Backed by strong regulatory mechanism and massive housing schemes, the real estate sector in India should get a fresh lease of life in 2018. The government of India, under its ‘Housing for All by 2022’ mission, has set an ambitious target of providing at least 2 crore homes by year 2022 and half of these are expected to be completed by 2019.

Clearly, with 2018 the sector will usher into an all new phase of growth and development wherein affordable housing will be the name of the game. The backdrop has already been set. Both public and private sector players are geared up for action.

Almost every major real estate developer has launched or is about to launch affordable housing projects. Funds have begun to flow. The likes of HDFC have already created a $1 billion affordable housing fund while there are several fund houses that have announced multi-million dollar funds in this space.

After Private Equity (PE), the Sovereign Wealth Funds from countries such as the US, Canada, Japan, Singapore and the Netherlands are the second largest source of capital inflows in the real estate sector from overseas channels, and a major part of these funds are marked for affordable housing projects in India.

It didn’t start all of a sudden. The stage was set when the government placed an unprecedented focus on the housing sector from 2015. The ‘Affordable housing for all by 2022’ was launched in June 2015. However, the private sector did not take much interest in this program. Building affordable homes was perceived as a low-scale, low-profile work with limited profitability. Thus, it all remained in the cold bag until the mid of year 2017.

Since then we have seen Benami Transactions (Prohibition) Amendment Act, 2016 been enacted; by the end of 2016 we witnessed a ground-shaking step like demonetization which aimed to merge the cash-based parallel channels into the mainstream economy. Immediately after that, in May 2017, the Real Estate Regulatory Act (RERA), which was moved from one end to another for the past so many years, got implemented.

Now the program has gained traction. To my mind, it was all planned and it is actually going to work for all the stakeholders: home buyers, developers, fund houses and our country at large. The tenet of ‘roti, kapda aur makaan’ is more than a fancy phrase. It is taking shape. If we succeed in providing shelter to 2 crore families in the next 5 years, imagine the magnitude of change. Several lakh crores will come into the economy via the housing sector. Millions of people will buy homes, and millions of people will get employment opportunities in the real estate and construction sector as well as the allied industries such as cement, steel, iron, engineering, architecture, décor, so on and so forth.

Today, the overall real estate sector is pegged at $130 billion, i.e. Rs 8.4 lakh crore (1US$=INR64), contributing 5-6 percent to the GDP. Now just estimate the volume of growth factoring in all the above factors! You will surely understand why I am so upbeat about the coming times!

(By Honey Katiyal, Founder & Chairperson, Investors Clinic)