Independent India: 70 years of Real Estate Milestones
Real Estate Milestones: It has been 70 years of Independent India; here is a look at the major real estate milestones that have had a big impact on India’s real estate industry. Government’s role is important in how a particular industry shapes up; it is done through new sector-specific policies as well improving the older ones.
Real Estate is the major industry across the world and there was a constant focus to have more transparency in the sector through regulations and technology. India has seen many policies and certain milestones are spread over decades. Real Estate Milestones that had a long-lasting impact on India’s real estate industry-
- Chandigarh and Gandhinagar were formed in 1952 and 1960 respectively, the first and rare occasion of planning entirely new cities in the country.
- Maharashtra Regional and town Planning Act, 1966, first included the practice of development plans and town planning. First guidelines for district planning were issued in 1969 by the planning commission, which led to many states to formulate district plans. With few excellent examples it did not yield positive results.
- Urban Land (Ceiling and Regulation) Act was enacted in 1976 to check on the hikes in land prices in urban areas and to provide low-income housing. As of poor implementation, it worsens the situation of availability of land for social housing and infrastructure in urban areas.
- Government set-up institutes such as Housing and Urban Development Company in 1970, City and Industrial Development Corporation in 1971, Mumbai Metropolitan Region Development Authority in 1975, National Housing Bank in 1988 and the Housing Development Finance Corporation in 1994, to strengthen residential real estate.
- In 1991 newer job opportunities were created and a big market of consumers was given access to many products and services for the first time. This led to entry of MNCs (Multi National Corporations) into India in a big way, and a demand of contemporary world class office space.
- Completion of India’s first property cycle was marked in 1994-1999, which was opened up in post liberalization reforms saw property prices go up for the first time. After Asian Financial Crisis in 1997-98, foreign capital got wiped out and growth in capital values came to a halt.
- Commercialization o f airspace above transit routes was first introduced at Vashi Station in 1992.
- More foreign companies started setting-up offices in cities like Hyderabad and Bengaluru, which led to growth in these cities commercial and residential real estate.
- FDI (Foreign Direct Investment) in Real Estate was first introduced in the year 2005 which opened newer ways of funding.
- Before millennium Indians got the concept of organized retail through the first mall: Spencer Plaza in Chennai; followed by Crossword in Mumbai and Ansal Plaza in Delhi. Since then there has been a rise in mall development across the country.
- Public Private Partnership (PPP) was used to develop the airports of Mumbai, Delhi, Bangalore and Hyderabad in 2006. This led to introduce concept of airport cities and airport precinct real estate.
- Economic slowdown during the collapse of Lehman Brothers in 2008, there was a risk of job losses which made it difficult for the investors to exit from their stakes in Indian real estate. Global financial crisis had a big impact on commercial realty in India but limited impact on residential realty. As prices fall sales improved and residential market bounced back.
- Real Estate Regulation (& Development) Act (RERA) came into effect from May 1, 2017 for transparency between buyers and developers. This act will make homebuyers confident, empowered and well protected.
- Real Estate Investment Trusts (REITs) were first opened in 2014 and first REIT is due for launch soon.