BENGALURU: The real estate market in India will continue to witness strong growth backed by various policy reforms like Goods and Services Tax (GST), Real Estate Regulation and Development Act (RERA) and demonetisation, says a study by real estate services firm CBRE. According to the report titled Real Estate Market Outlook 2019-India, the segment will see an addition of almost 200 million square feet real estate space in 2019 across various categories.
“The current government’s pro-reform policies have yielded positive news for the equity market and investment inflows, thereby positioning India as an attractive business destination. The growth of the Indian real estate market in 2019 will be driven by numerous factors including technology, demand-supply dynamics, improved ease of doing business rankings and the dust settling post the implementation of reforms such as GST, RERA among others,” said Anshuman Magazine, chairman and CEO (India, South East Asia, Middle East & Africa), CBRE.
As per the CBRE office market outlook for 2019, the sector’s leasing activity will be driven by evolved sources of demand, rising interest of global occupiers, workplace changes due to digitisation of jobs, evolving need for flexibility, increased demand for domestic needs, rise in net absorption and Core Flex workplace strategies.
“The combination of these sources of demand, coupled with the supply influx of quality space, is likely to result in the share of net absorption to rise from the current 60-65 per cent to about 70-75 per cent during 2019-20. The share of tech in overall space take-up in the country will remain in the range of 30-35 per cent by the end of 2019,” the report said.
CBRE expects nearly 40 million square feet of new office space to be released over the next 12 months. Almost 30 per cent of this pipeline is expected to be in the SEZ space.
The residential market is absorbing the impact of 2017 policy reforms such as demonetisation, RERA and GST, and is on the path to recovery. This led to a growth of about 15 per cent YoY in new supply and 13 per cent in sales, it said.
Supply-demand scenario likely to improve
In 2019, the supply-demand scenario is expected to improve, unsold inventory levels to further decline, said the CBRE’s report. The affordable housing will drive supply and demand, backed by several government reforms, it said. The report said 2018 was a landmark year with office space absorption crossing an all-time high of 47 million square feet across the nine leading cities.