An increase in real estate activity due to low mortgage rates may attract investors.
Institutional investment in the Indian real estate market is expected to increase by 61 percent to US$6.8 billion by 2024, but raising funds for this investment may be quite challenging in the year 2025. Real estate consultant Vestian said this on Wednesday. According to Vestian, attracting funds may be challenging in 2025 due to global uncertainties. According to PTI news, real estate consultant Vestian said in a statement that institutional investment in 2023 stood at US $ 4.3 billion.
Recession and inflation will become major reasons in the global economy
According to the news, Vestian CEO Srinivas Rao said that despite a slow start, the real estate sector received significant institutional investment in 2024, surpassing pre-pandemic levels. However, Rao said that 2025 is expected to be challenging due to increasing geopolitical friction, slowdown in the global economy and high levels of inflation. Of the total institutional investments, the residential sector reported investments of US$2 billion, accounting for 30 percent.
Foreign investors made 54 percent of the total investment
Investment in the housing sector in the year 2024 increased by 171 percent as compared to the previous year. Commercial property, including office, retail, co-working and hospitality projects, gained 35 per cent of total institutional investment, while industrial and warehousing parks gained 28 per cent. Foreign investors put in 54 percent of the total investment, while domestic funds put in 30 percent and the remaining 16 percent was co-investment.
Can get a boost if repo rate is reduced
Interestingly, co-investments accelerated in 2024 as foreign investors relied on the local expertise of domestic investors amid the current macroeconomic uncertainty. Rao said that if RBI reduces the repo rate in 2025, then institutional investment in Indian real estate could get a boost. He said an increase in real estate activity due to low mortgage rates could attract investors. US-based Vestian is one of the leading real estate consultants globally. Vestian has offices in the US, India, China, UK, Sri Lanka and the Middle East.
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