While the end of 2016 rang quite a few alarm bells with the effects of demonetisation, the start of 2017 has ushered in quite a few green signals with regards to the real-estate industry in India, and the economy in general. This augurs well as India has generally been one of the top underperformers in Asia, in spite of being the second-most populated nation in the world (but only till 2022, when we are expected to cross China’s population).
Most of the major institutional investors are now preferring India as the top destination for their real-estate ventures. Another reason is that India is the fastest-growing major economy in the world. While growth is predicted at 7.2% for the current year, the growth for the next year is predicted at 7%, as compared to 6.7% this year and 6.3% for China next year. The middle-class Indian has seen a spurt in their spending power, which reflects in the huge surge in domestic consumption. It has been one of the biggest driving factors for the economy.
The recent demonetisation drive was undertaken to ensure that the cash gets removed from the grey economy and instead, is routed through legitimate channels. While this will cause real estate to take a couple of backward steps initially, with forecasts saying that there will be slightly slower growth for the first two quarters, in the longer run, getting all the black money in regularized channels will help the economy grow.
From the start of the century, India’s economy has never had such a large share contributed in terms of consumption as it is experiencing now. The finance industry has positioned itself in a way to suit various borrowing needs and this will be good news for a population which anyways has very little or no household debt.
There have been several interest-rate cuts by Reserve Bank of India (RBI) and conditions have rarely been better to buy a property. It comes as no surprise that Bangalore and Mumbai are the two top-rated destinations for development and investment, especially for those whose plans got disrupted by the demonetisation. All-time favourites like residential plots in north Bangalore and luxury flats with luxury interiors in Jubilee Hills (Hyderabad) are seeing a growing number of enquiries over the last two weeks.
Bangalore has become the preferred hub in the last couple of years not just for IT, but also its scope of growth in real estate. Reasons like good weather and the availability of greenery within gated communities have led to an upsurge in the number of properties that have been sold in the last couple of years.
THE GENERAL PROS AND CONS OF BUYING VILLAS
Best of both worlds: Access to modern amenities, provided generally to gated communities, on a personal capacity
Faster delivery times: Less time to construct compared to apartments
Healthier lifestyle: Less pollution in terms of both, air and sound due to location
Cost: Higher price than apartments
Resale: Niche clientele for villas makes it tougher to resell as compared to other properties