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The Future Of Indian Infrastructure And Housing Sector

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According to various industry reports, the positive outlook on residential building in India reflects the strong government support for the housing sector, as indicated by the allocation of sizeable funding for housing in the national 2021 Budget.

India’s construction industry has expanded significantly in the last few months to include both urban and rural development projects. Significant investments in infrastructure have been a major catalyst for this recent growth.

The development of buildings and townships has provided an impetus to the real estate sector with healthy signs of property appreciation. This also indicates that buying property remains one of the desirable investments. Naturally, the demand for housing projects is higher in locations with proper infrastructural support.

The numbers back up the post-COVID recovery that we are seeing in the sector. Foreign Direct Investment (FDI) in real estate attracted USD 235 million in the capital in Q3 2020, registering a 52% growth in investments over the previous quarter.

There are multiple factors that have aided this quick turnaround after the slump witnessed in the immediate aftermath of the pandemic.

One of the major factors is the improved transparency of processes that were otherwise seen as corrupt or murky. This includes governance of projects and auctioning for allocation of licensing for public resources. The emergence of top-tier private companies with professional and ethical standards coupled with other market mechanisms such as strict regulation of infrastructure funding platforms has further helped in boosting the sector in a very short time. 

More importantly, these developments show a conscious change in mindset towards higher professionalism and transparency that can help build a strong foundation for the sector. This cautious and risk-aware functioning will ensure that future development is on the bedrock of a strong foundation that can withstand any threat.

According to various industry reports, the positive outlook on residential building in India reflects the strong government support for the housing sector, as indicated by the allocation of sizeable funding for housing in the national 2021 Budget.

This includes ₹ 50,000 crore allocated to the Ministry of Housing and Urban Development (MoHUA) as well as the creation of USD 3.5 billion (about ₹ 25,300 crore) fund to support the completion of stalled housing projects. Additionally, government programs such as Pradhan Mantri Awas Yojana (PMAY) that aims to provide affordable housing to all urban poor by 2022 through financial support will continue to drive the growth in the sector. 

The recent National Monetization Pipeline will enable private players to enhance the operational capabilities of brownfield infrastructure assets, thereby encouraging privatization and assisting the establishment of an avenue for robust revenue growth while encouraging more public-oriented developments.

The setback to the sector in the initial days of the pandemic halted growth to quite an extent. Despite the fatigue, developers, industrial bodies, and the Government quickly pivoted towards encouraging continuous evolution. Be it reduced repo rates, stamp duty, or extensions of timelines, developers have been offered continued support from the industry. 

There is no dearth of housing demand in the country. We can expect this demand to stay positive, given the rate of urbanization & infrastructure enhancement.

This is supported by favorable socio-économique conditions and the overall rise in household income. A young demographic that will mature in the coming years ensures that the demand will continue its upward trajectory. However, it still requires sustained effort at every level, from the government to the private sector and individual buyers. 

There is a drastic change in how buyers are looking at real estate.

Millennials from various socio-economic backgrounds are looking for housing units to suit their needs. While some want affordable spaces, others are willing to pay a premium for luxury property.

Others may be looking for a getaway from the urban hustle. The housing sector is gearing up to meet these diverse requirements. With the festive season and high speed of vaccinations in the country, the housing sector is quite optimistic.

DISCLAIMER: The views expressed are solely of the author and RealtyNXT.com does not necessarily subscribe to it. RealtyNXT.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.

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