India ranks as the Second Highest populous country in the world, contributing to an astounding 17.7% of the Total World Population. Population plays a key role in driving the economy. The real estate industry alone contributes to 6-7% of the GDP. In light of World Population Day on July 11, let us discuss the impact of population on the real estate market in India.
For those who are debating about investing in apartments in Chennai, this article should tell you why you should invest without delay.
The demand for housing is relatively high in India compared to other countries, especially those in Europe. 35% of India’s population is urban, which comes to approximately 483,098,640 people in 2020. Real estate experts expect to have at least 50 million homes by 2025 to house them.
Let us look at theoretical projections and information that show positive signs for the real estate market.
- India has a population growth of at least 1% every year. This is quite high compared to countries in Europe that are facing negative population growth, which indirectly affects their real estate industry. They are unable even to fill their existing inventory, let alone build new homes.
- There is a high influx of immigrant population into metropolitan cities like Chennai, Bengaluru, Hyderabad, Mumbai, and NCR. Every year, over 100,000 people move in and out of these cities and their suburbs.
- The average income of an Indian Household has improved considerably over the years. People have more money on their hands to invest and can afford more luxuries. This should translate into more people investing in real estate, especially in apartments in Chennai, as this city has the most influx of affluent people.
- Apart from the first-time home buyers, there are others who live in neighbouring towns and villages, investing in homes in the city. They either rent it out or buy it as an asset for their children who have moved to the city.
- The real estate sector in India is estimated to reach 13% of GDP by 2030. The population will also grow to nearly 1.5 Billion, the effect of which can be felt on the property prices. About 17% of this population would be in the demographic that is capable of purchasing a property.
These 5 takeaways from the population to real estate relationship make it seem like the market must be practically booming. However, one in three houses still stands unsold. The Coronavirus pandemic was also one of the significant factors that put a hold on people’s investment plans. The lockdown forced a lot of people out of their jobs and wages, leading to their savings being used to weather the pandemic. Those who could still afford to buy new homes became more cautious about where they were investing their money.
Developers and brokers are doing their best to combat this by attracting customers with lucrative offers. The Central and State Governments, along with the national banks, are stepping up to increase people’s affordability by introducing various schemes, tax benefits, and relaxations on home loans.
This resulted in a revival of the real estate industry, but right now, it is entirely a buyer’s market. The property rates are at the lowest ever, and with the growing population, it is inevitable that the demand will bounce back sooner rather than later. Anyone investing in real estate, especially in luxury flats in Chennai now, will definitely see both short-term gains and profitable appreciation in the long run.
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