Contributing over 13% to the National GDP, and expected to cross $1 Trillion by 2031, this is the Power of the Real Estate Sector in India. Actually, Real Estate is not just an Investment Avenue in India but a financial and cultural milestone as well. If you want to grow your wealth and maximize your returns then Investing in Real Estate is one of the safest and most rewarding strategies. Let’s discuss some Investment strategies to maximize your returns.
Snapshot of Indian Real Estate Landscape
Favourable Government policies, continuous infrastructural development and urbanization helped exponential real estate market growth in India.
- Market Size: In 2023, the valuation of Indian Real Estate Market was $265 billion and it’s growing by 8.8% CAGR.
- Housing Demand: The Urban population of India will be 600 million by 2031, hence creating a significant amount of demand for both affordable and luxury housing.
- Office Space: A record 50.6 Million Square Feet of Office Space absorption in 2022 shows that Commercial Real Estate is becoming a more lucrative option for investors.
Area with High Growth
Which sector to invest in?? The answer is simply “high-growth regions”. Let’s see which sector gives the maximum return.
- Residential: The government schemes like Pradhan Mantri Awas Yojna (PMAY) have boosted the residential sector. Reportedly 123 Lakhs Houses have been sanctioned under this scheme by 2024. And in Cities like Delhi NCR, Mumbai and Bengaluru the sales of Luxury Residential Properties are growing by 20% YoY.
- Commercial: If we talk about Grade A Office Space, then with a rental yield of 6-10% Delhi NCR, Hyderabad and Bengaluru become the top markets. With a CAGR of 25%, the co-working spaces are catering to India’s Startup revolution.
- Industrial: Tier 2 Cities are becoming the emerging hotspot and will grow by 35% in 2031, this growth is driven by enhanced e-commerce and the demand for warehouses.
- Land and Plotting: North India is under Rapid Plotted Development especially Haryana and Rajasthan and with 12-15% Annual Returns Deen Dayal Jan Awas Yojna is gaining traction.
Strategies to get Maximize Returns
- Under Market Dynamics: With high demand and limited supply, Residential property prices in Gurugram are increasing by 15% in 2022. Investors who entered early got a significant amount of return as well.
- Leverage Government Schemes: India’s first listed REIT Embassy Office Part REIT has offered around 9% annual return since its inception and democratized Real Estate Investment. Pune, Surat and Indore are the top cities for smart city investment missions.
- Infrastructural Growth: You know metro corridors are the best option for connectivity, that’s why Delhi and Bengaluru have been appreciated by 20-30% for the last 5 years.
Data-Driven Investment
- Rental Yield: The Residential Rental Yield in India is just 2-3% but commercial yield offers 9%. Hyderabad and Pune are at the top with 10% of rental appreciation in 2023.
- Tier 2 Cities ROI: Jaipur, Coimbatore and Lucknow are growing at the rate of 15-20% annually driven by increasing connectivity and affordable prices.
Risks Mitigation Strategies
If rewards are attractive in Real Estate Market, don’t forget risks like market fluctuations, regulatory changes and other tenant issues. Risk Management Strategies for Real Estate Investor is must.
- To mitigate the risks, you need to diversify your portfolio across types of properties (Residential, Commercial and Industrial)
- You can invest in REIT as well, which ensures a steady income.
- Don’t forget to use professional real estate advisory services to study properties thoroughly.
The Road Ahead
No Doubt the Indian Real Estate Market’s Future is very promising and with the current urban expansion, govt. policies support and technology integration making its future more lucrative.
- Environmental Conscious: We are the 2nd Largest market of green buildings. For those investors who are environmentally conscious, the Indian Real Estate Market is what you are looking for.
- Digital Transactions: With the integration of Blockchain, the transaction has become smooth, transparent and more secure.
Conclusion
In India, Real Estate is always a potent option for wealth creation and maximising your returns. An investor can easily leverage data, focus on the growth regions, align with government policies and align with infrastructural trends to get maximum returns on his investment. This is the time to invest in India, whether you are investing in Residential, Commercial or Farmland. Make your decision and watch your wealth grow exponentially.
