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| Real estate Patna |
The world's largest democracy, India
To put it objectively, Indian real estate has been at the
receiving end of step-motherly treatment on all fronts. The real estate sector
is now perceived as unfriendly to both developers and buyers. Over the last few
years, the real estate story has been a saga of missed opportunities, and a
turnaround is definitely expected. This can only happen if the new government
takes the necessary steps to make the real estate market viable for sellers and
buyers again.
There are a number of reforms that could collectively achieve
this. For instance, the new government can put mechanisms for the fast-tracking
of residential project approvals. This would go a long way in increasing supply
and keeping property rates rational, especially in the cities. In particular,
the approval process needs to be sped up for affordable and mid-income housing projects so that Indian real estate can narrow down the massive and
long-standing supply deficit in these segments.
The new government
also needs to speed up infrastructure development. Many key projects are
heavily delayed or pending, and infrastructure is extremely important when it
comes to making real estate development viable in newly emerging areas as well
as established areas that have stagnated due to infrastructure deadlock.
First-time property
buyers need to be given better incentives for home purchase. The existing
incentives are threadbare and nominal at best, and completely insufficient to
encourage fence-sitting buyers.
Moreover, the new
government must take all measures to make green housing projects more viable
for developers as well as buyers. Sustainable housing must become a viable and
desirable alternative choice for a larger base of buyers so that demand for
green homes increases.
Finally, the
new government must reboot the regulatory framework surrounding real estate. As
things stand now, the Indian real estate sector is far from being a desirable
investment route for foreign funds. The two major reasons for this are
unfriendly norms for foreign investment into real estate and the stubborn
opaqueness of the sector itself. While better regulation in context with Indian
real estate will give it a better image and make it more attractive to both
domestic and foreign funds, a revamp of the current investment norms will help
in translating this renewed attractiveness into actual viability. The real
estate sector cannot flourish if the current constrictions in the funding
pipeline are not cleared up.
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