1. Real Estate

2. Industry introduction

3. What is this industry
Real estate is "property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing
Major categories in India
Co-operative Housing Societies (CHS)
Condominiums
Builder flats
Chawls
Villas
Lanes Houses
Tianjin
Kothis
Havelis
Independent Floors
Lal Dora – Where people carry out commercial and residential activities both.
The size is measured in Gaz (square yards), Quila, Marla, Beegha, and acre.
Basic Introduction to the industry

4. Overview of Industry Market size of real estate in India
The market size of real estate in India is expected to increase at a CAGR of 11.2 per cent during FY

5. Cont… Advantage India Robust demand Growing demand
2013
Growing demand
Attractive opportunities
Growing requirements of space from sectors such as education and healthcare
Growth in tourism providing opportunities in the hospitality sector
2020E
Demand for residential properties has surged due to increased
urbanisation and rising household income
About 10 million people migrate to cities every year
35 per cent of the population is in young age bracket (15-35 years)
Growing economy driving demand for commercial and retail
Market size: USD121
billion
Market size: USD853
billion
space
Advantage India
Increasing investments
Policy support
Allocation of USD1.3 billion for rural housing and USD0.7 billion for NHB to increase the flow of cheaper credit for affordable housing for urban poor as per Budget
The government has allowed FDI of up to 100 per cent in development projects for townships and settlements
FDI in construction development of USD23.4 billion between April 2000 and April 2014
During April 2012–January 2013, the real estate sector accounted for
8.8 per cent of total FDI inflows into
India

6. Different Segments Real estate sector Residential space
Fragmented market with few large players
Residential segment contributes ~80 per cent of the real estate sector
For FY12, estimated housing shortage for urban area was million houses, indicating a tremendous growth opportunity
Residential space
Few players with presence across India
Of a total supply of 445 million sq ft of office space planned in 10 major cities, around 167 million sq ft would come up during with the demand being 66 million sq ft during the same period
Commercial space
FDI in multi- brand retail to boost demand
Fragmented market with few national players
Of a total planned supply of 67 million sq ft across major cities, around 38 million sq ft would come up during
Real estate sector
Retail space
A competitive market with many players; received investments by private equity funds worth USD11 million in 2013
As of 31 December 2012, the country had 1,376 approved hotels with 76,567 rooms
Hospitality space
The government has formally approved 576^ SEZs, of which 173 are in operation
Majority of the SEZs are in the IT/ ITeS sector
SEZs

7. Growth Drivers Growth drivers Growth in tourism Urbanisation
Epidemological changes
Growth drivers
Growing economy
Easier financing
Policy support

8. Importance of the sector
Real estate and construction sector has continued to contribute significantly to the country’s GDP; Average contribution over estimated to be 17.5%
On an average, real estate contributes 8% while construction contributes 9.5%
Both real estate (19.5% CAGR) & construction (CAGR 18.3%) have witnessed tremendous growth since 2001
Contribution of Real estate and Construction to India’s GDP (USD Bn)
17.5%
17.5%

9. Legal Formalities / Act /Govt. Regulations

10. Govt. Initiatives and Policy
There has been a drastic curtailment in restrictive policies such as the Urban Land Ceiling and Regulation Act.
Reforms in the Integrated Township Policy.
Liberalization of FDI rules and the emergence of real estate funds.
Range of Government benefits & incentives including residential tax breaks and the Special Economic Zones.

11. Housing for economically weaker sections
Govt. Policy / Subsidy
Additional deduction of up to USD1,841 on interests payable on home loans of up to USD46,032 announced in the Union Budget 2013–14
To liberalise scheme of interest subversion of 1 per cent on home loan by including loans of up to USD31,250 for houses that cost up to USD52,080
Ease in housing finances
Housing for economically weaker sections
Allocation of USD1.3 billion for Rural Housing Fund in Budget
Allocation of another USD0.7 billion for National Housing Bank (NHB) to increase the flow of cheaper credit for affordable housing for urban poor in Budget
The government has allowed FDI of up to per cent in development projects for townships and settlements
FDI of up to 100 per cent is allowed in the hotel and tourism sector through the automatic route
FDI
SEBI released draft guidelines for investments by Real Estate Investment Trusts (REITs) in non-residential segment.
Upon implementation, this would widen the real estate market and boost funds entering
the organised real estate sector.
Widening the scope of real estate market
In December 2014, the government passed an ordinance amending the land acquisition bill
This ordinance would help speeding up the process for industrial corridors, social infra,
rural infra, housing for the poor and defence capabilities
Land Acquisition Bill

12. Construction of buildings Service Installations
Various Laws and Act…
Numerous Central and State level laws, rules and regulations govern the construction activity…
Land title
Planning & Land
Construction of buildings
Indian Registration Act , 1908
Various State legislations
Land Revenue Acts by all State Governments
Town and Country Planning Acts by all State Governments
Master Plans/ Development Plans
National Building Code 2005
Local Building Bye-Laws
NOC from Central Govt.
NOC from State Govt.
Service Installations
Environnent Impact Assesment (EIA) Notification S.O (2006)
Ancient Monuments and Archaeological Sites and Remains Act, 1958
Works of Defense Act 1903 (WDA)
Environment (Protection) Act, 1986
Forest Conservation Act, 1980
Water (Prevention & control of pollution) Act, 1974 and Air (Prevention & control of Pollution) Act, 1981
Water connection
Sewerage connection
Gas connection
Telecom connection Power / Electricity connection

13. Cont.… 12

14. Legal Formalities
The Real Estate (Regulation And Development) Bill, 2013
Highlights of the Bill
The Bill regulates transactions between buyers and promoters of residential real estate projects. It establishes state level regulatory authorities called Real Estate Regulatory Authorities (RERAs).
Residential real estate projects, with some exceptions, need to be registered with RERAs. Promoters cannot book or offer these projects for sale without registering them. Real estate agents dealing in these projects also need to register with RERAs.
On registration, the promoter must upload details of the project on the website of the RERA. These include the site and layout plan, and schedule for completion of the real estate project.
70% of the amount collected from buyers for a project must be maintained in a separate bank account and must only be used for construction of that project. The state government can alter this amount to less than 70%.
The Bill establishes state level tribunals called Real Estate Appellate Tribunals. Decisions of RERAs can be appealed in these tribunals.
Real Estate Bill