Although brimming with immense potential, the real estate is refrained from realizing its true prospects due to lack of transparency leading to looming uncertainty driving the industry. Extending employment to over 50 million people, it is the third-largest employer in the country after agriculture and manufacturing.
But the presence of various impediments in the forms of politics, bureaucratic turbulence and enforcement regulations are the source of great resistance in the growth of the sector. For instance, the stamp duty meant for government revenue has seen a spike of 6-7 per cent in the past which does not align with the market realities.
This neither has a phenomenal impact on the government's general revenue nor contributes to the gross domestic product. Hence, the negative graph of stamp duty outweighs the pros. The waiver of stamp duty can be a potent boost in the real estate sector which can encourage skeptical customers to buy an affordable property. The widespread disaggregated secondary market owing to lack of information, product standardization, and trust overshadows investor confidence leading to a dilution in transactional volumes.
Just like the agency-agent model prevalent in the regulated real estate market, a well-monitored secondary market is the need of the hour. According to this model, each agent in the industry is under the umbrella agency where they are accountable for their actions.
A similar structure in the secondary market will ensure a well-defined transaction, eliminating any breach of contract. Removal of these impediments will immensely contribute to the economic revival of the sector, speeding up the resurgence of the Indian economy. Real state is a great contributor to the growth and development of a country that can be perceived from the example of Dubai. Where once the place was inconsequential, considered as an unknown fishing village with an unwelcoming climate hanging on a desert, real estate came as a boon promoting infrastructure development, making it a tourism hub, transforming the tough terrain into a paradise.
The various architectural wonders such as Palm Jumeriah, the Burj Khalifa, to name a few, stand out and even join the league of top-notch real estate markets across the world from London, Hong Kong to Monaco. According to a report, the real estate contributed to the country's GDP by 6-7 per cent in 2017-2018, and delving on the urbanization levels in the next decade, it is estimated that by 2030 the sector will touch $1 trillion, making it the third-largest sector globally. The current decade being the flag bearer of technology such as artificial intelligence, machine learning, data science and big data can have a groundbreaking impact, ushering myriad possibilities in transactions, capital deployment, property management, or even the consumption pattern. Where technologies assist customers in making more informed decisions and champion convenient physical property transactions via rapid digitization, it is revolutionary in driving away the firm gripping loopholes prevailing in the industry from generations. Removal of which can trigger discernable positive growth.
The very drawback of ancient land laws followed by the developer's unnecessary romanticization of land has rendered the sector with ancient and highly unreliable land records system. Digitization of land records and online registration of property will be instrumental in eliminating complicated formalities by enabling the first point of sale between the builder and the first-time buyer.
The smoothening of property-related information verification is a great contributor to making the process seamless. Furthermore, it can enhance the glitch-free ecosystem for investment at both the national and international level owing to the credibility built via transparency, in turn facilitating large-scale satellite town development driven by private sector players, sourcing out direct and indirect employment leading to the country's GDP surge. The algorithmic tech innovations aiding in virtual torus stand true to the customer's expectations by producing results which are an amalgamation of customer's priorities. Hence, the industry is witnessing a shifting surge towards online platforms taking various factors into account - from location, commuting to livability like a semi or fully furnished houses, the customers are spared the hassle of scanning thousands of properties before finalizing the one fulfilling all their requirements. Incidentally, online platforms have the potential to comprehensively manage property which proves to be a boon for the owners residing in a different city, town, or country.
Despite the absence of physical presence all the activities like maintenance, repair, inspection, finding new tenants, preparing rent agreement can take place in a hassle-free manner, keeping the property-related worries at bay. These creative and tech-driven solutions resonate with the effort of overcoming the industry challenges that have cascading effects on various allied and core industries connected to real estate like iron, steel, wood, cement, etc. Eliminating the loopholes prevailing in the industry can attract proper funds from private equity channels, foreign funding, and trusts, unleashing the true potential of the sector having the ability to drive the country's economy.