It's Amrit Kaal for Indian real estate

Hyderabad: India stands on the threshold of Amrit Kaal or the 'Era of Elixir' –Nirmala Seetharaman, Union Finance Minister.

Ever since India attained independence 75 years ago, the country's real estate sector has been making remarkable progress. This once hugely beleaguered sector has made history-defying forward strides, especially in the last 8-10 years. Today, massive transformation across sectors and industries has assured India a recognisable position in the new world order.

The real estate sector features prominently in this revitalised avatar of a country on the move. As the population grew over time, cities expanded to create habitable localities and industries for its economic upliftment. The liberalisation of policies in the 1990s facilitated significant changes in this sector. Many international companies jostled to establish businesses in India, triggering huge demand for real estate.

Currently, the sector is witnessing the winds of change as the Central and State governments are on putting multiple efforts to address the ever-increasing need for housing. The rapid growth of the IT-ITeS sector resulted in the expansion of new urban centres across major cities like Bengaluru, Chennai, Hyderabad, Kolkata, MMR, NCR, and Pune. These cities were the first to see rapid vertical development.

"At the turn of the century, the sector was further invigorated when foreign direct investments allowed the entry of global investors. This catalysed the development of malls and other organised retail spaces across the country," says Anuj Puri, Chairman of Anarock Group, analysing various government schemes like Pradhan Mantri Awas Yojana and Credit Linked Subsidy Scheme to support this sector.

He further adds that Smart Cities Mission, aimed at developing 100 cities across the country, has enabled to drive economic growth and offer significantly improved quality of life to citizens. Currently, there are 5,151 projects under this mission across the identified cities, with investments to the tune of over Rs 2.05 lakh crore.

"Various reforms and structural changes implemented by the government have been instrumental in altering the real estate sector. As a result, many corporate business houses have ventured into the sector. Prominent and listed developers are successfully gaining market share and helping the industry consolidate - a much-needed process that steadily eliminates unwholesome elements," Puri opines.

Goods and Services Tax (GST), Real Estate Investment Trusts (REITs) and Real Estate Regulation Act (RERA) are some of the significant reforms in recent times. REITS have emerged as another option for the investors to add real estate to their portfolios for better diversification and risk mitigation. The REITs are mainly in the commercial office segment, with a total market cap estimated at Rs 60,584 crore.

Perhaps, RERA is the most significant post-independence reform to impact the real estate sector. This Act aims to safeguard the interests of homebuyers and investors and make developers accountable for their projects. The Act makes all relevant project details, including the approvals and permissions, available at homebuyers' fingertips and provides a mechanism for redressing complaints and grievances.

RERA establishes specific standards for the construction and development of real estate that aim to improve transparency in real estate transactions. It has given homebuyers several rights and has set forth specific laws and regulations that all developers must observe. In the five years of its existence, 87,124 projects and 65,500 agents have been registered across the country.

The regulator has successfully disposed of 97,404 complaints, paving the way for a stronger and more resilient real estate sector. RERA is in many ways still a work-in-progress, with loopholes and lacunae getting addressed along the way. However, it is safe to say that it is the one regulatory reform that has genuinely empowered real estate end-users and investors.

As the nation progresses rapidly and requirements evolve, real estate products, services, and assets will grow too. Many new-age real estate asset classes such as senior living and student housing are already gaining momentum. Data centres, warehousing, and industrial parks are the new buzzwords in this sector. They will gain further traction as India is all set to become a $5-trillion economy.