The Indian real estate sector is one of the biggest markets in the world. From past few years, the said sector has gone through a lot of transformation. The technological advancement and the contemporary way of conducting the business which is adopted massively by Indian realtors have brought monumental changes in the real estate market.
The second largest employer in India, the Indian real estate sector is expected to grow exponentially in the upcoming years. It is the sector which lays direct impact on the economic growth of the country.
There are various factors that influence the Indian real estate sector and its development. To make the things more clear, let’s roll back a decade ago and have a look at various aspects of the Indian realty sector.
In the last decade, it was noticed that the Indian real estate sector was not performing well. The number of unsold inventory increased and sales decreased, resulting in the liquidity crunch that made developers fall from heights and trickled down the new launches.
The Indian realty market in 2007 was estimated at Rs. 5,88,000 crore, which is really good, but adversely, out of Rs. 5,88,000 crore, the unorganized market was worth Rs 5,83,000 crore and the organized market was Rs. 5.000 crore only. This led to the increase of unregulated business practice and a surge in fly-by-night realtors. Due to this, the organized real estate sector faced stiff competition from the unorganized sector.
During the initial days in the year 2000, the demand for real estate projects increased drastically and gave developers a chance to flourish. Unfortunately, many developers made hasty decisions which led to unplanned launches, liquidity crunch and delay in possession which finally tarnished the reputation of developers. This also led to a shortage in the quality real estate projects in India.
The home buyer’s attitude is influenced by many things, including realtor’s marketing factors, on-time completion of the project, providing promised amenities, social variations and much more. In those days due to multiple family responsibilities, most of the potential home buyers were aged between 50-60 years thus the investment from young buyers was less. Also, the lack of professionalism was seen in the real estate sector due to which a negative attitude was seen from the buyers’ side. This further led to conflicts and decreased the trust level of buyers on realtors.
The Indian government permitted Foreign Direct Investment (FDI) in 2005 for the Indian real estate sector. According to DIPP, total FDI inflow in the real estate sector during April 2000 to September 2015 has been around US$ 24.16 billion, which is about 9% of total FDI inflows from April 2000 to September 2015 but due to less liberalization, the FDI graph declined steeply.
The real estate sector was considered as ancestral business. If a person is in real estate business, his successors will do the same business and were given professional knowledge based on the traditional rules. If anyone tried to practice the western way of doing business had to face a setback due to lack of adequate business reforms and sources.
Well, these were the talks of the past, now coming to present the scenario of the real estate sector in India is quite different. Considering the below points it can be easily figured out that the modern Indian real sector is growing drastically and the professionalism & transparency are surging.
For the CY 2016-17, the economic growth of India is being projected at around 7.6% after a revival in 2016. The leading factor behind the improvement of economic growth is the cuts in the interest rates by RBI. To bring back the trust in the buyers, the developers are coming up with attractive offers and discounts due to which the sales of the real estate project are increasing.
The technological advancement had provided smartphones in every hand due to which realtors can easily do business in the virtual world along with the real world. Within five years, the use of social media has increased drastically along with the e-commerce.
Now, the realtors had realized how the internet helps them to reach potential buyers and the consumers find it easier to virtually explore various options before checking the physical property. Other advancements in technology such as virtual tour of properties, 360o view photographs real estate aggregator platform and informatory platforms like apnarera.com are making the real estate sector more transparent and reliable.
Additionally, e-auctions platforms are initiating a new era of buying and selling properties and the Omni channel business modules developed using the technology is shaping the real estate sector of Indian for the upcoming future.
In the past, the real estate business was ancestrally inherited, but now the youths who don’t have a real estate background are doing real estate business on the basis of their educational qualifications. This surge in fresh minds is changing the way of doing real estate business and is taking the Indian realty sector to new heights.
From past few years, the Indian government has tightened its belt to develop and make the Indian real estate sector reliable and transparent. The government is following the path of development and thus had made various reforms that will help the Indian realty market grow. Initiatives by the Indian government like Benami Act (recovery of Benami properties), development of smart cities, AMRUT, The Real Estate (Regulation and Development) Act , 2016 (RERA), Pradhan Mantri Awas Yojana (PMAY) and introduction of subsidy slabs for new home buyers are adding to the development of the sector. Due to these reforms, the realtors have gained the trust of buyers and the number of potential buyers under the age of 23-35 years has increased.
However, the RERA is the most important legislation that will change the way of doing real estate business. State wise RERA rules will be implemented soon which bring accountability and efficiency in the sector due to which the fly-by-night realtors who tarnish the image of the sector will vanish. After the implementation of this Act, the consumers will be heard and the good developers will flourish. This Act will bridge the gap between realtors & buyers and will build trust between them.
These points clearly indicated that the development is at its peak and soon it will result in the improvement of the sector, giving a boost to investments and economic growth of the country.
The Real Estate (Regulation & Development Act) popularly known as RERA came into effect on 1st May 2016 after the government of India sought to promote discipline and transparency in the real estate sector of the country.
The government of Uttar Pradesh has notified the UP Real Estate (Regulation & Development) Act (RERA) on 29 October 2016. Counting to regulate the real estate sector in the state
We all have heard a proverb “Tit for Tat” but it seems that this is not true when it comes to the RERA.