At the beginning of 2020, the real estate market in India continues to see a struggling housing segment because of the funding crisis. However, the go
At the beginning of 2020, the real estate market in India continues to see a struggling housing segment because of the funding crisis. However, the good news for a plotting development company in Hyderabad like BBG India is that commercial ventures such as co-working offices are becoming more popular. The real estate sector needs effective measures from the government to increase demand and help the industry recover properly from the sluggish demand.
As mentioned above, 2019 was a difficult year for real estate companies as they struggled with the funding crisis. Meanwhile, problems affecting the banking and NBFC sectors also had a deleterious effect. Further, the economic slowdown worsened the situation and decreased housing demand. Other factors impacting growth were the consequences of demonetization as well as the introduction of GST and RERA regulations.
As a result, currently, the Indian real estate industry is saddled with an enormous unsold stock of 4.5 lakh homes. This is ironical because there is a great need for affordable housing in the nation.
At the beginning of 2020, we look at the emerging interesting trends in the real estate sector and boldly make predictions for the industry for this year:
Housing Sector
Real estate developers in Hyderabad and other cities know that number of users have started to place their money in the housing segment compared to investors looking for profit. In cities like Mumbai and Delhi, the investor to user ratios was 60-40 a few years back. But returns in this sector have decreased and a number of big builders have defaulted on their projects. As a result, investors looking for profit have turned away. In fact, investor participation has reduced to just 5% to 10% in the housing segment.
Further, even end-users are clearly favoring projects that are ready to move in as there are not willing to take risks. We foresee that this pattern of end-users dominating the homes sector will continue in 2020 as well as the near future, even if the economic scenario improves.
The good news for a plotting development company in Hyderabad is that the government is taking steps to promote affordable housing of less than Rs. 50 lakh among the public. This trend has helped this segment to account for about 50% of the total sales in the residential sector. As a result, numerous builders are foraying into this category. Meanwhile, the government can further boost demand by introducing additional robust measures to help middle-class people realize their dream of buying their own home.
Commercial and Office Segments
The silver lining for real estate developers in Hyderabad and other Indian cities is that the commercial segment is showing positive growth. In the first half of 2019, a robust 28 million sq ft of office transactions was achieved. This is the result of strong demand from IT and ITES companies. Indian IT companies have upgraded their services and capabilities, and have entered into high-value areas such as product development, data analytics, and artificial intelligence, which is leading to an increase in demand for office spaces.
Further, big companies like Facebook, Apple, and WhatsApp are expanding their Indian operations and need additional office space to support their growth. As a result, the year 2020 will be great for any resourceful real estate company in Hyderabad that supplies commercial spaces to corporations.
In addition, India’s IT capital of Bengaluru has become saturated in terms of population, traffic, and infrastructure. This makes Hyderabad a viable alternative for office transactions. The Telangana government is also proactively supporting commercial growth, helping Hyderabad to attract numerous multinational companies as well as real estate developers seeking to cater to the increased demand.
Co-working Spaces will Flourish
The demand for co-working office increased sharply in 2019 accounting for 13% of all office transactions, growing headily from just 5% in 2017. Both large IT enterprises, as well as smart startups, find this model attractive. Operators catering to the co-working segment are therefore ramping up their facilities and infrastructure to cater to the boom. In addition, demand for co-living spaces like a senior citizen and student living is also set to grow and gain momentum in 2020 and beyond.
About BBG India
BBG India is a prominent real estate company in Hyderabad that presents quality and affordable projects in the city and other places. You can securely invest in our properties as we fully guarantee the robustness and safety of our constructions. Contact us today for information on the plots and housing projects we offer in prime locations.
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