Backed By Affordable Housing, India’s Real Estate To Make A Comeback
Real estate in India has witnessed some new lows in the recent past, owing to various changes that the sector had undergone. It was testing times for the sector for over three to four years now, turning potential homebuyers into fence sitters. These homebuyers are now looking forward to some positive changes in the sector that will make the market viable for them to invest in.
If reports are to be believed, a positive change in the sector will soon be a reality. According to CLSA, a Hong Kong-based brokerage company, India’s real estate sector is showing signs of recovery.
So, what makes the environment positive?
Although various factors help the sector revive and grow, some that have had a strong impact on India’s real estate sector are the rise in demand for cement in the country, better pre-sales for developers and the development under the Pradhan Mantri Awas Yojana-Urban (PMAY-U).
The demand for cement, according to CLSA, has grown double digit in the third quarter of the financial year 2018. Housing being one of the key demand drivers for this sector shows the rise in construction across the country. Housing accounts for about 67 per cent of the total demand. The quantity of cement produced in India, which stood at 350 million tonne per year in 2017, is expected to become 550 million tonne by financial year 2020.
Moreover, with the government launching various schemes to promote the production of cement, the sector is only going to witness growth. One of the key initiatives is to revive the state-run cement factories to cater to rising demand.
From plans to reality
PMAY (U) is gradually moving towards execution and delivery from just being a plan on paper. The move to begin work on two million homes, higher budgetary allocation and large contracts being given, shows how fast-paced the development on this project is.
In India, over 1.8 million houses were under-construction as of March 2018, compared to seven lakh in April 2017.
Moreover, with government incentivising developers who participate in this initiative and construct affordable housing has also grown. So, more and more renowned names in the sector are now constructing new affordable houses across India. These include L&T, NCC, Prestige Group, Mahindra Life, among others.