Dr. Anil Jindal,Chairman SRS GROUP
The real estate market has seen a dramatic upheavel with the turn of this century, by components such as demographics, interest rates, location and the state of the economy, emboldening the growth of properties in the country. Let us get a glimpse into the key deciders that have driven the upsurge in the market scenario:
Location
With the rise of mobility and connectivity, locations have started playing a key role in real estate decisions. Buildings and properties, located in commercial and market areas, hold enhanced value in terms of salebility and demand. Similarly brokers are seen quoting a higher price for buildings in well developed and approved colonies , in comparison to those in upcoming areas, making these areas prime for real estate purchase.
Amenities
Valuation of property is being based on the availability of necessities and facilities connected with housing as focus shifts from commercial to residential space. The valuation of properties with better infrastructural capabilities and modern amenities are costlier than those which fail to provide proper electric connections, telephone lines, water sewerage facilities and all other ammenities. Home buyers are seeking out properties that provide the most out of their value, looking for a residential stability in exchange to money.
Disposable Income
With the increase in job prospects, a larger rise of economy is taking place in Tier II and III cities. Indians are now armed with disposable income, making them a willing target for real estate players of various statures. The valuation of property has evolved in direct proportion to the net disposable income in the hands of the residents of the area.
Interest rate
High interest rates by banks and other financial institutions are greatly affecting the affordability of property. It’s commonly noted that lower the interest rates dips, the higher the real estate demand spikes. In recent years, the Reserve Bank of India (RBI) had announced its popular decision to reduce repo rate 25bps to 7.75 %, which has led to banks and NBFCs (Non Banking Financial Companies) reducing their interest rate on home loans. This has played a major part in the increased demand for property.
Conclusion
India has been known as a plum market for real estate and these factors cement the notion to the largest extent. The writing is clear on the wall: real estate will see unprecedented growth in the years to come.