The current position of real estate sector in India

The real estate business has not been recession proof. Its growth has considerably been affected by this economic uncertainty. The global financial meltdown has brought about liquidity crunch for real estate developers and investors. We can say that there has been an overall slowdown in demand across India due to the fall in the stock market. This has compelled builders to reduce the prices of their projects so as to bring back to the normal trend.
But currently the Indian real estate sector is going through revival phase and is estimated to be US$ 16 billion with a CAGR of 30%.In the year 2008 the developers have deferred the supply of mall space .But with the revival of retail industry about 100 new malls spread over 30 million square feet is expected to come up for the year 2009-2010. Additionally 31,846,504-sq ft of mall space will be created across India. As per a report of June 2009, the world’s largest franchising network called RE/MAX has entered into India. It has selected Chennai as its first city with Ahmedabad being the second one. It is basically planning to introduce its concept and working pattern in India so as to bring about professionalism in this unorganised but compelling market.
Also the largest global investment fund dedicated to the Indian real estate sector called IREO has planned to develop 13 real estate projects in prime locations of the country. The real estate sector is also active in the establishment of SEZs and is spreading to the smaller cities and underpinning their growth.
The prime driver for change in Indian real estate sector has been the introduction of such policies by the government which reduced the barrier on foreign direct investment (FDI). Moreover, the market is also opening up as the viable investment option for the NRIs who are planning to return back to India. Thus we can say that though Indian real estate sector has seen erosion due to recession, it continues to revive itself through consistent efforts.

REAL ESTATE SECTOR IN INDIA

The real estate sector is getting more and more organised with time. Few years back this sector was dominated mainly by small time players which were characterised by lack of organization. Most of the real estate development was undertaken by state government housing and infrastructure boards. But in recent years real estate has been opened to private players as well. This has caused the influx of big players who in turn have managed to mop up a considerable say in the sector.
Real estate is the largest class asset in the world and thus its objective should be to provide affordable housing. The increased transparency of the sector can lead to increased probability of foreign investment in the sector. These investors expect an annual yield of about 9 to 11 percent on their investment. This increased investment would act as a catalyst to the real estate sector and the development of the economy as a whole.
When we talk about Indian real estate sector we can say that it is relatively unorganised. Unlike real estate in most western nations such as US, UK, Australia, New Zealand etc., India lacks regulations and mandates for the sector and as such real estate transactions in the country are haphazard at best. As the investment in a property is a life time investment, it should be planned and structured. For this there is a need for developing a regulatory body at national, state as well as district level which can make laws for protecting the interests of the people (investors). This would definitely help in reaping the benefits of organised real estate sector. Demand for corporate space being more than supply, is more than an incentive for the sector in India to evolve. The future holds the best and the arrival of international players as well as organized domestic pioneers is all the adrenaline the sector needs.