By : Saniya Taneja
All that a man needs to survive on this planet is food in stomach, clothes over the body and a roof above his head. It is these basic demands that are at the core of the economic system. Of these, due to rising population and increasing income levels, real estate has been at centre of discussion for the past few decades.
In terms of economics, real estate is a property consisting of land and buildings while from a business point of view, it has transformed into a complete profession, diversifying its fields into various other sectors. With the hike in property and rural to urban migration, real estate has gathered an important role in today’s society providing options of sale, purchase and rent meeting the basic requirement of a human – a roof to live.
Real estate is not limited to providing residential and commercial benefits only. Rising demand of rental places and sky rocketing prices push people with surplus money towards investing in projects which can further accelerate their income. Investment in real estate is often considered better and more beneficial than the investment in gold and bank deposits. Considering the resale value of the property, people prefer to invest in good deals and procure maximum benefits. Rent derived from the property is higher than the interest received from any fixed deposit.
Government projects and policies like Smart City also play a role in development of real estate which grab all such opportunities. The country has seen development of smart cities like Gurgaon in the vicinity of Metros which has impressed NRI investors to pursue their investments in these cities which further contributes to their growth.
But the real estate market has seen downfall in the last 4-5 years due to mistrust emanating from builders delaying the projects, increasing supplies and sometimes taking the consumers for a ride through hidden costs involving the projects. Many have been forced to live in rented apartments for having sold their old homes in the hope of new plush apartments which they never received. The Supreme Court emerged as a saviour for them giving harsh judgements against real estate developers giving the consumers what their were promised.
Investment in real estate is widely preferred to keep the surplus money secure and for receiving some extra perks. It is a productive way to manage the wealth in a systematic manner and accrue further opportunities. The purchase/sale should, however, be done carefully keeping into view the market trends as there is no rule of thumb that the property would always appreciate. Depreciation of the property is a major constraint for investment in real estate as seen in recent years.
India’s demand for homes has halved from what it was in 2013. The year 2017 saw sales of home fall from half a million in 2013 to half of that. Demonetisation and the passing of Real Estate Regulation and Development Act, 2016 gave a big jolt to the industry. Deficiency of cash post demonetisation and passing of the consumer friendly act proved a bane for the real estate developers and investors.
Every cloud has a silver lining and so does the RERA! The real estate experts believe that with all states implementing the Act sincerely will help regaining the trust among the buyers as the developers will fall in line and start playing by the rules under the authority of the Act. The demand will see a push which will further attract the investors and will help revive the real estate sector from death.
Real estate is a major business sphere and any positive trends in the sector will also assist other businesses to reap benefits and further help enhancing employment opportunities, agricultural growth and industrial advancement.
There is a genuine demand of residential homes in India and one of the biggest roles of real estate is to provide dream homes to the people who have worked all their lives to achieve one. With millions moving from low to middle class every year the demand for homes is rising giving a firm platform for growth of business in real estate.