Top 5 Real Estate Trends To Watch Out For In 2020
1 Stalled Housing Projects May See Light Of The Day
Arguably the most awaited trend that is expected to unfold in 2020 is the resumption of work on stuck housing projects that has been green-signalled by the government by setting up of a Rs 25,000 crore fund towards the end of 2019.
Kickstarting the stalled projects and handling them over to their buyers is not only important from the point of view of restoring the trust of the society in the rather crooked real estate industry in the country but is also significant from the point of view of the present government being establishing itself as an agent of change and pro-people.
There are lakhs of homebuyers who are stuck and have gone through considerable mental agony due t their life savings being stuck in various incomplete properties and starting work on these stuck projects and giving passion smoothly will bring a lot of other buyers to the real estate market and builders may again see somewhat robust sales and thus arrange finances which has become the bane for the industry right now.
There are about 1.74 lakh homes that are completely stuck in the top seven cities of the country alone, according to property consultant ANAROCK and the government has set up an Alternate Investment Fund (AIF) to help builders in last-mile funding. Now the government needs to work efficiently in actually helping the builders to get funding and the builders on their part need to work sincerely to finish the project and salvage their reputation of the realty industry which is severely marred right now.
2 More Mergers and Acquisitions In Real Estate Industry
There will be much higher mergers and acquisitions in the real estate industry in the year 2020. This will be on account of two main reasons- There are lot of builders who are broke and the only way out for them is to merge or die; and the second reason is that now the buyers depend only on large established real estate players for parking their entire life savings and in such a scenario only big companies will be able to register sales.
About Rs 1 lakh crore out of the total loans of Rs 6.63 lakh crore given to real estate companies across the country is reportedly under severe stress, meaning there are little chances that they will be recovered. The firms that have taken these loans and are not in a position will have to find a way out and merging with a more financially sound company seems to be the only option for them.
Then a lot of tiny builders will be forced to join hands or merge with big brands as they may not be able to get customers. The recent statistics reveal that the top realty firms listed on the stock exchanges have been able to do well even in a lacklustre scenario. This is because buyers now-a-days prefer only established companies and can place their trust on them and the smaller companies will be forced to tie up with them in some form or the other.
3 Co-living, Co-working Segments Will Gain Further Ground
Sharing of real estate spaces, whether for commercial purposes or for residential, will become more pronounced in the year 2020. While there has been considerable traction in co-living and c-working segments in the country in the recent years, these two industries have just started to evolve at best in the Indian context. There are a lot of established real estate companies which have entered the co-living space in 2019 itself and will their cards discreetly in 2020 and reshape the industry. Similarly, the co-working industry will change the dynamics of the commercial real estate segment and become the mainstay of leasing activity in not just the metros but also in smaller towns.
4 Rise Of The Homebuyers
Homebuyers will emerge as a force to reckon with in 2020. If there was a lobby of the real estate companies in the country, there is now a lobby of the homebuyers which is exerting humougous pressure on the builders as well as the government. This new force is something that the builders will have to deal with and they will be forced to do justice to them. Builders cannot take buyers for granted anymore. This is because even the government is listening to them. One example of the might of the homebuyers is that the government had to set up a stress fund on the instance of the buyers. There are also several cases where local authorities are taking stern action on builders on the instance of the buyers and the society as a whole. Builders will have to make realistic promises and deliver they promise otherwise buyers will not feel shy of approaching the various avenues available to them to teach the builder a lesson.
5 RERA Authorities And Govt Wielding Stick Harder
There are clear signs that various RERA authorities are getting stricter and will take stronger action on the builders in the year 2020 if the builders flout rules. There have been loud voices that RERA authorities have been toothless and are not able to do anything against the builders when they do not abide by law. However, that is beginning to change and 2020 will see a much stronger role of RERA authorities in the functioning of the industry.
Even government is expected to come down heavily on the builders that do not follow rules or those who are not serious in delivering what they promise. Builders will find the going tough in 2020 if they want to bypass the law or get approvals without proper work or documentation.