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 announcement of demonetization and implementation of the Benami Properties Act for unregulated properties took place in the same year. Economists predicted the growth rate of the real estate sector to slow down more than ever as a result.
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).
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.