Major Trends that will define the Realty Market in 2018
The year 2017 has been the most eventful year of the decade for the Indian realty market, with major reform policies rolled out, to give a complete overhaul of the system. A bigger section of property developers, have termed 2017 as a year of consolidation and many are wishing, the coming year to be at least steady if not profitable, in the view of all reforms and its related processes, which are not yet much visible and clear at the implementation level.
We are discussing here some of the major factors or trends which will shape the real estate market in the coming new year-2018.
Last year, all real estate property developers of the India faced a short-term turmoil because of structural reforms brought into the system, through various policies - RERA, GST, Benami Transaction Act. Developers remain optimistic for the coming year and taking all policy changes, policy implementation, government initiatives for affordable housing segment and transformation of office space sector, as the major factors influencing buyers'decision.
Oversupply of Property
Reports have stated that oversupply of real estate properties especially in affordable housing segment can defeat the purpose. There may be few takers of such properties in the market, so providing optimum level of units as per the demand will work much better in term of ROI.
Right Research Right Profit
Launching right size of the project in the right market with right prices, will only help in reaping profits to the developer. The project can be in luxury housing segment or commercial segment, the developer should do his home-work better to attract the right audience available in the market.
Luxury Housing with Affordability
Coming year can show better results in luxury housing projects, if they are offered at affordable prices to the customers. As the oversupply of mass houses will rise, buyers who are looking for high-end properties which satisfy their quality and aspirational quotient as well, will also rise. Developers providing quality and style elements at affordable price segment will be defining factor in attracting more consumers.
With a lot of projects running behind the schedule and to avoid the RERA penalties, the coming year will see a good supply of houses, all across the Indian real estate market. The developers will prefer to deliver all the running project on time rather than launching a new one. This will help in consolidating the market and prices of all the completed units and buyers will have the most cost-effective rate tag.
Consolidation through Joint Ventures
The joint ventures or joint development will be more seen in the real estate market for 2018. The previous or running projects which were fiscally mismanaged and distressed developer with losses, will be over-taken by larger players of the market. This will help in cleaning up the market to some extent and consolidate it with lesser and better real estate development companies. By this consumers will get quality property units with on time delivery.
Small Size Projects
With RERA liability on real estate developers for on-time delivery or the projects, they may opt for more smaller projects or split larger projects into smaller phases. This will help them in efficiently managing the running project with better quality and transparent cash transactions or payments. Smaller projects get quickly completed on time, saving the developer from RERA penalties and consumers getting their houses on time.
Growth of Tier-II cities
With increasing congestion in metro cities of India, large and medium real estate property developers are evaluating their options of doing business in these cities. Metro city problems and availability of better growth prospects in Tier-II cities of India are attracting large developers to start new projects here. This may influence the property buying behaviour of consumer in both metro and tier-II cities.
Inflation and Buying Capability
Market analyst speculates that the growth in the job market and inflation may affect the buying and selling of properties, in 2018 majorly. Better job market prospects can upscale the consumer base in the real estate market considerably.