India’s market for apartments is in the best shape it has been for a decade.
The government, which had been targeting an investment of $4 billion to help revive the sector, has announced an additional $2 billion over three years to help fund new projects.
This will help the sector attract new investors, and ensure that they invest in real estate and apartments that are sustainable and affordable, says M.R. Narasimhan, chairman of the real estate advisory group of the Confederation of Indian Industry (CII).
He says the country’s real estate market has been severely hurt by a slump in oil prices.
India is now the fourth-largest market for apartment construction after China, India and the US.
It has seen a steady drop in prices over the past decade, but that trend is unlikely to reverse anytime soon.
India’s apartment sector is expected to grow by an estimated 3.7 percent in the next two years, from a projected 3.3 percent in 2018, according to research firm CB Insights.
However, analysts warn that demand for apartments will continue to drop, especially in urban areas.
“India is still far behind the rest of the world, where the average apartment price is currently at around $3,000, according of data from CB Insight.
As we see from our data, apartment prices in India are expected to decline in 2019 and 2020, with the largest decline in urban area prices,” Narasman said.
“The government’s plans for a massive investment to help build new apartment projects in 2020 will only add to the pressures.”
India has one of the lowest apartment construction and lease prices in the world.
According to CB Insakes, an apartment construction company, the average price for a two-bedroom apartment in India is $1,700.
That figure is down from $1.3 million in 2015, and from $2.4 million in 2016.
Rents in the country are also expected to drop significantly over the next decade, as people move from renting to owning apartments, which would mean lower wages.
While a slowdown in demand for apartment housing is not expected to slow growth in the apartment market, Narasminh said that apartment owners could find themselves having to adjust to a more affordable rental market.
“A decrease in the cost of living, coupled with an increased number of apartments and rental properties available will lead to the introduction of more affordable apartments,” he said.
The government has also been putting in place measures to help keep the apartment sector afloat, with a new scheme called the apartment loan scheme, which provides loans to developers of apartment buildings and condos.
The government is also trying to reduce the number of vacant apartments.
This has resulted in the construction of new apartment complexes, which are often larger and offer better quality apartments.
But some developers are struggling to find enough buyers to build them.
The construction of these apartments has slowed since the government’s new plan for apartment projects was announced, as they are now required to submit proposals within three months of the deadline.
Another issue that could keep the market afloat is the high cost of electricity, which is an issue for many apartment owners in India.
“The government needs to ensure that electricity prices do not rise to astronomical levels and allow the apartments to become affordable for the middle class,” Narhasman said, adding that the government could also try to introduce a new law to incentivise developers to use renewable energy sources, such as solar power and wind power.
A growing number of apartment projects are now under construction in the city of Mumbai, which has a population of about 1.5 million people.
The city has seen an increase in the number and type of apartments being built over the last few years, but this has not been matched by an increase of the total number of residential units in the area.
Narasmin said that the city has now seen a rise in the demand for new apartments.
“This is encouraging for developers because the city is already a huge area and the developers are now looking to get more apartments built,” he added.
Despite the rapid growth in apartment construction, Narhasmin said there is still a long way to go.
“For the medium-term, I think we are still in a relatively nascent stage of apartment development.
I do not expect it to be the last big boom for the industry in India, but there will be more and more apartments being constructed and the market for these will continue in a fairly short period of time,” he concluded.
Featured image credit: Bloomberg