The Indian real estate sector has grown at 20% annually and contributes 6-7% to India's GDP. It includes housing, retail, hospitality, and commercial real estate. The housing market makes up 85% of the sector and is expected to grow demand from 880 million to 1.5 billion square feet by 2028. Recent government initiatives like the RERA Act and investments in infrastructure and smart cities are fueling further growth in the sector. However, the market still faces challenges around construction delays and inventory overhang from previous downturns.

1. Real Estate Industry Analysis
Presented By :
Shubham Aggarwal

2. Sector Overview
• The Indian real estate sector has come a long way and is today one of the fastest
growing markets in the world with 20% growth rate per anum.
• It comprises four sub-sectors – housing, retail, hospitality, and commercial. While
housing contributes to 6-7% of India’s gross domestic product (GDP), the remaining
three sub-sectors are also increasing at a fast pace.
• The global capital flow into Indian real estate in 2016 stood at $5.7 billion.
• The total market in the country is expected to increase by 13% and touch US$ 853
billion by 2028
• The RERA- Real Estate (Regulation and Development) Bill, 2016 was passed by the
Rajya Sabha on March 10 and by the Lok Sabha on March 15 last year will be
effective from May 1 2017.

3. Market Size
• In the period FY2008-2028, the market size of this sector is expected to increase at a
Compound Annual Growth Rate (CAGR) of 13 per cent.
• The private equity investments in real estate increased 26 per cent to a nine-year
high of nearly Rs 40,000 crore (US$ 6.01 billion) in 2016.
• Sectors such as IT and e-commerce have registered high demand for office space in
recent times. The office space absorption in 2016 across the top eight cities amounted
to 34 million square feet (msf) with Bengaluru recording the highest net absorption
during the year.
• Mumbai is the best city in India for commercial real estate investment, with returns
of 12-19 per cent likely in the next five years, followed by Bengaluru and Delhi-
National Capital Region (NCR).

4. Segments in Indian Real Estate Industry
Real Estate
Sector
Non Residential
Commercial
Sector
Retail Sector
Hospitality
Sector
Offices
Residential Housing

5. Housing Sector

6. Residential Real Estate
• Phases of growth:
• Phase I (2001-2005): Initial growth phase with off take and prices picking up
• Phase II (2006-2008): High growth phase with high demand and prices more than
double. Owing to global meltdown, the residential real estate market in India too
witnessed an astounding fall in demand and capital values, between first half of 2008
and first half of 2009.
• Phase III (2009-2010): Substantial slowdown in demand due to dented affordability
and economic crises.
• Phase IV (2011-2014): Consolidation phase, with demand, supply and prices gradually
moving up in line with improvement in economic environment.

7. Residential Real Estate Market
• Residential projects make up 85% of the Indian real estate market
• The downturn in 2012 has contributed to inventory “overhang,” in which supply
exceeds demand but prices remain high.
• Expected demand to grow from approximately 880 million square feet to 1.5 billion
square feet till 2028.
• Reasons for high demand for residential real estate include a continuing urbanization
trend and reduced household sizes due to the rise of nuclear families.
• Categories of House in India are: Flats, Villas, Haveli, Kothi, Row Housing etc

8. Residential Real Estate Market

9. Current Scenario of Indian Real Estate Sector
• In its 12 five-year plan (FY2012-17), Indian
government has proposed to invest USD 1 trillion
in the infrastructure sector and Rs. 7,060 crore
has been allocated to develop 100 new smart
cities.
• With the introduction of Real Estate Investment
trust (REITs) and Infrastructure Investment
Trusts (InvITs), a huge capital inflow is expected
in this sector.
• The housing loan rebate has been increased from
Rs. 150,000 to Rs. 200,000 in an attempt to revive
the housing and other related segments.
• According to World Bank’s Doing Business 2012
report, India is one of the top countries in
housing & workspace needs, but ranks 181 in
terms of construction permission processes.

10. References
• http://economictimes.indiatimes.com/wealth/real-estate/6-major-trends-in-indian-real-
estate-in-2017/articleshow/57406717.cms
• https://www.ibef.org/download/Real-Estate-March-2017.pdf
• http://www.realestateinsidermag.com/business-tips/factors-affect-real-estate-market/
• http://www.naredco.in/notification/pdfs/FINAL_India_Real_Estate_Digest_ALL_pages
.pdf
• http://www.cci.in/pdf/surveys_reports/real-estate-sector-india.pdf
• https://simconblog.wordpress.com/2013/10/11/real-estate-industry/
• http://www.kpmg.com