreciation. So, there is no better time than now to invest in a Real-Estate. Moreover, well strategized investment in real estate can be a long-term source of income for your retirement, as well as for your children and future generations.