Real estate includes land and any tangible structures that are permanently attached to it, such as buildings, houses, apartments, and other types of properties. As well as having a connection to the land, it also encompasses rights to the air, minerals, and water. Real estate is the largest industry in the country and is crucial to the development of the banking, construction, and property management industries.
As per the real estate market analysis, growth in urbanization and population drives the commercial and industrial sector, which in turn is expected to propel the demand for market in the coming years. Currently, by business, the sales segment has garnered significant market share in order to boom the real estate market size, owing to the expansion of the infrastructure sector in developing regions. The real estate market growth is due to the growth in demand for various properties such as residential, commercial, and industrial. Moreover, government initiatives to open the sector for foreign direct investment boost the market growth. For example, in 2020, Government of India approved 100% foreign direct investment in the construction development sector.
Public-private partnerships are defined as a partnership between the government and businesses from the private sector for the development of public infrastructure systems. In this kind of partnership, the government provides technical and operational support while a private entity manages the project. Therefore, the expansion of public-private partnerships in several nations, including China and India, would keep the real estate market growing. To provide cheap housing and entice commercial developers, the Indian government, for instance, has created a new strategy on public-private partnerships for 2020. In a similar vein, China has embraced the public-private partnership model, in which private businesses will finance public infrastructure initiatives.
COVID-19 is a disease caused by a newly discovered virus named Coronavirus. Many people are suffering from coronavirus disease throughout the globe. Various major players holding the real estate market share had to stop their business production due to lockdown implemented in countries such as the U.S., China, Brazil, and others.
After the Brexit referendum, many European businesses curtailed their new investments in the UK. British international trade has decreased as a result of the Brexit's introduction of uncertainty into the country's future trade policies. Over the next 15 years, the UK's economy is projected to increase by less than 5%. The pressure from the high level of uncertainty over the future of the UK's trading relationship with the European Union also caused a fall in property market revenue. Therefore, it is predicted that Brexit will limit market expansion during the real estate market forecast period.
furthermore, Up until 2019, Latin America struggled owing to its challenging external environment, and the majority of the region's nations also experienced challenging internal issues. While other nations in the region, including Argentina, Colombia, and Chile, have seen currency depreciation, Venezuela and Brazil have seen severe recession. Because of the political unrest, the economy is unstable in many parts of Latin America. Furthermore, the region's economic growth is hampered by issues including inadequate transportation and logistics infrastructure, non-tariff barriers for the transfer of goods and services across borders, and low foreign direct investment, which in turn limits the expansion of the Latin American real estate market.
The government is undertaking numerous steps to improve the infrastructure. One of the main forces is economic expansion. The need for construction equipment in infrastructure projects across multiple sectors has increased as a result of large-scale foreign investments made as a result of the expanding economies of nations like India, Indonesia, and others. For instance, India projected investing US$1,39 trillion in infrastructure development projects during the following five years in December 2019. Similar to this, the Russian government committed around $96 billion in April 2019 for its 6-year plan to modernize infrastructure development, which covers roads, trains, ports, airports, and other infrastructure. For the market's expansion, this is anticipated to offer attractive potential opportunities.
This stagnancy in business activities has directly impacted the sales in the real estate industry. For instance, Alstom SA registered a decline of 17.7% in revenue in September 2020. Moreover, lack of manpower and raw material has halted the supply chain process. In addition, different real estate market trends in different developing and developed regions drives the growth of the market during the forecast period.