Rising Demand, Rising Supply, Rising Prices
Real Estate Industry is passing through a very exciting phase where demand is increasing and so is the supply.But surprisingly in environment of rising demand and rising supply,the prices are also increasing whereas one would have imagined the prices to be stable.
We can draw the inference if we dissect the demand nature and the supply creation.In housing, the demand is for large size apartments- 3 BR, 4 BR etc. Over and above luxury specs , fully loaded apartments are are in demand.The inventory of such apartments is practically not available as very few developers create such inventories simply because these are difficult to sell since the fully loaded apartments with luxury specs are expensive and unaffordable for most.
After Covid people have started giving priority to living spaces with all the comforts which has fuelled the need for creating such an inventory.The prices of this kind of exciting offering are rising due to short inventory . More and more regional developers have now shifted their focus from premium to luxury housing. Riding the current momentum of demand for luxury homes, the new launches are coming at a high price.
Other than the residential segment where we are seeing rise in demand, supply and prices, is the industrial sector.The Make in India initiative of the government has created a massive need for industrialization, specially for MSME and SME segment. Over the past one year , the SME sector has seen many IPOs which indicates the growing need for Industrial land.
The central government’s Gati Shakti initiative and state government’s investment missions have excited not only the large-scale industry to set up big units but also provided land and infrastructure to SMEs and MSMEs.Make in India is a game changer initiative and this has led to increasing demand, supply and pricing of Industrial Realty. Data Centers continue to attract large scale local and international investments. Top developers of the country are investing thousands of crores in setting up Data Centers, with Lodha and Hiranandani group leading the race.
Consequently, , the demand-supply and pricing of agriculture land has gone through the roof, specially in Tier 2 and Tier 3 cities.The government is acquiring land for industrial parks , ports , airports , roads, bridges, metro and so on. This has led to depleting supply of agriculture land .Next to infra developments, we also see land absorption by the investors.
On the Commercial Retail and Office supply front, the stance is neutral.It will follow the flowchart of development and we will see euphoria in these markets probably in 2-3 years.
Torbit Take For 2025
Agriculture Land In Tier 2 cities will see massive interest leading to absorption and price appreciation.
Large format apartments or small villas in 100/150/250 sq. yards sizes in Tier 2 cities will draw attention and absorption.
There will be focus on SMEs/MSMEs in Tier 2 Cities and on land parcels of 500 mtr, 1000 mtr, 2000 mtr .
Land for warehousing in the vicinity of Railways, Roads and Cargo Terminals will be in demand.
Land transactions closer to IT hubs will be seen for Data Centers .
Commercial Retail, Office Real Estate will see a decade long upward swing as India’s GDP is poised to grow between 7-8% over the next decade.
Road Ahead For Housing Finance
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