If you’re looking to buy property India, you will want to know if there is going to be a turnaround in the Indian housing market at all in 2016. After all, 2015 wasn’t a great year for those who were looking to sell property India. There was a contraction of real estate prices in cities such as Mumbai and Delhi, for example. So, is a turnaround likely in 2016?
Pirojsha Godrej, CEO of Godrej Properties says there will be a turnaround, but doesn’t know when that’s going to be. Mr. Godrej says, "I'd be lying if I said I knew when that turnaround will happen, but I think it will happen sooner than people think, and I am confident it will be sharper than people expect. Because there is no doubt in any of our minds that there is going to be tremendous demand for Indian real estate and this is going to be a multi-decade-long road story."
The reason for this is that India only has a 30 to 35% of its population living in cities. This number is expected to rise dramatically over the next decade or so. Incomes in India are growing steadily, maybe not as much as fast as most people want them to, but the fact remains that the Indian GDP is growing at 7 to 8%. This is a phenomenal growth rate and this is similar to what Japan experienced following the end of World War 2 and what China has seen over the last couple of decades.
So there is no question that there will be a turnaround in the Indian property market in 2016. When that happens, only time will tell. But when it does happen, we expect the turnaround to be surprisingly strong. Keeping that in mind, here are the top trends we can see emerging in the Indian property market in 2016.
We expect prices to be stable in 2016, and not as volatile as they have been in 2014 and 2015. There have been a slew of reforms in real estate introduced by the Narendra Modi government, which should keep property prices steady. In fact, if prices stay stable for much of 2016, that will build a solid foundation for years to come.
Residential Property Will Be Fashionable Again
Residential properties will once again be big in India and seen as valuable long-term investments. Indians have always invested in real estate for the long term, properties in India pass from one generation to another, and that trend is going to continue in 2016. There won’t be the sort of speculative investment that we have seen in the recent past.
Demand for Affordable Housing
In many Indian cities, properties are priced over and above what most people can pay for them. In Mumbai, for example, unless someone earns an income of $30,000/year – which is astronomical by Indian standards – it’s practically impossible to buy a property. So there is a lot of pent up demand for affordable housing and developers who cater to this growing need will do much better than those who serve only the high-end market.
It’s All About Location
Where you buy real estate in India will make all the difference. For example, in Bangalore, which is India’s hottest real estate market by far, some areas command a premium over the rest. People will spend more for housing in areas that have all modern amenities and great schools. Internet connectivity also plays a big role here.
Chennai, Mumbai and Hyderabad will do Well
Among Indian cities, Chennai will impress most because of new developments catering to middle income families. Mumbai builders are expected to do well because of a renewed focus on lower income households. Hyderabad is expected to do better than in the recent past because there is no longer any doubt over its political future with the statehood of Telangana decided.