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Sam Ghosh Founder and SEBI Regd. Investment Adviser at Wisejay Private Limited Bangalore, Karnataka
Real Estate in India, part 1: Trends in Market and Regulations
1 answer/comment
03:29:54 PM, 12th April, 2019
  • Sam GhoshFounder and SEBI Regd. Investment Adviser at Wisejay Private LimitedBangalore, Karnataka

    REAL ESTATE INDUSTRY IN INDIA

    According to a survey by KPMG in association with Naredco and APREA, Indian Real Estate market size is expected to reach USD $1 trillion by 2030 from 120 billion in 2017. In the meantime Real Estate Investment also shoring. According to an IBEF report, FDI in the Indian Real Estate sector stood at US$ 38.92 billion from April 2000 to December 2018. According to a report by JLL, Institutional Investment in the sector in 2018 was estimated at $5.5 billion which is the highest in the last decade. A major push towards the growth of the sector is expected due to the Government of India’s Housing for All initiative which is expected to bring US$ 1.3 trillion investments in the residential sector.



    MARKET TRENDS

    1. Affordable Housing or Pradhan Mantri Awas Yojana

    The goal of this scheme is to provide housing for all Indians by 2022. Estimated 20 million houses to be built under this scheme. This scheme offers a “Credit-Linked Subsidy Scheme” or interest subsidy on purchase/ construction/ extension/ improvement of a house is provided to customers belonging to Economical Weaker Section (EWS)/Lower Income Group (LIG)/Middle Income Group (MIG).


    2. Student Housing

    Student housing is an emerging sub-sector in the Indian real estate Industry. Ficci report “Future of Indian Real Estate” mentions that according to 2011 census estimated 8 million students migrate for education and often face problems finding accommodation near their institution. Given the education sector is generally recession-proof, student housing assets can provide diversification to real estate portfolios.


    3. Co-Realty

    Another emerging sub-sector in the real estate industry is co-realty which comprises of co-living and co-working. According to estimates in an HDFC report, the co-working space addition by 2020 may reach 30 million sq.ft.



    REGULATORY TRENDS

    1. The Real Estate (Regulation and Development) Act, 2016

    This act was introduced to provide a structure and safeguard the interests of the home buyers in otherwise unregulated real estate industry. Under this act, each state needed to set up a Real Estate Regulatory Authority (RERA). Real estate developers and agents need to register with the respective RERA. This acts also provides guidance on approval of projects, collection and utilisation of funds, delay in completion of projects, valuation (based on carpet area) etc.




    2. Benami Transactions (Prohibition) Amended Act, 2016

    This amended act is the amendment of a 1988 act which was not operational. This act defines benami (anonymous) transactions in the real estate industry and targets to curb parking of black money in the real estate industry.





    Related Links:

    http://www.naredco.in/notification/pdfs/data_file-kpmg-1539770622.pdf

    https://www.jll.co.in/en/newsroom/institutional-investments-in-indias-real-estate-sector-highest-i

    http://www.pradhanmantriawasyojna.com/

    http://ficci.in/spdocument/23021/JLL-FICCI-Report.pdf

    http://www.hdfcrealty.com/pdf/Year%20Ender%202018-Quikr%20Realty%20Research.pdf

    http://up-rera.in/pdf/reraact.pdf

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