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February 14, 2020

Some major trends in Construction & Real Estate to watch out for in 2020

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2019 was a mellow year for the construction management sector in India. But in spite of that, as of today, with more than 50 million people actively engaged in the construction management sector, it is expected that by the end of the year 2020, the construction management and real estate sector will reach $215 billion, growing at a CAGR of 10.5 per cent. Also, with the increasing focus of the Government on building a nation with strong infrastructural capabilities – the real estate sector will act as catalyst for growth. But this will also lead to more competition and strict enforcement of laws and regulations by the Government.

With such drastic shifts, the construction management sector is sure to witness some major trends. Some of these trends to watch out for in 2020 include:

Increasing market consolidation: Given the past year that witnessed weak sales and insolvent firms - the outlook for future is debatable; hence, it is expected that larger firms will continue to thrive while smaller firms are expected to face survival issues. This will lead to larger firms acquiring or merging with smaller firms to expand. Moreover, branded players will strengthen due to customers banking on reliable names in times of uncertainty.

Rising environmental awareness: The construction management sector will need to be prepared to witness some heated environmental bans and laws – as environment concerns gain eminence. With rising pollution levels and depletion of resources, construction management needs to be prepared to embrace laws and modify functioning accordingly. Moreover, existing construction management projects need to reschedule delivery dates and reorganize resources.

Influx of Government funds: With the immense focus of the Government on building a nation with strong infrastructural capabilities – the real estate and facility management sector will act as catalyst for growth. As per the Development Agenda of the Government, 100 Smart Cities, 40 million dwelling units, 20 million affordable homes, better infrastructure, urban development and transformation, slum rehabilitation, as well as committed ‘Housing for All’ – needs to be accomplished by the end of year 2022. With strong aspirations for growth, the Government will invest more funds in the construction management sector, which will also tend to revive large projects delayed or stuck overtime.

TRENDS-IN-REAL-ESTATE-Infographic

Rise in housing sales: 2019 witnessed the trend of consumers opting for ready-to-move in houses or those nearing completion. And with the expectation of the alternative investment fund (AIF) of INR 25,000 Crores to help completion of stuck affordable and mid-segment projects – the sales of housing in the year 2020 are expected to experience an increase.

Increase in private investment: Given the initiatives of the Government kick starting in 2020, the second half of the year is also expected to witness some increase in investment from private players, especially big firms. Also, the influx of private funds is also hugely dependent on the performance of the economy in the first half of the year 2020.

Expected rise in REITs: The year 2020 is expected to witness a rise in commercial REITs; given the overwhelming response to the first REIT in India in 2019, the market is expected to react more positively towards this development in 2020.

Technology-fuelled growth: With the past year witnessing such dramatic growth in use of technology in the construction management sector, the coming year is expected to contribute sharply towards technological growth in the sector such as Big Data, Augmented and Virtual reality, Artificial Intelligence, Blockchain, Internet of Things, Building Automation, and Social Media.

With the onset of these trends, the construction management sector is expected to record a healthy growth in 2020. And if you wish to be part of this progressive sector with immense potential for growth, trust RICS School of Built Environment to lay strong foundations for your growth.

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