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A growth story since Independence
Policy level initiatives and advances in technology have buoyed up the demand and also attracted investments into the sector.
In the seven decades since India gained Independence, the country’s real estate market has changed tremendously. While the market has not always been consumer-friendly during this period, the winds of change are palpable, as reforms are rewiring the sector for good.
Many of the most important changes to positively impact home buyers in India so far have been at the policy level, while others have been induced by advances in technology.
Anuj Puri, Chairman, Anarock Property Consultants, says, “Housing loan interest rates have become extremely attractive and promise to become even more so in the future. RERA is clearing flyby-night operators from the market, leaving only credible and reliable players who are bound by law to adhere to their assurances on the market. The economy’s opening up with a plethora of new employment opportunities has, among other things, also led to the emergence of dual-income nuclear families with vastly enhanced home buying abilities. There is a wealth of property options available to home buyers today, which means that buyers are not limited to just a few developers and projects.”
The triple impact of demonetisation, RERA and now GST, have also brought dramatic changes in regulatory, tax and business environment in India. Surendra Hiranandani, Chairman & MD, House of Hiranandani, says, “In the backdrop of this ongoing transformation, the real estate is witnessing a robust rise in investment inflow from both foreign and domestic institutional investors.
As per syndicated reports, the Indian property market has received $3.15 billion from various investors in the first half of the current year. Increased consolidation and transparency along with the launch of REITs (Real Estate Investment Trusts) will act as the perfect catalyst for attracting more investments in the future.”
For a long time, India’s Independence did not have too many favourable connotations for aspiring home buyers. Their disadvantageous position had a lot to do with the fact that the real estate market was largely held hostage by developers. Today, this scenario has changed significantly. Over the past two years, we have seen the decisive return of consumer power on the market, with the arrival of the Real Estate Regulatory Act (RERA) providing the final edge.
Puri remarks, “RERA is finally putting buyers firmly in the driver seat. The Act is by far the most convincing manifestation of independence for home buyers in modern-day India, promising to eventually bring the residential property market on par with international standards of transparency and accountability to consumers. We are already seeing a return of home buyer interest on the back of this major policy reform, and there will be faster forward momentum going forward.”
However, there are quite a few areas of concern that need immediate redressal. Hiranandani points out that, “A major impediment to real estate development in India remains the approval process. We are ranked at 185 out of 187 countries by the World Band for Ease of obtaining Construction Permits. It means we are in the same club as war torn countries. Also, all land titles in India are presumptive and with the present pace of reform it will take 20 to 30 years to make land title insurance possible in India. This needs to be done on a priority basis if the government wants to ensure success of its housing policies.”
There’s the question of affordable housing for all, as well. India still has over 75 million homeless people and there is still a shortfall of about 19 million homes in the country.
Puri suggests that, “The fulfillment of Housing for All 2022 would depend on making land for affordable housing available where it is needed the most, positioning mass housing as a more attractive business proposition to developers and creating single-window clearances for such projects to ensure minimum delay. Ramping up infrastructure deployment in newly emerging areas where affordable housing can be created and offering further incentives for budget-strung first-time home buyers can go a long way in making this vision a reality.”