The long-term outlook for the Indian real estate sector is bright. Urbanization, massive changes and increasing cost will drive growth above the next decade. Nearly five million Indians move into cities every year. People are increasingly choosing to stay in nuclear family models with dual incomes, thus increasing each family extra income, and the demand for housing.
The Narendra Modi government recognizes the value of real estate development to the economy and has made a lot of announcements that will benefit the sector. These types of include the aspirational Real estate for All by 2022 policy and the 100 Smart Cities initiative. The recent Union budget proved this focus as the government announced numerous plans changes to support the affordably housing industry. The government has also improved the regulations governing investment trusts and foreign immediate investment to promote better liquidity. It has also taken important steps to improve governance levels with the Real Estate Regulation and Development Act, which will ensure that home buyers are protected and that the sector increases more credibility
The government has a major role to play in setting a policy agenda that encourages both consumer protection as well as industry development. Real estate development could be a priority for the authorities for many reasons. First, the development, second the major employment generator, behind only agriculture. Second, the sector is a significant contributor to the economy directly, and through ancillary industries such as cement, steel and paints. Third, there exists an acute housing crisis in the country, with limited housing and large sectors of urban India moving into slums. Lastly, the property sector is a significant earnings source for the federal government and can drive funding for significant infrastructure requirements.