The real estate sector is one of the most globally recognised sectors. In India, real estate is the second largest employer after agriculture and is slated to grow at 30 per cent over the next decade. The real estate sector comprises four sub sectors – housing, retail, hospitality, and commercial.
India’s rank in the Global House Price Index has jumped 13 spots to reach the ninth position among 55 international markets, on the back of increasing prices in mainstream residential sector.
The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. It is also expected that this sector will incur more non-resident Indian (NRI) investments in both the short term and the long term.
The Indian real estate sector has witnessed high growth in recent times. Private equity investments in real estate are estimated to grow to US$ 100 billion by 2026 with tier 1 and 2 cities being the prime beneficiaries. The growing flow of FDI into Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards.
Housing sector is expected to contribute around 11 per cent to India’s GDP by 2020. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for India’s growing needs.
The Government of India along with the Governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies.
In order to support and augment the growth in this sector, the Parliament of India has passed some very important initiatives like the Goods & Services Tax, Benami Transaction Act, the Real Estate (Regulation and Development) Act, 2016 which establishes Real Estate Regulatory Authority (RERA) to protect home-buyers as well as help boost investments in the real estate industry. Real Estate companies as well as retail and institutional brokers have welcomed these moves and are working towards embracing significantly higher standards of transparency and accountability.