Why should Real Estate get the Status of Industry

February, 04
Why should Real Estate get the Status of Industry

The place where I work, is conveniently located on the 16th floor of a commercial building.

It is a nice, spacious office with mellow tones of yellow and brown, and a panoramic window, which offers you a beautiful view of Delhi skyline. As I sit on my work desk, and let my eyeballs fluctuate between the stunning view and my computer screen, I notice all these other buildings towering the space. In that moment, Delhi looks like a fast-paced realty bazar. I say fast-paced, because ten years ago, these buildings never came in my line of vision. And today, Delhi is a revolutionized place altogether.

Admittedly, when I think about the real estate industry in India, my heart swells with gratitude.

But wait! Real estate is not really an industry in India, is it?

  • The real estate market in India is expected to reach around US $1 trillion dollars, by the year 2030, according to a 2018 Market Trends study by IBEF (India Brand Equity Foundation)
  • Demand for office and residential spaces are ever-increasing, in our country
  • The real estate in India backs about 5% income out of 14% through the infrastructure sector and the GDP (Gross Domestic Product)
  • As per an article on Commonfloor, real estate in India generates the second highest employment opportunities

All these astonishing accomplishments, without the certification of the term ‘Industry’. Isn’t it fascinating?

In an interview about Budget 2019 Expectations, Mr Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, “Real estate is one of the major contributors to the economy. Despite such strong fundamentals, the government does not recognise real estate as an industry. It is time that real estate gets industry status”.

Without further delay, let us find the reasons of why important people like Mr Baijal want the realty market to attain the official status of ‘industry’ in India.

1. A Decrease in the Capital Cost of the Project

The government should already certify the Indian real estate market as a solid industry. This will allow the developers to raise funds for the development of their estates, at a much lower cost. Hence, the capital cost of the developing project will considerably decrease.

Funds raised at Lower Cost = Lower Capital Cost of the Project

Now, what is in it for the home-buying audience, you ask? If the overall cost of the project decreases, you won’t have to pay as much money as previously, for your chosen 2 BHK flat in Noida Extension.

2. RBI will identify this sector as one of high priority

According to a news report in Business Today, RBI made a decision to keep the REPO rate (the rate at which other financial institutions/banks borrow money from RBI in case of shortage of funds) unchanged at 6.5%. Apparently, this decision was made to boost the confidence of home buyers into the realm of property, and encourage investments.

Imagine if the government firmly branded property in Noida, Delhi, Gurgaon and other regions of our country, under the category of real estate industry. Automatically, RBI’s attention over this particular segment will intensify, hence, making things easier for a whole lot people.

3. An Increase in Foreign Direct Investments

As of now, the real estate sector in India is largely unorganised, with lack of professionalism being the major issue. This is mainly due to lack of intervention on behalf of major corporations and Foreign Direct Investment. Just as this sector gets the status of ‘Industry’ by the government, it is sure to attract FDI and large companies into the mix. Such induction will surely bring a bit organization and professionalism into the system.

4. Easy Approvals and Loan Procurement

Gaining the title of ‘Industry’ can change the perception of the State and the Central government. As and when the government gets more accepting of our country’s property market, surely, loan procurement would become easier. Various policies for the betterment of this sector would be introduced by the governmental authorities, and approval of those policies will become easier.

Moreover, the rates of interest for real estate will become stable, once it’s given the character of a structured sector.

The Real Catch for My Home-Buying Audience!

Remember the Realty Equation I mentioned above in the 1st point?

Funds raised at Lower Cost = Lower Capital Cost of the Project

Well, let’s elaborate it further, so that the real hook comes into the picture, for you, my home-buying audience.

Funds raised at Lower Cost = Lower Capital Cost of the Project = Decreased Cost of Home Purchase = Money Saved

And who doesn’t like to save their hard-earned money, once in a while, right?

Speaking of saving money, I have the perfect opportunity for you to save some, at the same time as invest in a home that will give you a life of luxury and exclusivity.

Welcome to RG Luxury Homes, where Exclusivity has a New Address.

Unlike property in Delhi, the apartments here are friendly to the pocket, simultaneously never compromising with the quality of your lifestyle. Every apartment is 3 side open, which implies that your family time gets lots of spacious room to breathe. This residential project has been designed with a lush green central landscaped podium, so that you get closer to Mother Nature, without having to lose touch with your Home Sweet Home. Overall, from the three tier security system, to the fully equipped clubhouse for your recreation, things are going to be rather organized at RG Luxury Homes.

If the government could see how amazing the Indian real estate sector was fairing in building beautiful homes for people like you, I’m sure this market would have acquired the status of being an ‘industry’ way back. Nevertheless, 2019 has just started. There’s always hope.

And you know what the best thing about this entire situation is? The real estate industry, official or not, is going to continue constructing flats in Noida Extension like, RG Luxury Homes, so as to bless you with Homes that are splendid, exclusive and everything that you’ve ever dreamt of.

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