Real estate industry and developers overview
The real estate industry in India is quite changed than what it used to be yesterday. We have flashy real estate developers who spend lavishly on full-page ads, we have acres of unused land ready for development and we have seen hamlets turning to developed cities too quickly than anticipated. The overall growth was really outstanding, but then are we still missing out on something? Is India’s real estate industry has not received its due growth? If it is so, why? We take a look at different aspects of India’s real estate industry. Read on!
According to some research done on property trends, and India’s evolving reality, we are facing 22.7 million housing shortage and to count on the claims the shortage can be overcome as quickly by 2022.
Although the aim is quite rational and there’s no reason denying it, the sector has not matured yet to fully take on the ambition and cater to everyone’s housing goals too quickly, despite government’s regular developmental steps aimed at simplifying property buying process.
Reasons are no surprises. India is developing. And it is giving rise to a set of issues by the way. The rise in nuclear families, migration of people from villages to urban localities, need for corporate settlement as companies are evolving and rising income level – but despite the positive factors which positively work as growth deciders, the country is still facing a great number of issues for the growth of reality.
People are not keen to buy new properties, people are not interested in reduced interest rates on home loans, and they are not showing too much of inclination to give the real estate sector a definite push – which is why we have unoccupied flats, unused inventories and pending invoices left from the part of real estate developers. They are even not keen to stay on new projects because of the time, effort and money required to begin a new project.
But, why? Why are Indian consumers not being so interested despite so many developmental efforts from the government are done to simplify the real estate sector?
We have REIT to regulate property decisions, reduced home loans, buyer protection system, improved range of scrutinized property developmental system and governing bodies taking the sides of buyers. Despite, why India’s real estate industry is making a sluggish growth?
The opportunities are good, and people can move in new flats, but still, they wait. Why so? According to growth estimates, the way India’s real estate industry is growing it should have reached to a definite hike and people should have opted for more scope to get on in new ways to invest
Some reason why people are not buying enough property
People are becoming increasingly choosy about picking out on new property options. They are waiting for more real estate developers to come and provide with affordable house options so that investment ratio becomes low. This has resulted in a gap – real estate developers are waiting for more consumers whereas consumers are waiting for more property developers and affordable options. The gap is evolving and it is restricting the growth
People are trying to get in new flats on a rented basis than to opt for new flats. It is because people are not investing a good amount of money on the new property purchase.
They are however investing their hard-owned money in other growth and future options such as bonds, PPF, pension plans, govt saving options etc. Because they are investing in bulk, making a massive investment in real estate is not practical for them
People are now picky about choosing real estate developers. Some incidents of property frauds and delayed property developments even from established players are negating the impression of established developers. This is, in turn, creating a bad impact of the real estate industry.
It means even if real estate developers are trying to lure in more customers with the improved variety of offers, people are not very keen. The invest only if they are confident about a purchase
As mentioned, property developers are trying to lure in more customers to overcome the sluggish growth of property purchase process. But people are demanding. They need more rewards. A lucky draw does not work the purpose.
Today, developers need to lure in consumers with even more improved and organized offers – such as guaranteed bike on booking before a specified date, no upfront money until the flat is handed etc. These offers cost businesses money and property developers cannot necessarily trust on consumers, and thus it is impractical to believe they would provide such benefits. They would however if consumers pledge guaranteed investment, which consumers don’t. So, a gap remains
Real estate developers need more innovative means and innovative techniques to tell consumers that they should come forward to invest money. But the rising cost of operational complexities and rise in spending has made developers to limit their offline branding.
To get a celebrity that can ensure them good investment means a lot of expenditure so they would stay cool and wait for some trend to come when they can leverage their money and then promote. So, the wait for a good day hindering the operational core
These are some of the reasons why Indian consumers are not buying property in bulk and despite there is a growth indicator people are preferring to wait. Having said that it does not mean that people are actually refraining from buying the new property.
Some cities are reported to get hiked demands from consumers and some cities are getting an increased set of queries. It is positively contributing to the growth factor; but when we talk about the overall growth of the real estate industry in India, the sector is still struggling to get in new consumers.
Property purchase processes are not complicated in India, and with the government taking developmental steps to uncomplicate the process, people are coming forward but there is a pause in growth; which when overcome; will result in a bubble burst for the real estate industry.
In gist, we can say that real estate industry in India is enough developed to scale on growth, and as consumers build trust and get more affordable options to invest in it, the sector will positively rise to a new level of growth. Till then, the sluggish growth will be in practice, but it will overcome soon.