The Indian infrastructure (construction) and real estate industry is playing key role in the nation’s progress towards achieving the status of ‘developed nation’ from a ‘developing nation’. However, there is a consensus that infrastructure inadequacies would constitute a significant constraint in realizing our growth potential.
An ambitious program of infrastructure investment has therefore been evolved for strengthening and consolidating recent infrastructure and real estate related initiatives. To supplement the estimates of Gross Capital Formation in infrastructure, the Planning Commission has made projections of public-private investments in each sector, basing these on a detailed review of sectoral trends and projected expenditures.
The Indian real estate sector plays a significant role in the country’s economy, which is second only to agriculture in terms of employment generation and contributes heavily towards the gross domestic product (GDP). About five per cent of the country’s GDP is contributed to by the housing sector.
Almost 80 per cent of real estate developed in India is residential space, the rest comprising offices, shopping malls, hotels, and hospitals. According to the Tenth Five-Year-Plan, there was a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to 90 million housing dwelling units will have to be constructed, with a majority of them catering to middle- and lower-income groups.
Easing the entire cumbersome process of buying or renting a property nowadays, the concept of the development of various online portals for the same has been in recent fashion.
Earlier it was strenuous to search for brokers and agents to rent or buy a home, visit the properties physically, clinching on to the owners for cheaper rents and prices, but now all of these problems have a single solution.
The real estate websites have been an advantage as they provide easy online revival of properties; have unique filters that help the customers to select their preferences and view properties that please them. Accurate pricing, location, amenities, land area, etc provided by these best property sites have made them a recent hit amongst the public.
Apart from all this, these portals have reduced the laborious process of finding and communicating to the owners and agents, a task worth a few clicks
- 99 Acres
99 acres is an online portal which has been a premier choice of the real estate agents, brokers as well as the homeseekers.
A business venture of the Infoedge group, the purpose of the website is to act as a link between the home buyers and tenants to agents and help them score relevant information about the properties available for rent or for buying around them.
The portal has been expanding rapidly and has already marked its presence in 25+ cities in India. It has earned itself a valid reputation, becoming the 2nd largest property portal in India. The Alexa ranking of the website is 140.
The website was discovered and run since 2005 and recently, they enabled mobile-friendly interface of the portal which allowed their customers as well the brokers to view, exchange information online through the use of cell phones on both android and IOs platforms.
- MagicBricks
The game changer in the field of real estate, MagicBricks in number 1 ranked home hunt portal in India. The Alexa ranking of the website is 154. The website is an online business venture of the Times Internet Limited, which is a sub arterial branch of Bennett, Coleman & Co. Ltd.
It works as a two-way portal as it allows both the owners and property agents to list their properties for exposure to the home buyers. The portal has its presence all over India and thus, caters a vast audience.
Apart from providing the mainstream services, the portal also deals with providing relevant information regarding the property related problems generally faced by the people.
The portal also extends its services to the latest property related updates, home loans and taxation information, and also expert advice to its buyers regarding their property related issues. The biggest benefit that they provided to their users is that the users are free to choose properties that are listed by owners to skip the brokerage fee.
The website was earlier computer supported but enabled mobile-friendly interface since the year 2011.
- Commonfloor
Having a vast presence in almost 200 cities of India, Commonfloor is an online portal catering to the property buyers and sellers.
The website was discovered first in the year 2007, and now it has more than 5 lakh properties as well as 1000+ upcoming projects registered on the platform. The website has been ranked 210 by Alexa.
The website initially provided real estate management services to its clients, and now they also deal with articles and blogs related to property related topics and issues.
Impact of COVID-19 and lockdown
The business ran as usual for the first two months of the year 2020, but all real estate activities came to a sudden halt in late March with the lockdown. Although the economy started to unlock from June onwards, the situation remained grim through September as construction activities were stalled because of labour paucity, while sales were down on account of concerns over economic growth. The threat of job losses loomed large, which had a major dampening effect on consumer sentiment.
With no site visits possible during the lockdown, real estate developers and property brokers swiftly adopted digital technologies to launch new projects and market their properties, with a fair amount of success. As a positive, the pandemic accelerated the pace of digital adoption in real estate, which will go a long way in transforming how properties are sold in the country going forward. Hence in spite of the situation going down no matter the industry pulled to its socks right on time and ran with the pace of aiming profits and its gross revenue.
The market growth and value
The Construction industry in value terms is expected to record a CAGR of 15.7% to reach $ 738.5 billion by 2022. The Construction industry in India consists of the Real estate as well as the urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, amongst others. While urban development segment broadly consists of sub-segments such as water supply, Sanitation, Urban transport, Schools, and Healthcare. Indian real estate attracted $5 billion in institutional investments in 2020.
• By 2025, Construction market in India is expected to emerge as the third largest globally
• By 2025, Construction output is expected to grow on average by 7.1% each year
• By 2020, Construction equipment industry’s revenue is estimated to reach $ 5 billion
100% FDI under automatic route is permitted in completed projects for operations and management of townships, malls/shopping complexes, and business constructions.
100% FDI is allowed under the automatic route for urban infrastructures such as urban transport, water supply and sewerage and sewage treatment.
Real estate is a field wherein aspiring entrepreneurs can find many paths to success. Many of today’s wealthiest individuals have made their fortunes in real estate, and it’s one of the few business sectors that can deliver fast turnarounds and establish lucrative careers quickly. That said, if you’re getting into real estate to get rich quick, you might need to get real about both your expectations of success and how you’re going to get there.
If you have a passion for real estate, and you are considering making it a business, it can be a rewarding career, if you’re willing to put in the hard work. These hints can help any budding real estate mogul enter the field armed with the insight they need to avoid pitfalls and optimize their paths to success.
The bottom line
The Securities and Exchange Board of India (SEBI) has given its approval for the Real Estate Investment Trust (REIT) platform, which allows all kind of investors to invest in the Indian real estate market. It would create an opportunity worth Rs. 1.25 trillion (US$ 19.65 billion) in the Indian market in the coming years. Responding to an increasingly well-informed consumer base and bearing in mind the aspect of globalization, Indian real estate developers have shifted gears and accepted fresh challenges. The most marked change has been the shift from family owned businesses to that of professionally managed ones. Real estate developers, in meeting the growing need for managing multiple projects across cities, are also investing in centralized processes to source material and organize manpower and hiring qualified professionals in areas like project management, architecture, and engineering.
The residential sector is expected to grow significantly, with the central government aiming to build 20 million affordable houses in urban areas across the country by 2022, under the ambitious Pradhan Mantri Awas Yojana (PMAY) scheme of the Union Ministry of Housing and Urban Affairs. Expected growth in the number of housing units in urban areas will increase the demand for commercial and retail office space.
The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the country’s urban population.
The growing flow of FDI in Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards. Indian real estate is expected to attract a substantial amount of FDI in the next two years, with a US$ 8 billion capital infusion by FY22.
