Status as on- 23/12/2019
The Real Estate Sector is witnessing a renewed breath of life with innovative strategies and policies being implanted in response to the change in the legal and economic climate of the country. The necessity to transform comes in the wake of fall- out of funding from financial institutions, stronger consumer oriented legal regulations under the RERA and the IBC which has resulted cautiousness towards residential projects and developers experimenting with the new sectors and offerings aimed at improving buyers sentiments and affordable middle income housing being given priority.
Technology has not only helped accelerate the construction process and increased construction quality, but it also plays a central role in consumer oriented services. There is a marked difference in the access of information, simplifying of buying and payment process within the last half of the decade, which has enabled consumers to make informed decisions in the real estate sector.
Virtual reality tours of the construction sites and projects, Apps such as OYO have expanded from hotels to housing rental segments of the Real Estate Sector which help save on brokerage and lock in periods for tenants, the potential establishment of block chain technology are also possible everyday reality of the future real estate sector in India.
With the passing of the Real Estate Regulatory Authority Act “RERA” Consumers now have online access to all past and present status of developers projects and our empowered to do their own due diligence research with respect to licenses and permits granted to a Real Estate Project from the comfort of their own homes. Technology is now also playing a vital role in terms of the remedial action taken against the builder through the Insolvency Bankruptcy Code “IBC” which ensures electronic voting and attending Committee of Creditor meeting online during the Corporate Insolvency Resolution Process “CIRP” of builders, the IBC even contemplates the initiation of the CIRP through an online complaint. Keeping a look out at this space for new laws, Court judgments and amendments in legislation that are routinely affecting consumers in the Real Estate Sector.
The Commercial Realty market in India has maintained robust double digit rental growth the entire year, with keen foreign capital investment and investment partnerships that back local developers being a big draw to core office and warehousing locations in cities like Bengaluru, Pune, Delhi, Mumbai.
2019 marked the year for the launch of the first Real Estate Investment Trust; Embassy Office Parks REIT which since its listing in the stock market in April has provided a 24 per cent return, which is reflective of sustained investment of global investors in Indian Commercial spaces.
The Central Government with an aim to give a boost to the Residential Real Estate Sector has passed schemes and polices aimed at developing real estate stress funds with a corpus of INR 25,000 Crore aimed at stalled and stuck middle income housing sector. The Prime Minister’s Office has also made recommendations to the RBI for one time roll over of builder’s loan to unburden NBFCS of stress assets and to boost the real estate sector.
Mid-range affordable housing has not only become a government priority with a number of government initiatives like the “Pradhan Mantri Awaas Yojana” but developers are also catching up to this trend by collaborating with the Government to cater to the needs of mid segment home buyers.
The Real Estate Market underwent a rough patch over the past few years, given the delay in construction, rapid and unchecked growth of high scale luxury projects that failed to provide expected returns, lack of regulations and Government oversight. The new trends of the Real Estate sector show a market that has learnt from its errors and is confident to make an increasing comeback with a focus of consumer welfare and diversification of market from a brick and mortar driven industry to a service driven product offering.
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