From the last 10 – 15 years, the Economy of India has experienced excellent growth that ushered in an age of liberalization and offered for better contributions from the private sector. Bringing in of the market for investment was helpful in encouraging mixed primary development across different sectors, in that way leading to accelerated consumption and sharp investment movement in the economy. This development has transferred to the real estate sector as well, which is a medium for development in a large number of secondary industries in the nation.
Real Estate is an important part of the economy and is accountable for an extensive part of its development investment, the advancement of the nation’s infrastructure stand & major originators of trade and industry activity. The real estate sector has strong connections with various industries such as tiles, paints, fittings & fixtures, cement & steel, etc.
Up and Down in the Real Estate
Real Estate of India has seen many up and down from 2004- 05. Following the government’s strategy to permit Foreign Direct Investment (FDI) in real estate, there was a positive sign in investment and construction activities. The real Estate Field not only observed the entry of many local and big names but also the invasion of many Real Estate Investment companies from foreign in addition to private equity funds, pension funds, and development companies come into the segment attracted by the excellent appreciation of investments.
This field touches the new summits in 2007 and the first quarter of 2008, portrayed by a growth in demand, extensive development, and greater than before investments from foreign. On the other hand, in the middle of 2008, the reactions of the worldwide economic crisis were marked here too, and Indian Real Estate took a back gear. The regular inflow of FDI was dropped into real estate extensively and what had appeared as one of the most capable markets for foreign investments faced a recession.
The housing Sector attracted Foreign Direct Investment in the financial year of 2007-08, 08-09 and 09-10 of 8.9%, 10.3%, and 11% respectively, of the total FDI in our country, on the other hand, 2010 – 11 saw just 6% FDI. After the darkness and recession of the global downturn, Indian Real Estate came back into the action in 2010 with the concentration on Affordable Housing, helped the sector to come over the critical situation it had experienced.
Without any doubt, the real estate sector holds very good potential to catch the attention of FDI in different fields. On the other hand, growth is achievable only with the mutual attempts of both the real estate and the Government. At one side, the industry should effort in the direction to better transparency, get all the necessary approvals, excellent quality of work and project execution at the same time as on the other hand the Government must offer economic incentives to builder to launch Affordable Residential Development for the needy people and also make some changes in the current guidelines of FDI for better dealing and development in realty field so as to increase the amount of FDI. 2014 has been very profitable for the Real Estate Investors, while the actual result of many of the strategies and alterations declared in this year will take effect only in 2015.
In the Union Budget of 2014-15, where the affordable residential project was well thought-out on par with infrastructure, to a relaxation of inflexibilities in the Land Acquisition and Real Estate Regulatory Bill, our new Prime Minister has been gifting the real estate constant pills of force.
Now the waves of changes are flowing more appreciably. Real estate buyers are back in operation almost in every city, inquiries have returned again, and Real Estate Developers are ready with the excellent supply that is suitable to the requirements.
2015 – 16 will unquestionably be an excellent year for the real estate on three counts:
1. The risk of economic slowdown has completely submerged, and positive signs are appearing in the industry. This will give confidence potential buyers planning to avail of home loans to as a final point take the plunge. As well, with the price of the properties staying constant and profitable deals being presented by builders with the aim of clear their inventory, fence-sitting investors are more confident to press the ‘buy’ switch.
2. Financial activity is a step by step growing, and the Central Bank expects GDP expansion to the level of 6.5 percent in the coming year. IT Sector has already announced more hiring of manpower to deal with a growing business. In a few words, rises in jobs will give rise in income, which sequentially is very encouraging both residential and commercial development.
3. Real Estate has experienced a re-orientation and developers are now mostly focusing on affordable projects. This will go far away, however undeniably not all the way, in bridging the current wide gap between demand and supply of affordable projects.