Under the aegis of Ministry of Housing & Urban Affairs, Government of India

Real Estate
Unboxed
The Modi Effect

2014-2024

March 2014-24
2 Real Estate Unboxed : The Modi Effect, 2014-2024

FOREWORD
In light of the Indian government’s reforms over the last decade, NAREDCO and ANAROCK
collaborated to assess the Indian real estate sector’s growth. Over the last decade,
India’s economy has impressively leapfrogged to the 5th position on the global economic
performance ladder. The Indian economy has maintained its status as the fastest-growing
major economy for three consecutive years, a beacon of hope in a contractionary global
economic climate.

A market size of US$ 1 trillion is expected by 2030, up from US$ 200 billion in 2021. This market
size is expected to contribute 13% to India’s GDP by 2025, making the sector a pivotal
contributor to economic development, employment, and government finances.

In FY23, India’s residential property market witnessed the value of home sales reaching an
all-time high, marking a robust 48% Y-O-Y & sales velocity also rose 36% annually. The shift
in structural policies, better governance & regulations has led to a more organized sector
with increased transparency and accountability. RERA and IBC laws have led to pragmatic
reforms in the sector’s modus operandi with gaining investor’s and customers’ trust.

The novel PMAY scheme announced in 2015, 1.18 crore houses have been built in urban
areas and 2.51 crore houses have been built in rural. Soon, the government will finalize a
scheme to provide urban housing credit to low-income citizens, such as those who reside

Table of
in rented houses, slums, chawls, or unauthorised colonies within cities. The scheme will be a
booster for those families who deserves to buy a ownership house.

CONTENTS
FDI and PE funds from global corridors flock to India’s real estate market. As a result, the
Indian economy and real estate sector are set for growth thanks to mega infrastructure
DR. NIRANJAN HIRANANDANI
development, sustainable housing demand, and grade A asset classes. In his vision and
mission of ‘Housing for All’, PM Modi has undoubtedly ushered in a new era for the real CHAIRMAN, NAREDCO
estate industry, and New Bharat.

03 FOREWORD
06 IMPORTANCE OF REAL ESTATE:
A CATALYST OF ECONOMIC GROWTH

Real Estate in India serves not only to meet the burgeoning housing demands of the expanding
population but also plays a pivotal role in the Indian economy, embodying a crucial sector that has
sustained significance over several decades. During the past decade, the Real Estate Sector in India

10 12
ISSUES/CHALLENGES HOW THE POLICIES AND REFORMS has experienced notable evolution, marking the onset of a period characterized by heightened
professionalism, transparency, and fortified structural foundations.
FACED BY RESIDENTIAL REAL ESTATE CHANGED THE DYNAMICS OF
PRE-REFORMS REAL ESTATE SECTOR With profound initiatives such as the Real Estate Regulation and Development Act (RERA), Goods
and Services Tax (GST), and various housing schemes like Pradhan Mantri Awas Yojana (PMAY), the
government has aimed to reshape the landscape of the real estate sector in India in the past 10
years.

20 24
The sustained emphasis on the development of infrastructure projects, during the last few years,
RESIDENTIAL REAL ESTATE MARKET CONSOLIDATION IN including expansions of metro networks, enhancements to road networks, and improvements in
PERFORMANCE POST REFORMS THE SECTOR connectivity, has had a pronounced impact on the demand for real estate and the valuation of
properties, not only limited to tier 1 and tier 2 cities but across the country.

Furthermore, the amalgamation of technology into real estate operations, encompassing practices
like virtual reality for property tours, online transaction platforms, and the incorporation of smart home
features, stands as a pivotal element in augmenting operational efficiency, fostering transparency,

26
and enriching customer experiences.
OUTLOOK With the increasing technology integration and urbanization on the rise, a greater emphasis on
sustainability and green building practices along with government policies and regulations are some
of the factors that will keep the momentum going on.
SHRI G HARI BABU
Adapting to evolving regulatory landscapes will be the key to success for developers and investors. PRESIDENT, NAREDCO
4 Real Estate Unboxed : The Modi Effect, 2014-2024

We take great pride in presenting the joint report, “Transformation of Real Estate Sector in
Last Decade,” collaboratively prepared by the National Real Estate Development Council
(NAREDCO) and ANAROCK. This report meticulously traces the transformative journey of the Real
Estate sector over the past decade.

Over the past decade, Real Estate Sector in India has undergone significant transformation,
ushering in an era of professionalism, transparency and strengthened foundations. Key policy
interventions have played a pivotal role in shaping the sector’s current status. Notably, the
enactment of the Real Estate (Regulation and Development) Act (RERA) has marked a notable
shift from an unorganized industry to a more structured framework, fostering transparency and
accountability.

The introduction of the Goods and Services Tax (GST) has addressed complexities in the tax
structure, bringing about a uniform and streamlined system that overcomes compliance and
transparency challenges. The persistent issue of stalled housing projects, a major concern for the
sector, has found resolution through the Special Window for Affordable and Mid-Income Housing
(SWAMIH) Fund, effectively addressing critical liquidity issues.

Additionally, the Pradhan Mantri Awas Yojana (PMAY), designed for ‘Housing for all,’ stands out
as a transformative initiative, significantly boosting affordable housing for the underprivileged and
marginalized sections of society.

Beyond outlining the reforms, the report comprehensively analyzes their effects on sectoral
performance over the last decade. As we stand at this juncture, the future of the Real Estate
sector appears exceptionally promising. It is poised not only to meet but to establish new
SHRI RAJAN BANDELKAR
benchmarks, setting the stage for continued growth and prosperity. VICE CHAIRMAN, NAREDCO

The Indian real estate sector is an important catalyst for the economic growth. A major
employment generator and an able segment that attracts significant foreign investments
has travelled an undulated path in the past. However, the past decade had its own set of
challenges and opportunities due to the reforms, global and national economic conditions
together with the disruptive COVID-19 pandemic. All these factors were skillfully navigated due
to the government’s timely intervention and supportive policies, resulting in the sector embarking
on a journey of unprecedented growth. Predominantly, an unorganised sector for an extended
period, the government has played a critical role by introducing reformative measures in the
real estate sector over the past couple of years, lending support to the industry to enhance
investor sentiments and accelerate overall growth.

The Real Estate Regulation Act (RERA) has been the most important reform that has facilitated
this massive transformation. The act has been instrumental in addressing the buyers’ injustices
and creating an environment that is transparent, accountable and responsible. This had
encouraged a large number of corporate houses to diversify businesses and enter the arena
and incorporate sound governance leading to the stupendous growth of the sector. From policy
reforms and technological advancements to shifting consumer preferences and economic
fluctuations, the sector has experienced a spectrum of influences that have left an indelible
mark on its residential landscape. This retrospective analysis aims to unravel the intricate
threads woven into the fabric of the Indian real estate market, offering readers a nuanced
understanding of the challenges and triumphs that have defined its trajectory.

As per ANAROCK Research, the top 7 cities in India witnessed a combined housing supply of
approximately 29.32 lakh units between 2014 to 2023. Remarkably, the total number of homes
sold in these top 7 cities in the same period exceeded an impressive figure of approximately
28.27 lakh units. In fact, 2023 was the year which recorded sales of 4.76 lakh units which is the
highest in the decade which also exceeds the supply of 4.45 lakh units leading to a continued
decline in available inventory.

Over the past decade, average housing prices across the top 7 cities witnessed continuous
year-on-year growth with average price appreciation in the range of 25%-60% across the cities.
To conclude, it can be stated that the Indian residential market has reflected an indomitable
spirit that has weathered storms and embraced opportunities. It has experienced a successful SHRI ANUJ PURI
journey during the last 10 years, marked by strong demand, supportive government policies, and CHAIRMAN, ANAROCK
increased investor confidence. These factors are favorable for future growth prospects in this
dynamic sector.
6 Real Estate Unboxed : The Modi Effect, 2014-2024

Burgeoning India RE:

Market Size (USD Bn)

1,000
2030E

Rising Contribution
(%) to GDP

13%
2025E

Employment in
RE Sector (Mn)

71Mn
2023

IMPORTANCE
OF REAL ESTATE:
A CATALYST OF
ECONOMIC GROWTH
The significance of the real estate sector in India and its Drives the Nation
contribution to the economy cannot be understated.
Real estate plays a pivotal role in driving economic 250+
growth, providing employment opportunities, fostering Ancillary Industries
infrastructure development, and catering to the housing
needs of the burgeoning population.

Additionally, it serves as a key indicator of the overall

health and stability of the economy. The residential
real estate sector in India is not just a market for buying FDI Inflows in Construction
and selling properties, it is a cornerstone of wealth Development (USD Mn)
creation and asset appreciation for investors. With its
far-reaching impact on various facets of society and
Attracted 4% FDI inflows
the economy, real estate stands as a crucial pillar that (April 2000 - September 2023)
sustains India’s growth trajectory.
66 Mn
1H FY2024
8 Real Estate Unboxed : The Modi Effect, 2014-2024

Real estate sector contributes

18% to the total employment in India
After agriculture, real estate sector is an important
provider of employment in India. As the sector
Burgeoning Market Size continues to grow, we expect employment to grow
of Real Estate in India multifold in the coming years. Over 18% of India’s
The Indian real estate sector was estimated to be workforce is employed in the real estate industry,
worth approx. USD 120 billion in 2017 and is projected which is a vital component of the country’s economy
to grow to USD One trillion by 2030. and is connected with over 250 ancillary businesses.

Employement in Real Estate (Million)

Market Size (USD Billion)
80
71
1,200
67

1,000
60
1,000 52

40
40
800
650 20
600
477
0
400 2013 2017 2022 2023

Source: Compiled by ANAROCK Research

200
120

0
2017 2022 2025(E) 2030(E)
Expansion of Ancillary industries
The real estate industry plays a pivotal role in
Source: Compiled by ANAROCK Research influencing numerous related sectors, including
cement, steel, iron, paint, furniture, and other
Rising Contribution (%) to GDP construction materials
India’s real estate sector has traditionally been
a significant contributor to the country’s GDP,
accounting for 6%-8% of the total GDP during 2014- FDI Inflows in
2017. Going forward, it is expected to double to 13% Construction Development
by 2025, making the sector one of the major drivers of
the country’s economic growth. The increasing share Construction ranks third in terms of foreign direct
of real estate to the GDP would enable increasing investment (FDI) inflows, accounting for 4% of total
industrial activity, improving income level and FDI inflows into the country between April 2000 and
urbanisation. September 2023. FDI in the real estate sector, which
includes construction development and activities,
was USD 58.5 billion between April 2000 and
Real Estate contribution to GDP (%) September 2023.
14% 13%
FDI Inflows (USD Million)
12%
10% 700
617
600
8% 7%
6% 500
6% 422
400
4%
300
2% 213
200
0% 125 146
2014 2017 2025(E) 100 66

0
Source: Compiled by ANAROCK Research
FY19 FY20 FY21 FY22 FY23 H1FY24

Source: Industry Estimates, DIPP, Construction

Development includes townships, housing, built-up
infrastructure and construction-development projects
10 Real Estate Unboxed : The Modi Effect, 2014-2024

Prior to the reforms in the real estate industry in India, some of the
major issues are mentioned below:

Funds used for Multiple Projects

The use of collections from one project for business expansion or construction
of other projects impacted the progress.

Lack of Accountability
Prior to regulatory measures, developers often faced no consequences for
unfulfilled promises, resulting in a lack of accountability within the industry.

Delay in Completion and Delivery

Delays in completion and delivery of units despite full payment
were prevalent issues.

Absence of Grievance Redressal Mechanism

The absence of a grievance redressal mechanism left homebuyers
waiting for years to seek relief through judicial system.

Myriad number of Sanctions & Approvals

The prolonged process of obtaining numerous sanctions and approvals, often
resulted in significant delays and cost escalation for developers.

Lack of Standard Practices

Lack of standard practices led to the ambiguities on the features, layout,
and amenities, causing disillusionment.

These challenges have not only undermined trust between developers and homebuyers but
have also resulted in significant financial losses and emotional distress for those involved.

The Grim Situation…

ISSUES/CHALLENGES As of 2016 As of 2016 As of 2019
FACED BY RESIDENTIAL REAL
ESTATE PRE-REFORMS 7.90 lakh units
Unsold units at its peak
40 Months
High Inventory Overhang
5.75 lakh units
(Stalled in projects
launched before 2013)
The real estate sector in India, prior to the last decade,
lacked transparency and credibility, making it difficult
As of 2019 Many real estate Property investors’

4.65
for homebuyers to obtain accurate and comprehensive
information about projects. Ambiguities in property majors in legal tangle confidence eroded
titles, unclear land records and a lack of standardized
~ INR lakh crore Liquidity crunch led Due to project
processes were some of the major hurdles.
(Value of stalled projects) to project delays delays and low ROIs
On the other hand, developers were required to
obtain a multitude of sanctions and approvals through
intricate and lengthy procedures to initiate project Addressing these issues required concerted efforts from regulatory authorities, developers, and other
development. These cumbersome procedures resulted stakeholders to ensure transparency, accountability, and fairness in the industry. Implementing robust
in project delays with an adverse effect on the cost regulatory measures, establishing effective grievance redressal mechanisms, and promoting transparency in
impacting the financial viability of the project. transactions were essential steps towards restoring faith in the real estate sector and protecting the interests
of homebuyers.
12 Real Estate Unboxed : The Modi Effect, 2014-2024

Real Estate Sector in retrospect

- Journey of past 10 years
The evolution of the real estate sector
in India over the past decade has
been a significant and transformative
process. The industry has witnessed
notable changes and advancements
in various aspects not limited to
regulatory reforms, market dynamics,
technology adoption and consumer
preferences. These developments
have reshaped the landscape of
real estate in India and have had
a profound impact on the way
properties are developed, marketed,
and transacted in the country.

Mapping the Residential Real Estate Transformation Journey

MODERATION TRANSITION CHALLENGING CONSOLIDTION

PHASE PHASE PHASE PHASE
2014 - 2015 2016 - 2017 2018 - 2019 2020 & Beyond

Launches Launches Launches Launches

Sales Sales Sales Sales

- Cost overruns; - Influx of regulatory - Liquidity Crisis - COVID-19

execution delays measures – included short-
- Largely stable
- Bank became demonetization, term aberration
capital values
GST and RERA
cautious
- Improved - Favorable home
- NBFCs emerged - Transition from loan rates
affordability
as key funding unregulated to
- Govt. thrust to - Homeownership
source regulated regime
affordable housing on the consumers
delayed recovery
- Rising unfold continues mind
inventory - Green shots of
- Demand – led - Leading
affordable housing
market, declining developers sell
unsold inventory 1/3rd of the overall
levels residential area
across top 7 cities

HOW THE POLICIES AND

REFORMS CHANGED Key factors that led to the evolution of the Indian real estate sector over the last decade fueled by rapid
urbanization, increasing disposable income, liberal credit policies, allowance of foreign direct investment (FDI)
THE DYNAMICS OF to the extent of100% in real estate, reforms, and stimulus etc. All these factors have impacted the sector not
only in the form of increasing number of launches and sales, but also in terms of evolving buying behavior,
REAL ESTATE SECTOR improved affordability, and an extension of market presence from metropolitan areas to tier-2 and tier-3 cities.
14 Real Estate Unboxed : The Modi Effect, 2014-2024

Various policy reforms have led to RERA STATUS – STATE WISE

significant cleanup in the real estate
sector. S.no State
Projects Registered Agents Registered Complaints
since 2016 since 2016 Resolved since 2016
REAL ESTATE REGULATORY ACT (RERA) 1 Andhra Pradesh 4,617 195 163
The Real Estate (Regulation and Development) Act,
2 Assam 787 66 114
2016 (RERA) is a significant legislation in India aimed
at regulating the real estate sector to safeguard the 3 Bihar 1,572 528 3,251
interests of homebuyers and promote transparency 4 Chattisgarh 1,745 799 1,993
and accountability.
5 Gujarat 13,009 2,666 5,751
Before RERA, the Indian real estate sector grappled 6 Himachal Pradesh 185 117 107
with various challenges: lack of transparency, unfair
practices, project delays, and conflicts between 7 Karnataka 6,646 4,643 1,020
buyers and developers. Homebuyers faced issues 8 Kerala 1,168 574 1,726
like unclear contracts and deceptive advertising,
9 Madhya Pradesh 5,985 1,261 5,839
eroding trust. RERA aimed to address these by
ensuring transparency, timely project completion, 10 Maharashtra 45,128 47,253 16,806
and accountability among developers. 11 Odisha 1,119 195 2,379
12 Punjab 1,259 3,160 3,307
HIGHLIGHTS OF RERA 13 Rajasthan 2,946 8,078 2,432
14 Tamil Nadu 18,915 2,962 2,920
Under RERA, promoters must deposit 70% of project funds in
Escrow Account escrow, allowing 30% for administration costs, ensuring financial 15 Telangana 8,045 3,342 1,092
accountability and transparency in real estate projects. 16 Uttar Pradesh 3,459 6,714 44,602
In compliance with RERA, builders must furnish original project plans 17 Delhi 101 719 645
Transparency and cannot modify them without explicit consent from buyers, 18 Punjab 1,259 3,160 3,307
safeguarding transparency, and integrity in property development.
19 Goa 1,223 467 330
RERA’s unique mandate to sell properties based on carpet area
20 West Bengal* (HRERA) 1,280 419 NA
Fairness rather than high-density area ensures that homebuyers receive fair
and transparent pricing. 21 Haryana (Gurugram & PanchKula) 1,443 5,239 NA
The distinctive provision mandates builders to address buyer issues Total 121,891 92,557 97,784
Quality within 5 years of purchase, ensuring timely resolution within 30 days of
complaint. Source: Respective State RERA Websites,
Compiled by ANAROCK Research
RERA prohibits regulators from engaging in any real estate activities,
Authorisation including marketing, selling unless they are registered with RERA,
ensuring transparency and accountability.

CURRENT STATUS: As of February 2024

Registered Projects Real-estate Agents Complaints disposed-off

1,22,553 86,262 1,20,605

Overall, RERA aims to enhance transparency, accountability, and efficiency in the real estate sector,
thereby protecting the interests of homebuyers and promoting growth and development in the industry.
16 Real Estate Unboxed : The Modi Effect, 2014-2024

SWAMIH Fund GST on the purchase of a flat in 2024

SWAMIH (Special Window for Affordable and Mid- a critical role in the growth of many ancillary industries
Income Housing) Fund, a government-backed in the real estate and infrastructure sector having Residential Property types GST rate till March 2019 GST rate from April 2019
initiative, played a crucial role in addressing the successfully unlocked liquidity of more than INR 35,000 Affordable housing under-construction 8% with ITC 1% without ITC*
liquidity issues faced by the real estate sector, crore.
Non-affordable housing 12% with ITC 5% without ITC*
especially during challenging economic conditions.
other than under-construction
It aimed at providing financial support to stalled This reflects the government’s commitment to ensuring
housing projects in the affordable and mid-income the delivery of affordable housing, benefiting both For ready-to-move-in properties No GST No GST
housing segment, which were cash positive but were homebuyers and developers while contributing to the *ITC: Input tax credit
struggling due to financial deficiencies. It also played overall development of the housing sector in India.
For Metro cities The Property Comes Under Affordable Housing If-Area of the Under-construction House = 60
sq.m. The Price Upto 45 Lakh
As of February 2024

Delivered Projected deliveries

till date in next 3 years

28,000+ 60,000+
Homes Homes

“
State’s Endeavor to ease the Home Buyers’ Burden
The Uttar Pradesh Government implemented the
recommendation of the Amitabh Kant Committee and
expeditiously allowed the registration of the halted housing
projects. Additionally, it also provided to absolve the penal
interest accrues for the period spanning from April 2020 to
March 2023 as a result of pandemic-induced circumstances. SWAMIH FUND
This was a major relief to the home buyers, particularly in
Returns over 25%
the micro markets of Noida, Greater Noida and Yamuna
expressway in the National Capital Region where the buyers
of Capital to
received their homes with legal validation. The innovative move Investors
by the state government has also had a positive ripple effect on
the local economy.

Goods and Services Tax (GST)

The implementation of GST in the real estate industry However, it’s essential to note that the impact of
replaced the complex and cascading tax structure GST on real estate is nuanced, and there have been
with a more streamlined and uniform taxation system, both challenges and benefits. While compliance has
resulted in increased transparency and reduced tax become more straightforward, some initial adjustments
evasion, fostering a more organized and compliant were required by developers and buyers alike. Overall,
marketplace. GST has played a transformative role in bringing about
structural changes in the real estate sector, aligning
Moreover, the input tax credit mechanism under it with the broader goals of a unified tax system and
GST allows developers to claim credits for taxes paid promoting transparency and accountability.
on inputs like raw materials and services. This has
positively influenced construction costs, promoting Taxes on house purchase before GST
efficiency and cost-effectiveness in real estate • Value Added Tax (VAT)
projects. Developers can pass on the benefits of input • Central Excise
tax credit to buyers, potentially reducing the overall • Entry Tax
cost of properties. • LBT
• Octroi
• Service tax, etc.
18 Real Estate Unboxed : The Modi Effect, 2014-2024

GST COLLECTIONS – STATE WISE Demonetization

Demonetization, which took place in India in within the sector. While some aspects of the real
FY23-24 November 2016, involved the invalidation of high- estate market may have benefited from increased
S.no State FY18-19 FY19-20 FY20-21 FY21-22 FY 22-23 denomination currency notes (`500 and `1,000) as transparency, others experienced short-term
(Till Dec 2023)
legal tender. While this was a bitter pill to swallow, challenges due to the disruption.
1 Jammu and Kashmir 3,792 4,010 3,648 4,692 5,245 5,003 it has been instrumental in ushering transparency
2 Himachal Pradesh 7,593 7,960 7,055 8,023 8,778 7,484
3 Punjab 13,977 15,235 13,913 18,406 20,950 17,826
4 Chandigarh 1,778 1,988 1,651 1,979 2,366 2,070
5 Uttarakhand 15,150 14,722 12,339 13,680 16,845 14,359
6 Haryana 55,233 59,560 54,890 68,142 86,669 75,479
7 Delhi 39,845 44,161 36,568 46,253 55,843 49,307
8 Rajasthan 30,721 32,821 31,797 38,480 45,458 36,640 Increased Impact on Slowdown Focus on
9 Uttar Pradesh 61,323 65,281 59,721 73,865 87,969 75,954 Transparency the parallel in Transactions Affordable
10 Bihar 10,755 12,640 11,638 13,534 16,547 12,973
economy Housing
11 Sikkim 1,917 2,248 2,266 2,811 3,155 2,810
Demonetization Demonetization sought The sudden The government,
12 Arunachal Pradesh 398 581 651 710 1,022 962 aimed to bring about to reduce the circulation withdrawal of high- emphasized the
13 Nagaland 227 317 389 420 567 527 a shift towards digital of high-denomination value currency notes promotion of affordable
transactions. currency notes used created uncertainty housing through
14 Manipur 309 435 392 551 615 488
in such transactions, and affected buyer schemes like Pradhan
15 Mizoram 213 296 257 316 419 361 potentially curbing the sentiment. Many Mantri Awas Yojana
16 Tripura 556 680 732 777 883 765 use of unsolicited wealth potential buyers (PMAY). This is aimed
in real estate deals adopted a wait-and- to boost the real estate
17 Meghalaya 1,368 1,522 1,337 1,764 2,076 1,652 watch approach, sector, especially for first-
18 Assam 8,988 10,423 10,030 12,007 13,711 11,297 impacting the volume of time homebuyers.
property transactions.
19 West Bengal 39,780 43,386 39,694 47,898 58,059 46,318
20 Jharkhand 23,916 22,847 20,482 27,854 32,018 25,469
21 Odisha 26,948 29,677 29,844 44,335 49,442 39,539
22 Chattisgarh 22,932 24,160 24,419 29,571 31,968 25,660 Pradhan Mantri Awas Yojana – A Game Changer
23 Madhya Pradesh 25,683 28,354 27,005 31,255 36,232 30,935
Pradhan Mantri Awas Yojana (PMAY), a flagship affordable housing scheme launched by the Government
24 Gujarat 73,440 78,923 74,346 97,155 114,222 91,779
of India in June 2015 as a part of “Housing for All” initiative. The primary aim of PMAY is to provide affordable
25 Daman and Din 1,105 1,155 305 5 3 1 housing to all urban and rural people by the year 2022, which coincides with the 75th anniversary of India’s
26 Dadra and Nagar Haveli 1,718 1,810 2,349 3,141 3,771 3,129 independence.
27 Maharashtra 1,70,289 1,85,917 165,308 217,993 270,346 237,022
PMAY-URBAN PMAY-GRAMIN
28 Karnataka 78,762 83,408 75,660 95,926 122,821 106,117
The urban component of the Pradhan The rural component of the PMAY launched by
29 Goa 4,103 4,280 3,270 4,364 5,522 4,743 Mantri Awas Yojana (PMAY) launched the Government of India. It specifically targets the
30 Lakshdweep 20 20 13 18 21 39 by the Government of India. It aims housing needs of rural areas and aims to provide
to address the housing shortage and affordable housing to every rural household in
31 Kerala 16,343 19,234 17,349 22,264 27,371 22,615 provide affordable housing solutions India with a pucca house, and basic amenities, to
32 Tamil Nadu 70,562 74,430 69,121 85,492 104,377 90,995 to the urban poor and marginalized all houseless householder and those households
33 Puducherry 1,924 1,871 1,646 1,824 2,373 1,946
sections of society. living in kutcha and dilapidated house.

34 Andaman and Nicobar Islands 297 361 255 332 373 322
As part of the comprehensive ‘Housing for All’ (HFA) initiative, PMAY-Urban stands out with its Credit Linked
35 Telangana 36,408 39,820 36,346 45,081 51,831 43,885
Subsidy Scheme (CLSS), offering a unique advantage to individuals seeking home loans. This innovative facet
36 Andhra Pradesh 25,331 27,108 26,163 32,710 40,233 32,950 provides an interest subsidy of up to Rs. 2.67 lakh, empowering eligible beneficiaries to secure, construct, or
37 Ladakh - 5 114 207 333 357 reacquire homes under the PMAY-Urban umbrella. Meanwhile, PMAY-Gramin extends financial aid to the
homeless and those in dilapidated dwellings, facilitating the construction of sturdy homes. In plains regions,
Total 703,415 755,729 859,315 1,093,835 1,320,434 1,119,778 beneficiaries receive support of up to Rs. 1.2 lakh, while those in challenging terrains like the North-East, hilly
areas, Integrated Action Plan (IAP), and other difficult regions can access up to Rs. 1.3 lakh, underscoring the
Notes: *Excludes Other Territory, Center Jurisdiction, IGST and Cess.
Source: Ministry of Finance, PIB, ANAROCK Research
program’s inclusive approach to housing development.
20 Real Estate Unboxed : The Modi Effect, 2014-2024

CURRENT STATUS* EMERGING ALTERNATE ASSET CLASS

Pradhan Mantri Awas Yojana- Urban (as of 19/02/2024)
Construction of Houses (Nos. in Lakhs)

DEMAND SANCTIONED GROUNDED COMPLETED

112.24 118.63 114.09 80.35 WAREHOUSING

INDUSTRIAL & DATA
CO-LIVING
STUDENT SENIOR
LOGISTICS CENTRES HOUSING HOUSING

(150+ Mn sq.ft (11 Mn sq.ft. across (5.7 Mn beds by ( `6 Lakhs (The elderly
Pradhan Mantri Awas Yojana- Gramin (as of 27/02/2024) Grade a Stock India, 13 Mn sq.ft. 2025, 36% Increase additional beds in population to rise
across India) to be added in from the current) next 3-4 years) 41% over the next
Construction of Houses (in Nos.)
next 3 years) decade)

Technology Adaption
MORD TARGET REGISTERED SANCTIONED COMPLETED
The adoption of technology in the real estate sector However, the sector also faced challenges such
2,95,00,000 3,24,30,262 2,94,85,784 2,57,21,462 over the last decade reflects a broader trend toward
modernization, efficiency, and a more dynamic and
as liquidity issues, project delays and the impact of
the COVID-19 pandemic. Despite these challenges,
interconnected industry. Along with online listing technological advancements, digital platforms,
platforms, the new concept such as virtual property and innovative construction methods have been
tours and digital marketing have become integral to embraced, indicating a gradual modernization of the
the real estate ecosystem, providing potential buyers real estate sector in India.
and tenants with convenient and comprehensive
Key trends that shaped the last decade of Indian real estate sector access to property information.

The emergence of PropTech (Property Technology)

has introduced innovative solutions such as Government initiatives
blockchain for secure and transparent transactions, such as RERA (Real Estate
AI-driven analytics for property valuation, and smart
Regulation and Development
AVAILABLE
home technologies for enhanced living experiences.
SUPPLY 2014 These advancements not only streamline processes Act) played a pivotal role in

2,931,810 2014 – 2023

SALES
698,200
Units INVENTORY but also improve efficiency and reduce the time
required for transactions.PropTech Startups account
bringing transparency and
accountability to the industry,
Units for 6% of the total recognized startups.
2,827,560 2014 – 2023
2023 instilling greater confidence
Units 600,200 among homebuyers. The rise
Units Proptech Recognised Startups
of Smart Cities and Increased
1600
1,434 Urbanization led to a surge
1400 in demand for residential
1,203
1200 and commercial spaces. The
968
1000
807
focus has shifted not only to
800 metropolitan areas but also
AVERAGE to the development of tier-2
600 518

2014
LUXURY 400 and tier-3 cities, reflecting a
`5,440/ sq. ft PRICE SEGMENT
247

INVENTORY 200 2
broader vision for sustainable
2023
`7,080/ sq. ft
2016
OVERHANG
2018
9% of supply
GAINING 0% urban growth in the country.
MOMENTUM
2016 2017 2018 2019 2020 2021 2022
40 Months
2023 Source: Startup India; Compiled by ANAROCK Research
2023 23% of supply
15 Months
22 Real Estate Unboxed : The Modi Effect, 2014-2024

Residential Sector: Demand-Supply Dynamics

The residential market in India has witnessed considerable transformations over the past decade. Since the
beginning of 2014, this sector has navigated through phases of expansion and contraction, influenced by a
multitude of factors. These include global and domestic economic scenarios, government regulations and the
unprecedented COVID-19 pandemic.

Nevertheless, one aspect that has persistently remained unchanged is the accelerating demand for housing,
which was more pronounced with the implementation of each positive change. Periods of robust economic
expansion, coupled with a rise in disposable incomes, have amplified the need for housing.
Between 2014 and 2023, the top 7 cities in India observed a cumulative housing supply of approx. 29.32 lakh
units. Notably, the year 2014 marked the pinnacle with the highest number of new launches, totaling nearly
5.45 lakh units. Subsequently, there has been a consistent year-on-year decline in the new housing supply,
reaching 1.46 lakh units in 2017. Nevertheless, the trend reversed with policy interventions and government
initiatives during the pivotal year of 2016-2017.

Sales have aligned with the trend observed in new launches. The total number of homes sold in the top 7 cities
over the past decade surpassed the 28.27 lakh mark, with the lowest sales of nearly 1.38 lakh units recorded
during pandemic.

FEARLESS REGULATED CONTROLLED+OUTLIER MASSIVE REVIVAL

- Supply: 10 - Supply: ~7.9 - Supply: ~5.6 - Supply: 10 Lakh Units

Lakh+ Units Lakh Units Lakh Units
- End-user driven, Long-
- Largely - Investor driven, - End-user driven term investors re-enter
investor- End-users Re-
- Regulated - Regulated
driven enter
- Corporate - Corporate houses
- Unregulated - Towards being
Houses rising dominating
regulated
- Localized, presence
Landlord - Localized, entry
driven of corporate
houses

600,000
476,520

RERA, Demonetization, GST, IBC Liquidity crisis, COVID-19

500,000
364,870

No. of units
400,000 342,900

308,250
318,400
236,520
300,000 261,360
52 239,260
248,310

138,340
200,000 211,140

100,000

0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Previous New
RESIDENTIAL REAL ESTATE MARKET Peak Supply Absorption Peak

PERFORMANCE POST REFORMS Source: ANAROCK Research

Note: Data for top 7 cities of India
24 Real Estate Unboxed : The Modi Effect, 2014-2024

Capital Value trends – Housing prices across Pan India up 15% Year on Year Residential Sector: Completions
Residential property prices have also registered a significant growth in tandem with demand across the top 7 As a result of aforesaid policy interventions, many large developers have focused on completing stalled
cities. During the last 10 years, average housing prices have appreciated in the range of 25%-60% across the projects along with new launches. Sustained high demand for housing led to increased sales and improved
top 7 cities primarily due to an increase in the input costs and strong demand. cashflows in the hand of developers. Approximately 2.5 lakh housing units were completed during 2018; is
expected to touch completion of 5.3 lakh units by the end of 2024. There was an 8% annual increase in housing
unit completions in India’s top 7 cities during 2023, reaching 4.35 lakh units.
Average Capital Value
7,500
7,080 Completions (‘00,000 units) 5.3

7,000 Controlled Price movement as the

4.4
sector was aligning to the reforms.
Price (INR/Sq.ft)

4.0
6,500
6,150
5,830 3.0
5,640 5,670 5,690 2.8
6,000 5,560 5,600 5,600 2.5
5,442 2.1
Significant price rise with
5,500 escalating demand

5,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Note: Base Selling Price on BUA*

Source: ANAROCK Research 2018 2019 2020 2021 2022 2023 2024 (Est)

Average Capital Value Affordability Trends

16,000
50 Affordability Trend
48
14,000
44

(Home loan payment/income)

38
12,000 36
34

Affordability ratio
33
Price (INR/Sq.ft)

30
27 28
10,000

8,000

6,000

4,000
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

2,000 Source: Compiled by ANAROCK Research

0
NCR Kolkata MMR Pune Hyderabad Chennai Bengaluru

2014 2023

Note: Base Selling Price on BUA*

Source: ANAROCK Research
26 Real Estate Unboxed : The Modi Effect, 2014-2024

Available Inventory – Pan India Inventory Overhang at its

lowest in last 10 years - 15 Months at the end of 2023
Comparing available residential inventory from 2014 to 2023, cumulative available units across the top 7 cities
are down by 14% from 6.98 lakh units at the end of 2014 to nearly 6 lakh units at the end of Dec 2023. Maximum
unsold units were recorded at the end of 2016 when over 7.90 lakh units were available for sale in top 7 cities.
Pan India inventory overhang stood at 15 months at the end of 2023 witnessing a positive decline from 40
months in 2016, when available inventory was at its peak.

Available Inventory

900,000 60

55
800,000
50

700,000
Available Inventory (units)

Inventory Overhang (Months)

600,000
41 40
40

500,000 33 32
30 30
30
400,000
24

300,000 21 20

200,000 15
10
100,000

0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Available InventoryI nventory Overhang

Source: ANAROCK Research

Note: Data for top seven cities of India

With continued focus on infrastructure development, digitalization and policy reforms over the past decade has unleashed
the potential of residential real estate sector in India. Going forward, the policies aimed at promoting affordable housing
and easing regulatory hurdles can bring more action into the sector.
28 Real Estate Unboxed : The Modi Effect, 2014-2024

Sales Share Analysis:

Organized players’ dominance is rising

Sales Share Analysis

120%

100%

CONSOLIDATION IN 80%
THE SECTOR
60% 83% 79% 76% 71% 65% 71% 66% 66%

Traditionally characterized as fragmented, the real

estate market in India has been dominated by 40%
numerous small and medium-sized developers working
autonomously. Nevertheless, in the last few years, a 12%
discernible trend toward consolidation has manifested, 20% 13% 12% 19%
14% 20%
giving rise to larger and more organized entities within 11% 12%
17% 23%
the industry. This consolidation can be attributed to 11% 16% 17% 34%
6% 9% 15% 14%
structural reforms and factors including more stringent 0%
regulatory frameworks, heightened competition, and FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 FY24
evolving preferences among buyers.

Over the past six years, the share of listed and leading Listed Developers Leading Unlisted Developers others
developers in sales has doubled, rising from 17% to 34%
as they continue to dominate the market. Source: ANAROCK Research
Note: Data for top seven cities of India
30 Real Estate Unboxed : The Modi Effect, 2014-2024

OUTLOOK
The real estate sector presents a landscape ripe with potential,
characterized by significant growth opportunities and evolving
trends. By 2030, the sector’s market size is estimated to touch
USD 1 trillion, with an expected contribution of 13% to the
nation’s GDP by 2025.

The industry’s strategic evolution towards a balanced future will

harmonize with economic realities, underscoring its resilience
and adaptability. Anchored by government’s stability, steady
interest rates, burgeoning employment opportunities, and
heightened private investment, the sector will envision a
conducive environment to sustainable and resilient growth.

Government initiatives play a pivotal role by directly and

indirectly benefiting residential markets, creating a symbiotic
relationship between economic policies and real estate
dynamics. To sustain the positive momentum, some of the
measures such as granting industry status to real estate, further
empowering RERA, implementing a streamlined single-window
clearance mechanism for housing projects, allocating an
additional tranche of the government’s contribution to the
SWAMIH Investment Fund are need of the hour.

Resulting from the required initiatives, Affordable housing is

likely to emerge as a significant driving force, underpinned
by favorable factors such as low non-performing assets in
home loans and the potential for interest rate adjustments.
Moreover, infrastructure development to enhance connectivity
is expected to have a positive impact on the residential real
estate development in tier II & III cities.

PropTech adoption is likely to further revolutionize property

transactions through innovative technologies instilling efficiency
and trust. This transformative wave may promise a bright outlook
for the real estate sector, with developers and investors eagerly
anticipating significant shifts in coming years.

Recognizing the catalytic impact of real estate, sustained

government’s stability stands as a cornerstone, paving the
way for seamless and enduring growth within the sector while
fortifying its indispensable position in the overarching Indian
economic landscape.
 About NAREDCO

The National Real Estate Development Council (NAREDCO) was established in 1998 as an autonomous self-regulatory national body under the patronage of the Ministry
of Housing and Urban Affairs, Government of India. Shri Ram Jethmalani, the then Hon’ble Union Minister of Urban Affairs and Employment, played a pivotal role in its
establishment. Shri Hardeep Singh Puri, Hon’ble Union Minister for Housing and Urban Affairs, Govt. of India, serves as the Chief Patron of NAREDCO, with Shri Hari Babu
as President, Dr. Niranjan Hiranandani as Chairman and Shri Rajan Bandelkar as Vice Chairman. NAREDCO aims to uplift and streamline the Indian realty sector, providing a
legitimate platform for the government, real estate industry, and general public to address concerns and find effective solutions. The organization aims to raise the standards
of operations related to building, construction, and marketing in the real estate sector, while participating in the formulation of national policies for fiscal reforms and boosting
economic development by acting as a catalyst in the Indian real estate industry.

NAREDCO’s structure comprises National, State, and City Councils, ensuring that the policy
recommendations by NAREDCO are a true reflection of ground realities and capture the geographical spread. Currently, NAREDCO has over 10000+ members pan India with
its State NAREDCO chapters.

As NAREDCO completed its 25th year of inception, it intends to step up its efforts to bring about transformational changes in the real estate sector, by addressing the
challenges faced by the industry, promoting financial stability, and strengthening skilling initiatives. NAREDCO has also launched NAREDCO Nextgen and NAREDCO Mahi to
provide a platform for young budding real estate & professionals and women entrepreneurs to share, network, and learn about the emerging trends in the field of innovation,
sustainability, and inclusivity. It has also formed a NAREDCO Finance Committee to address financial challenges being faced by the real estate industry. NAREDCO has also
started National Institute of Real Estate Development (NIRED), a unique initiative to provide training and skill development opportunities to the real estate workforce, and act
as a research station on real estate matters.

NAREDCO has been instrumental in fostering growth and development in the Indian real estate sector by organizing various events aimed at promoting excellence and
maintaining high standards. Its efforts have significantly contributed to the overall progress of the industry. NAREDCO is committed to implement the Govt. initiated
programmes and policies and is committed towards India achieving the 05 trillion USD economy by 2025.

About ANAROCK

ANAROCK is the leading independent real estate services company with a visible presence across India and the Middle East. The
Company has diversified interests across the real estate lifecycle and deploys its proprietary technology platform to accelerate
marketing and sales on behalf of its clients.

Over the last six years, ANAROCK has expanded from being a residential-focused organization to complementary sectors
including retail, commercial, hospitality, logistics & data centres, industrial and land. The firm also specialises in strategic advisory,
investment banking, research & valuations and offers app based flexible workspaces and society management services. ANAROCK
has developed proprietary technology that is adopted across all its businesses.

ANAROCK has a team of over 2200 experienced real estate professionals who operate across all major markets in India and the
Middle East.

Please visit Follow us on

www.anarock.com

AUTHOR: Ashim Bhanja Chowdhury | Vice President - Research

Simmi Arora | Senior Manager - Research
Kushal Vilas Datrange | Research Analyst

EDITOR: Priyanka Kapoor | Vice President - Research

CREATIVE VISUALIZER: Viraj Shah | Senior Manager - Corporate Marketing

DESIGNER: Aditya Kakodkar | Senior Associate - Corporate Marketing

Karan Sharma | Assistant Manager - Corporate Marketing

For bespoke research requirements, please connect with

Prashant Thakur
Regional Director & Head of Research | prashant.thakur@anarock.com

ANAROCK Property Consultants Pvt. Ltd.

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