What is Real Estate??…….

Land plus any additional physical improvement that may be built on or placed on it is technically defined as real estate, sometimes known as “real property.” Whether or not the owner intends to use the property, real estate is frequently purchased as an investment in places where land and building costs are growing. The government’s initiatives and interventions, done through sector-specific laws and altering older ones to better suit the changing economic environment, often determine how a given industry shapes up. While the government plays a vital role, market conditions, geopolitical events, population changes, and the passage of time all play a role in the evolution of industrial sectors, particularly in developing economies like India. Thereal estate is a large market in India, government have been working to increase transparency in the sector through rules and technology. India has seen various initiatives in recent years, although certain milestones have been spaced out over decades. It is worth remembering the anniversaries  that have had a long-term impact on the real estate industry.

Reforms and Rise of Real Estate sector in India…….

India has a rich heritage in the field of construction but many of the structures were destroyed by invaders specially after the loot and destruction by the Britishers, Arab and Afghans. In the midst of this the real estate sector suffered the most as many people became homeless during the partition and recovery took a long period to overcome from the
wound.
In 1952 and 1960, the new capital cities of Chandigarh and Gandhinagar were established.
These were the country’s first few opportunities to plan wholly new cities.
The Maharashtra Regional and Town Planning Act was passed in 1966, a decade later. It was
the first time such a real estate law had been passed in an Indian state. It provided a
tremendous impetus for governments in other countries to draught similar legislation.
Considering housing to be a basic necessity, the government gave the real estate housing
industry a big boost, despite being an unorganised sector for a long time. The central
government established the Housing and Urban Development Company in 1970, the City &
Industrial Development Corporation in 1971, and the National Housing Bank in 1988 to help
the residential sector.

Liberalization era in 1990’s………

Liberalization of monetary policies in 1990 was the most significant phase for reforms in
real Estate sector. This allowed large number of multinational companies to enter India.
Their entry generated huge demand for housing complexes and commercial spaces. This
led an increase demand for skyscrapers. All big cities like Mumbai, Delhi, Kolkata, Chennai
etc. large numbers of skyscrapers started coming up with high technological input from
architects across the globe.
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. However, the then government managed to
liberalize the monetary policies. This opened up the avenue for the multi- national
companies to enter India, which ultimately led to an increase in the skyscrapers. NRI’s
investment and foreign capital in the early 1990’s led to immense growth in the real estate
sector, with cities experiencing exponential growth.
Real Estate sector got a further boost with influx of IT Companies in cities such as Bangaluru
and Hyderabad and subsequently IT Industry spread to other parts of the country such as
Kolkata where entire area –sector 5 in Salt Lake was dedicated for IT Companies, Gurugram,
Noida, Vasi in Mumbai, Pune, Chennai and many more. The impact of IT and ITES
development in India had a major impact since the time of Y2K bug, through which India
left its imprint on the entire world.

The Twenty first century………

Funding for real Estate projects were made easier by allowing Foreign Direct Investment in
2005 made it possible for the entry of foreign developers. The mall concept in India was
started by Spencer Plaza in Chennai started in 2000 and 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 publicprivate partnership model. This led to high increase in the real estate development around
the airports.
Real Estate Investment trust (REIT) was introduced in 2014 to support investors with limited
budget. Real Estate Regulation Act (RERA Act) came into force in 2017. This act has brought
a transformation and empowerment to the home buyers as well.
Government announced Pradhan Mantri Awas Yojna to provide basis accommodation to
every Indian by 2022. Through Union Budget 2019, the Government has announced
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 lakhs. With rapid urbanization, comes
a greater need for the housing. So, the real estate sector in India has very huge scope in
future. The present situation caused due to COVID-19 will have some adverse effect in the
growth of Real Estate Sector but recovery shall bring all progresses in line with government
plans.

The Adoption of Technology…………

In the past, home buyers were dependent on brokers and newspaper adverts to find their
dream home. But, the pandemic more so than ever has acted as a catalyst for the
digitalization of the real estate sector by instilling a sense of urgency in the industry to more
broadly use technology.
Developers are increasingly embracing next-generation tools such as mobile applications
and online purchase platforms that serve as a one-stop solution for getting information on
their credentials, offerings, price, configuration, and other relevant aspects of their
products. Emerging technologies like virtual reality and augmented reality are being
utilized to demonstrate their premium offerings and to excite the actual feeling of being at
the project site.

Implementation of RERA Act………

In Maharashtra, homeowners were protected by the Maharashtra Ownership Flats Act
(MOFA) of 1963 before RERA came into effect. MOFA, just like the Real Estate (Regulation
and Development) Act 2016 aims at protecting the interest of flat purchasers by bringing in
transparency and discipline in transactions of flats by putting a check on malpractices.
RERA has brought back the trust of homebuyers in the market by consolidating the sector
and plucking out unscrupulous players. Under RERA action is taken even in cases of defects
in workmanship, quality, provision of services, or any other obligation that was made at the
time of agreement for sale along with structural defects. In short, by offering homebuyers a
coherent redressal system, RERA ensures that builders are held accountable for all their
promises and offers which other existing laws failed to address transparently.

REITs As a Form of Investment Vehicle…………

Real Estate Investment Trust (REIT) was introduced in 2014 to support investors with
limited budgets. Investments in REITs are made by pooling money together to invest in a
collection of properties.
In the same way that mutual funds work, REITs enable investors to invest in commercial
real estate portfolios that generate income from properties like apartments, hospitals,
office buildings, timberland, warehouses, hotels, and shopping malls.
REITs have become the talk of the town because of their ability to generate higher returns
than equity markets over the long term. Several positive points have been identified for
REITs, including mandatory valuations, regular updates, research coverage, and
disclosures.

Introduction of GST…….…

GST is a major step towards financial transparency, which can be seen as emancipation
from the prior convoluted and opaque taxation scheme. Having a greater certainty about
how much the total cost of purchasing a home has allowed consumers to relax as the GST
tax combines the majority of previous taxes into one.

Conclusion…….…

The recent pandemicevolved real estate sector more than any sector. 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. The real estate sector in India is growing very fast and has a huge scope in
future.