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.
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).
The real estate demand in India was subjected to fluctuations since 1991, when economic liberalization took place. The period between 2001 and 2008 saw high growth in the real estate sector while it experience drastic slowdown from 2008 to 2014. At present, this sector is again witnessing decent growth in some parts of the country even after demonetisation.
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.
Bengaluru is known as the “Silicon Valley” of India because 40% of all companies are in the service sector and is a hub for Information Technology (IT). The city has consistently ranked among the top 20 destinations for investment in South Asia Pacific (SilliconIndia 2015).
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.