Infra Talk: Major trends for Indian real estate this year

Throughout 2016, the number of new residential project launches was lower than units sold. With all states staring at the approaching deadline to implement their versions of the Real Estate Regulation & Development Act (RERA), most of them will definitely fall in line. 

The Goods and Services Tax (GST) and the Benami Property Act will also have a major impact on how many developers run their businesses. Demonetisation shook up the older ways of working, but did not affect self-governing developers with the right products targeted at the working masses. The rest have realised it is time now to revamp their existing business models if they want to remain in business at all. 

Currently, the residential property market is dominated by end-users - speculative investors are making a beeline out of real estate as an invest ment category. Residential demand is expected to pick up only towards the end of 2017 - but the recovery will be sustainable and based on much sounder market fundamentals than transient sentiment. 

The commercial office space sector will get a strong shot in the arm with REITs. Real Estate Investment Trusts will have an important and long-term impact on developers and present them with the choice of either ‘corporatising’ or risking take-over by their bigger and better-organized counterparts. The pressure from funding agencies will simply be too strong to ignore.

Corporate developers such as Tata, Godrej, L&T, Bharti, Mahindra, etc. will acquire more projects, and corporate houses like Birla are gearing up for their maiden innings in real estate development. Institutional funding will increase. 

Co-working spaces are popping up across Indian metros as well as tier-II cities, providing start-ups with flexible working options at affordable rents. At last count, there were more than 100 operators in this space across India, though there is still very limited supply of co-working spaces available.