Structural Shift In Residential Real Estate In India
Research article on demographic trends in RE
In a nutshell
The markets and stakeholders who would take cognizance of the factual positions and evolve strategies to make the most of the demographic dividend emerge as the winner
The residential sector in India has been through an evolutionary journey of its own reshaping the industry with its ebb and flow across several economic cycles of growth and slump. In this process and time period the Indian economy, both on the macro and micro front, has gone through its own phase of development. Rise in urbanisation rate, increasing household income and favourable government policies has bode well for the residential market.
The residential segment contributes ~80% of the real estate sector in India and is the second highest employment generator second to agriculture. The sector is expected to reach US$1Trn in size by 2030 and contribute 13% to India’s GDP by 2025. This makes it an important asset class both from a sheer size and the potential to generate value for the economy. Various regulatory guidelines and actions in the form of Real Estate Regulatory Act (RERA), Benami Transactions Act, Demonetization, Housing for All to boost affordability, Insolvency & Bankruptcy Code (IBC Act), Stamp duty benefits, to name a few have been instrumental in improving transparency and attracting private investments into the sector.
Despite the headwinds induced by COVID and the NBFC crisis, the long term secular fundamentals of the sector remain intact and has been the driving force in generating stable demand and positive sentiment among the investor & end-user community.