5-Year Recap of Indian Real Estate Market
Real estate has been one of the largest industries in the nation that provides employment and investment opportunities. Since time immemorial, the real estate sector in India has been dominated by a large number of unorganized players.
The growth of this sector is influenced by the demand for urban as well as semi-urban residential projects. It is well-complemented by the growth of the corporate setting. Now, during the last 5-year period, a lot of changes have occurred on the Indian real estate front.
Overview of Indian Real Estate Industry
The Indian real estate sector has been witnessing a steady and high growth during the past five years, thanks to the rise in demand for residential and office spaces. The venture capital and private equity investment in this sector have reached USD 1.4 billion—an unprecedented level—during the last two years. Indian institutional investment in real estate in 2018 was the highest in a decade. Foreign direct investment equity inflows received by India is on the rise too. Real estate trends in India indicate that while affordable housing is predominantly in demand across the nation, luxury flats are also being consumed enthusiastically in the cities.
The Real Estate (Regulation and Development) Act, 2016 (RERA):
A major game-changer in the Indian real estate market has traditionally, made real estate transactions in India lack transparency, and in the absence of a regulatory body, developers were almost always favored, leaving buyers in the lurch frequently. All these were before the enactment of the Real Estate (Regulation and Development) Act, 2016 (RERA). This Act has transformed real estate transactions in India.
RERA has been enacted to bring transparency into real estate transactions and protect the interest of all the stakeholders in the real estate industry. It has extensively impacted real estate in India.
Governmental Support and Initiatives
Sensing the slack in the real estate market during the past few years, and its potential consequences on the nation’s economy, the Indian government, along with the state governments, has taken several initiatives in support of the industry.
A slew of policies and schemes have been announced to encourage the development of real estate in India. Plans such as the Smart City project, National Urban Housing Fund, and Pradhan Mantri Awas Yojana have been created to offer unlimited opportunities to the Indian real estate companies. Real estate trends in India have been indicative of the positive reaction to such schemes and plans.
Key changes in the real estate sector during the last five years and the contributing factors:
The entry of technology in the construction process has caused quite a lot of changes in the Indian real estate sector during the previous decade. The increasing use of technology in construction materials and practice has certainly changed the face of the real estate industry today. Technology is expected to be a crucial factor in the future of real estate in India. The following are a few of the key factors that have brought about a considerable change in the real estate sector during the past five years:
#1. Real Estate Regulation: The otherwise unorganized, unregulated real estate market has been rendered transparent and structured, thanks to the Real Estate (Regulation and Development) Act (RERA). Intended at achieving an organized market, this Act helps the industry to move in the right direction.
#2. Online Marketplace: With technology assisting almost every industry, and most of the modern consumers being tech-savvy, real estate in India has moved online. Exclusive real estate portals and convenient online interaction have ensured that property buyers go online for gathering information, choose their preferred property, and arrive at their purchase decision. The extensive use of smartphones and mobile apps is also attributed to the widely-used online marketplace.
#3. Home Automation: Home automation, the latest fad, is being widely adopted not just in residential properties, but commercial spaces as well. Now that the Internet of Things (IoT) is about to become a reality, home automation will no doubt proliferate further. This innovative technology allows users to control their home appliances remotely by using the Internet and digital devices.
#4. Private Equity in Real Estate: Private equity funds have relieved investors from the hassles of identifying the location and going through several steps to acquire a property for investment purposes. The fund manager’s expertise helps investors to make moderately safe investments in the real estate market.
#5. Affordable Housing: The constraining factor that usually deters the low-and middle-income groups from acquiring residential properties is the high price. The concept of affordable housing has come up with the view to enable these classes to own properties with reduced efforts. Today, the major demand in the residential real estate in India is for affordable housing. Real estate in India 2020 is expected to reflect this trend.
#6. Green Designs: Taking a cue from the global concern about protecting the environment, developers have realized the need for investing in green construction technologies and building methods. Stringent Government guidelines also help to ensure that steps are being taken to maintain the ecological balance of the modern world. The future of real estate in India will undoubtedly be more dependent on green designs and eco-friendly construction practices.
#7. Improved Construction Techniques: Faster and better construction techniques such as prefabrication and 3-D ensure that developers complete the construction activities under reduced time. Precise and fast construction leads to an increased number of projects being completed successfully. Real estate in India has been transforming, thanks to sophisticated approaches and techniques.
Major Influencing Factors in real estate trends in India in the Recent Years
In addition to the frequent changes that keep occurring in the real estate in India, the following factors have been instrumental in shaping the real estate market:
- Benami transactions Act
There have been several unprecedented changes and advancements in real estate in India during the recent past. Real estate in India 2020 is expected to be tech-driven, future-looking, and robust. Real estate developers will manage multiple projects across various cities while efficiently investing in centralized processes to offer the best they can.