The Indian real estate market is considered as the backbone of our economy by creating jobs in multiple allied industries. But in recent times, the real estate market is facing some hiccups due to the economic slowdown. However, it is destined to bounce back after this sluggish period.
The real estate market in India is one of the largest and ever-growing markets mainly because of our population. The need for housing is at an all-time high since independence. Indian real estate has been one of the steadiest markets as well but in the last two decades, it has become quite volatile. Mumbai and Delhi were two biggest players up until the 90s but the last quarter of a century has witnessed many Tier II and Tier III cities emerging as a real estate investment hub. Property prices all across the country have surged exponentially in the last decade alone.
There are innumerable factors that dictate the trends of the real estate market. Indian real estate contributed 6-7 percent to India’s GDP (Gross Domestic Product) and is expected to double by the year 2020. The real estate investments itself were humungous at $120 billion for the year 2017 and are expected to reach $1 trillion by the year 2030 making it the third-largest globally. Here are some major highlights of the Indian property market at a glance:
The average rise in property prices of some major cities for Q2 2019:
Hyderabad witnessed the highest year over year price increase at 17%, to an average of INR 5,131 (US$75) per sq. m.
In Bangalore, prices rose by 3% year over year to INR 5,157 (US$75) per sq. m.
In Chennai, prices were steady at an average of INR 5,174 (US$75) per sq. m.
In Ahmedabad, prices rose by 1% year over year to an average of INR 2,857 (US$41) per sq. m.
In Gurgaon, the average house price fell by 3% year over year to INR4, 950 (US$72) per sq. m.
In Mumbai, the average house price rose by 3% year over year to INR 9,396 (US$136) per sq. m.
In Kolkata, prices rose by 1% year over year to INR 3,936 (US$57) per sq. m.
In Pune, prices rose by 2% year over year to INR 4,821 (US$70) per sq. m.
In Noida, prices were unchanged at an average of INR 3,899 (US$57) per sq. m.
Although the Indian economy is going through a sluggish period, the real estate market is quite steady if not flourishing as expected. Given the current market scenario and our population burst, real estate investments will keep on climbing to a new every single year. However, the construction fell for the same quarter all over the country except for Gurugram that witnessed a 130% year over year to 5,945 units in Q2 2019.
Listed below are the percentage decreases in the construction of some major cities for Q2 2019:
Ahmedabad suffered the most, with the number of launches plunging by 89% year over year to just 824 units in Q2 2019 from 7,499 units in Q2 2018
In Mumbai, launches plummeted 62% year over year to 8,757 units
In Hyderabad, launches fell by 56% year over year to 2,416 units in Q2 2019
In Noida, launches fell by 52% year over year to 1,835 units
In Pune, launches fell by 42% year over year to 8,528 units
In Bangalore, launches fell by 41% year over year to 5,169 units
In Chennai, launches dropped 32% year over year to 2,374 units
In Kolkata, launches fell by 30% year over year to 2,004 units
Gurugram is an exception, with launches surging by 130% year over year to 5,945 units in Q2 2019
These two very contrasting pictures show the reality of our reality sector which has suffered majorly due to our economic slowdown. But, as they say, that the real estate market is directly proportional to population growth which looks very hard to curb, the real estate market and real estate investment will find its place in the years to come.