Conducive government initiatives and focus on physical infrastructure like airports, flyovers, metro rail corridors and a vast network of highways and expressways, are fuelling rapid growth in smaller towns.
The real estate sector in India is set to take a major leap, thanks to a host of initiatives by the Centre and the state governments, including the ambitious Smart City project. As an outcome of the Smart City project, real estate, which was largely confined to metro cities, has begun expanding to tier-II and tier-III cities in states like Bihar, Madhya Pradesh, Chhattisgarh, Kerala and Odisha, among many other states.
Experts believe that the Smart City project, where there is a plan to build 100 Smart Cities, is a prime opportunity for real estate companies. As per estimates, India’s urban population is expected to surpass 850 million by 2050, of which 50% is expected to be in the age group of 19-58 years. With increasing disposable incomes and nuclear families, this will consequently lead to higher demand for housing and organised retail.
Smaller cities with high mid-income population base are the epicenter of untapped demand for residential units. High availability of land and that too at much affordable prices compared to metro cities come as an added advantage for real estate developers.
... as RERA becomes an integral part of planning, developers will turn towards end users and shift their focus to these cities.
The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform which will help in allowing all kinds of investors to invest in the Indian real estate market. It would create an opportunity worth Rs 1.25 trillion ($19.65 billion) in the Indian market over the years.
The real estate sector in India is expected to reach a market size of $1 trillion by 2030 from $120 billion in 2017 and contribute 13% of the country’s GDP by 2025. Retail, hospitality and the commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs. Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. Commercial office stock in India is expected to cross 600 million square feet by 2018 end, while office space leasing in the top eight cities is expected to cross 100 million square feet during 2018-20.