At present, the real estate sector in India is growing quite well — owing to efficient skill development and construction methodologies.
It’s a well- known fact that the real estate sector in India suffered the most after 1947 India-Pakistan partition, as many people became homeless, inducing the necessity to provide homes for everyone.
Yet, post-independence, India grew gradually due to urban agglomeration, new technologies and increased investments. However, this hasn’t been an easy journey and it would be important to highlight and recall some prominent moments of real estate sector since 1947.
Where Lahore formed a part of Pakistan, new capital cities such as Chandigarh, Gandhinagar, emerged as successful examples in India, as per Mr. Jayesh Dave, Managing Director of Jayraj Builders.
- Chandigarh was the one of the 1st planned cities in post-independent India. Known for its urban planning and architecture layout, this city designed by Le Corbusier presented an opportunity of growing gradually without disturbing the environment.
- In the decade following it, The Maharashtra Regional and Town Planning Act was passed. It was for the first time that an Indian state had passed such a law– a wave of change, where other Indian states could also come up with such laws.
- Housing sector in India has also been given enough attention, owing to the central government established institutions like the Housing and Urban Development Company in 1970, City & Industrial Development Corporation in 1971 and the National Housing Bank in 1988.
- The year 1990 was perhaps the most critical time for India since the independence. Large and growing fiscal imbalances coupled with difficult monetary policies, created a serious looming economic crisis in the nation. The then government liberalized the monetary policies, thereby facilitating an option for the multi-national companies to enter India, which ultimately led to an increase in the skyscrapers.
NRIs’ investment coupled with foreign capital in the early 1990s led to immense growth in the real estate sector, with cities experiencing exponential growth. The solution to overcrowding was realized through high rise buildings as they could accommodate more people with limited built-up space.
- Now came the phase of IT companies in Bengaluru and Hyderabad in India — thanks to Y2K bug, through which India left its imprint on the entire world.
- In 2005, India allowed FDI for the 1st time, opening newer ways of funding. It has been liberalized in the recent times, indirectly contributing to the entry of foreign developers.
- From early 2000, mall concept was fully spread throughout the country. Indians were first introduced to the organized-retail concept through the country’s first mall, Spencer Plaza in Chennai, followed by Ansal Plaza in Delhi.
- Year 2006 saw the Indian government sanctioning modernization of its brownfield airport, such as Mumbai, New Delhi along with Greenfield airports like Bengaluru via the public-private partnership model. This led to high increase in the real estate development around the airports.
- To promote small investors, The Real Estate Investment Trusts (REITs) were also introduced in 2014, where investors with limited budget can also make safe investments.
- One of the biggest acts of the recent times in the real estate sector came in the year 2017, when on May 1st, the government passed the Real Estate (Regulation and Development) Act, known as RERA. This act has brought a transformation and empowerment to the home buyers.
Jayesh Dave, Chairman of Jayraj Builders said, besides this, with ongoing schemes like Pradhan Mantri Awas Yojana, the government has pushed for basic accommodation to every Indian by 2022. Through the Union Budget 2019, Government has also made an announcement for the additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakh. Additionally, even financial institutions like RBI have made cut rate policy, which can only strengthen the dream of consumers looking to buy a house.
With rapid urbanization, comes a greater need for the housing. Thus, there is a huge scope for the real estate sector in India. That said, with the effects of climate change, it would be important to use sustainable and eco-friendly material in construction, without a compromise on the quality, added Mr. Jayesh Dave.
Hence, future real estate industry could be different and bring new reforms in the housing sector. With right architecture and government incentivisation, we can achieve greater heights in infrastructure-based development.