Traditionally, India has had a bank dominated financial sector. Even so, there have always been Non-Banking Financial Companies (NBFC) to provide finance to mainly unorganized markets. NBFC have continued to complement banks in providing infrastructure finance.
The Indian real estate sector has come a long way since the 1990s’ by becoming one of the fastest growing markets in the world. It is not only successfully attracting domestic real estate investment but foreign investments too.
The Real Estate Regulation and Development Act (RERA) 2016 is a revolutionary Act in the history of the Indian real estate sector. It was introduced first in the year 2013, but due to objections raised in the parliament, it came into effect only in May 2016.
In India, the construction business in the real estate sector is the second largest in terms of employment generation. It is next only to the agriculture sector. As an economic activity construction provides employment to approximately 33 million people in India (Nithyamanohari & Ambika, 2014).
Liberalisation can be defined as the reduction of legal restriction and economic liberalisation can be defined as privatisation. It is associated with transferring the ownership from public sector to private sector (Sally, 2007).
Real estate supply refers to a schedule that describes the quantity of commercial space or number of housing units supplied at varying prices. The rising economic performance in India has increased affordability and living standards in the country, particularly the upper and middle class.
The real estate sector is one of the most dynamic and globally recognized sectors today, owing to a number of factors like population spurt and increased purchasing power of consumers. India is one of the biggest real estate market. It comprises of four subsectors namely housing, retail, hospitality and commercial. Growth of these sectors is highly dependent on the growth of the corporate environment and the demand for office space and residential projects (IBEF, 2016).
In the past five years, there has been an undeniable slump in India’s real estate. This was due to reasons such as after-effects of the recession, inflation, inventory pile-up, etc. However the same has not been majorly felt in India’s two metropolitan cities, Mumbai and Pune.