There is no doubt in the fact that whenever we speak off the top most globally recognized sectors then real estate sector is one of the most comparative sector which comes in that category. Moreover in India real estate is the second largest sector that insurance a massive amount of employment within itself and is expected to grow at 30% over the next decade.
Truth be told India’s rank in the Global House price index has junped 13* spots to reach the 9th position among 55 international market on the back of increasing prices in the mainstream residential sector.
How MASSIVE IS THE REAL ESTATE SECTOR?
Keeping in mind the exact facts and figures it is expected that the Indian real estate market will touch US$ 180 million by 2020, whereas housing sector alone is expected to contribute around more than 11% to India’s GDP by 20:20 which is comparatively quiet not this this but in the period FY2008-2020, the real estate sector size is expected to increase at a Compound Annual Growth rate of 11.2%.As far as the Private Equity as well as the Debt investments in India’s Real estate are concerned ,they grew 12% year-on-year to US$4.18 billion across 79 transactions in 2017. Moreover keeping the exact real estate graphs is mind,it can easily be said that India is expected to witness an upward rinse in the no. Of deals in Real Estate sector in 2018. And the fact that some of the policy changes and laws like RERA act which made this sector much more transparent is also responsible for it’s upward rise.
CHALLENGES for The Real Estate Sector in INDIA
One can hardly deny the fact that the Real Estate Industry I’m India will quite possibly face major challenges of regulatory pressure imposed by the government. Speaking about the laws of the Government, there has been some major implementation of laws and regulations by the government in the Real Estate Industry which has extraordinarily changed the shape of of this sector. For example the RERA Act of 2017 will now control the development of housing complexes. Moreover new projects faced many new projects faced certain restrictions where as the ongoing projects as well as deals are now bound to be delivered on time which ensures that the concept of punctuality is now taken white seriously.
Speaking about one of the major as well as most imperative pet projects for the Government is “HOUSING FOR ALL by 2022”. According to this program the government aims to deliver 10 million houses and provide each and every one a better way of life. Moreover out of 10 million houses, 95% of the houses are to be constructed for Economically Weaker Sections(EWS) and Low Income Groups(LIG). The fact that should be noted here is that because of the affordability of this segment and as the house value is low , the impact of slightest upward cost pressure is quite magnified and becomes a deal breaker too.
Not just this but lowering GST rates only for affordable housing projects to 12% with 50% abatement for land taking shall undoubtedly provide massive boost to the cause of housing for all by 2022