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The Indian Real Estate sector has been experiencing unprecedented growth along with rapid economic development over the past couple of decades, despite the fact that the sector is fragmented and transactions costs are high. This growth can be attributed to several structural factors, among them rising income, the nuclearisation of families, increased urbanization and the easy availability of finance.
Now, that the euphoria has reached a point where the major concern is whether the market is overheated. The situation has become a dilemma for both investors and end-users as the property market has over-expanded in relation to economic fundamentals.
Investors have opted for a wait-and-see attitude in recent times to cope with economic uncertainties and rising inflation. However, they cannot prolong this strategy over the long term due to the inherent need for housing and commercial projects. In such a scenario cautious decision-making supported by proper research is advised.
Beyond the current cycle, the real estate market will strengthen along with a robust financial and capital system, good infrastructure with a better regulatory framework and improved transparency. The Government has started taking initiatives in order to maintain the speedy and sustained growth in this sector.
Surabhi Arora
Senior Manager
Colliers International India Research
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