India could be amongst the worst affected countries from climate change owing to the stage of development the country is right now in. The GoI is gradually pushing for sustainability and eco-friendliness of the real estate projects. Projects with minimum environmental impact, sustainable concepts and climate friendly technologies are getting faster approvals & support. This will lead to faster completion & handover of the projects to the end users. In the longer run, these factors will be the driving forces of investments in the sector. However, In the short term, factors that may lead to the investment may be different as below –
Real estate is a safe investment option
The high gold prices are a sign that the investors are looking for safety. Real estate being a real asset is one of the safest avenues to secure capital. On one hand it gives a sense of safety of owning something real, it also generates steady passive income on the other. The ready to move unsold properties are attracting investors and home buyers.
Government’s commitment towards smart cities and affordable housing
This is one of the factors which is driving real estate investments. The focus of the government towards developing the smart cities is encouraging the developers to infuse the funds in the land banks.
Reversal of sentiments
Home loan rates have fallen sharply post demonetisation. Currently the rates are among the cheapest in the history of India. Moreover, the slowdown in the sector has led to the fall of property prices in several areas. These factors have once again made owning a house cheaper or equivalent to renting. A lot of home buyers have once again started investing in real estate.
Equity markets are highly volatile
In the last decade and half, stock trading was one of the most profitable avenues for short term investors. Currently, the equity markets are highly volatile. The volatility of the stock market is pushing the smaller and risk averse investors in search for safety to invest in real estate.
FDI norms relaxation will attract investments
The government of India has allowed up to 100 percent FDI in real estate. This will lead India becoming one of the safe havens for institutional investors investing in real estate. Indian economy is mostly dependent on the domestic market and has strong rural demand. This makes it less vulnerable to the economic turmoil across the world.
Adapting to the new normal
Adaptation of new normal will help recover faster than expected. The lower mortality rate in the country and hope for a cure in near future are pumping positive sentiments in the market.