Can Indian real estate market be a good investment in 2021?

Indian real estate market

Can Indian real estate market be a good investment in 2021?

Indian real estate market

Indian real estate

Indian real estate market is one of the country’s mainstays, accounting for the second-highest employment generator after agriculture. The sector is closely connect to as many as 220 other industries.

The sector will contribute nearly 13% to the economy by 2025 if all reform measures succeed. Recently, the sector has been one of the most significant wealth creators.

In 2021, the pandemic may influence buyer preferences in terms of real estate: larger layouts with higher safety, hygiene, and captive amenities may find more takers. In terms of commercial real estate, satellite offices in non-traditional micromarkets, i.e. outside CBDs (Central Business Districts), will absorb more quickly and effectively.

With the widespread adoption of WFH (Work From Home) in the IT sector, ITeS buildings may face medium vacancies in the first quarter of 2021, but as the threat of COVID is mitigated, we will see greater absorption in the second and third quarters of the year.

Besides Atmanirbhar Bharat, Foreign Direct Investments also imply a strong rebound in commercial real estate. The pandemic has lowered retail vacancy rates, and demand will rise throughout 2021.

In 2021, interest rates will remain low as global central banks’ easy liquidity keeps funds seeking high-yield investments.

Following SEBI‘s amendment to the REIT rules, one can anticipate an increase in investment in residential real estate, which offers attractive returns when compared to other investment avenues.

PE investment

In 2021, the industry may attract $6 billion in PE investment if inward flow increases by 30 percent. The improved economic scenario, aided by positive reform initiatives, will support growth. For the current year, the office space segment has seen good traction.

The real estate market in India will likely remain stable in the coming years due to improving growth prospects.

Within one to two quarters, mass vaccinations will return the Indian economy to normal. Short to medium-term interest rates will remain low as the central bank maintains an accommodative stance.

A new tax policy for construction also present by the Maharashtra government. The decision will help to lower prices and is in line with the government’s goal of making housing more affordable.

ALSO READ: Home-buying? Would now be a good time to start?

In summary, the Indian real estate market will have a positive outlook in 2021 as a result of a slew of economic and policy reforms and stimulus packages implemented by the authorities.

We expect more hesitant buyers to finally take action, increasing the demand for dynamic layouts.

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