Evolution Of Indian Real Estate Industry

By Navin Dhanuka, MD and CEO, ArisUnitern Pvt Ltd.

The real estate industry is one of the most well-known on a global scale. The Indian real estate industry has evolved multifold since independence. The country has witnessed increasing demand for real estate for residential properties, commercial activities, etc. because of rising household income and increased urbanisation

Early Independence Days

India's real estate market has grown gradually over the past 75 years since india's independence. Cities have grown, and the real estate market has likewise expanded along with the increase in population and industry growth. A notable growth driver is the new technology and its adoption over time. The period between the years 1950 and 1960 is considered the period for new capital cities such as Chandigarh and Gandhinagar. Chandigarh was one of the first planned cities in post- independence India. Le Corbusier, a well-known French architect, designed Chandigarh, the ideal city that Jawahar Lal Nehru, the country's first prime minister, had envisioned. Architectural buildings located at the foothills of Shivalika, It is regarded as one of India's finest twentieth-century attempts in urban planning and modern architecture.It is regarded as one of the best experiments in urban planning and modern architecture carried out in India during the twentieth century.

1990s

In 1996, the Maharashtra Regional and Town Planning Act was passed. It was the first time a state in India passed a real estate law of this kind. This encouraged other countries to carry on this type of legislation because of the benefits it carried. Because housing is a basic necessity, the government gave real estate a big boost, despite it being an unorganized sector for a long time. The private housing sector evolved under many such initiatives like the Housing and Urban Development Company in 1970, the City and Industrial Development Corporation in 1971, and the National Housing Bank in 1988 to help the residential sector.

Liberalization of monetary policies in 1990 was the most significant phase for reforms in the real estate sector. This allowed a large number of multinational companies to enter India. The entry of these companies created a huge demand for housing complexes and commercial spaces leading to an increased demand for skyscrapers. Many big cities Mumbai, Delhi, Kolkata,   Bangalore etc started adopting high technological advancements from architects all over the globe.

2000s

The 1990s was perhaps the most critical phase for India’s development. Large and fiscal imbalances that are coupled with difficult monetary policies created a serious problem in the economy however the government managed to liberalize these monetary policies making it easier to expand its business worldwide. Funding for real estate projects was made easier by allowing Foreign Direct Investment in 2005 paving the way for foreign developers to enter Indian land. Even the concept of malls in India was started by Spencer Plaza in 2002 which was followed by Ansal Plaza in Delhi.

Real Estate Investment Trust (REIT) was introduced in 2014 to support investors with limited budgets. After that, the Real Estate Regulation Act (RERA) came into force in 2017, this brought a transformation and empowered the home buyers to invest safely in property. In recent times, the government of India introduced the Pradhan Mantri Awas Yojna to provide basic accommodation to every Indian by 2022. Through the Union Budget 2019, the government has announced an additional deduction of upto Rs.1.5 lakhs for interest paid on loans borrowed upto 31st march 2020 for purchase of house which is valued upto Rs.45 lakhs.

Conclusion

In addition to the recent pandemic, the Central and State government proposed various tax reliefs to encourage more and more people to invest in real estate.Due to rapid urbanization, the need for housing has seen a surge in the real estate industry. So,the real estate sector in India is growing very fast and has a huge scope in future.

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