Stating that technology will play a pivotal role in building the future of the real estate industry and help facilitate 'Ease of Doing Business', Housing and Urban Affairs Secretary Durga Shanker Mishra said on October 21 that the online building permission system, which has so far been implemented in about 2,500 cities, will be made operational across cities by March next year.
"At present, online building permission system has been made operational in around 2,500 cities resulting in reduction in compliance cost and time. I am confident that by March next year, we will implement this system 100 percent in all cities," he said addressing a real estate conference organised by CII and JLL India on What’s Next: The Future of Real Estate.
The online system has been fully implemented in 19 states and Union Territories (UTs) and will soon be operationalised across all 36 states and UTs, he said.
He said in the World Bank's ease of doing business report, under the construction permits category, India's rank has jumped to 27th out of 190 nations from 181st position last year.
He further said that real estate is a consumer industry and technology should therefore be used to the optimum level. This has also been one of the most important learnings during the pandemic, he noted.
The secretary asked builders to adopt technology in the construction of projects as well as sales operations.
Mishra said that the real estate industry had been impacted after the outbreak of the COVID-19 pandemic in March last year, but sales and launches revived during the October-December quarter of 2020 and the January-March period this year.
The second wave again impacted the sector during the April-June quarter of this year but the revival has started from September. The Indian economy is witnessing "V-shaped recovery", he said, adding the economic growth will aid a fast revival in housing demand.
Elaborating on the government’s initiatives such as the Pradhan Mantri Awas Yojana - Urban (PMAY-U) to achieve 'housing for all' in the country, he said that so far 1.14 crore homes had been sanctioned and work had commenced on 89 lakh homes. He said around 52 lakh homes have already been completed.
"We have committed Rs 1.85 lakh crore for this scheme and out of that Rs 1.13 lakh crore has been already provided," he said, adding works on the remaining homes under this scheme will be completed in the next two years.
Talking about reforms in the real estate sector, Mishra said the Real Estate (Regulation and Development) Act, known as RERA, has been implemented across all states except Nagaland and the legislation has brought confidence and trust in this important sector of the Indian economy.
He said around 70,000 real estate projects and 55,000 property agents are registered under RERA, while about 75,000 cases have been resolved by the authority. The Model Tenancy Act and Affordable Rental Housing Complexes (ARHC) initiative would also open up new opportunities for the real estate players.
On the Model Tenancy Act, he said it had been adopted by a few states and hoped the remaining states would follow suit.
Renu Sud Karnad, MD, HDFC Ltd, said that after the pandemic, technology had enabled real estate developers to showcase their properties online and had improved the quality of walkthroughs. Greater use of technology is expected to change the face of the real estate sector.
“Currently, the real estate sector spends less than 1.5% of its revenues on technology. Technology also helps housing become affordable. However, execution of property documents, where the buyer’s physical presence is still required, remains a challenge,” she said.
Neel Raheja, Chairman, CII National Committee on Real Estate & Housing and Group President, K Raheja Corp noted that foreign money has flown into the real estate sector. Until now it was more concentrated in commercial and retail real estate but now it has started spreading across verticals. Transparent and efficient developers are expected to benefit from it.
Commercial real estate to touch 2019 levels by 2022: Experts
Speaking on the topic Future of Commercial Real Estate: Rebuilding to Enhance Resilience, Irfan Razack, Chairman & MD, Prestige Group said that work-from-home will not be permanent and the commercial real estate segment will touch 2019 levels by 2022.
Sriram Khattar, MD, DLF Rental Business said that the trends pertaining to return to the office are positive. “In the next two months, return to office is expected to gather pace,” he said.
Sanjay Dutt, MD & CEO, TATA Realty and Infrastructure Ltd, noted that it is important to focus on ‘relevant supply’ as of the 57 micro markets, developers would perhaps want a presence only in 12 markets and that there is no speculative supply competing with Grade A supply anymore. He also said that 55% of office absorption that has taken place has been in the non-IT sector and it is important for the sector to balance its commercial portfolio. “We need to diversify asset classes,” he said.
The conclave saw the launch of the CII-JLL research report titled ‘The Future of Indian Real Estate: Charting new growth in times of new realities”.
“The pandemic did halt much of the industry’s growth, however, there are lots of green shoots emerging and transforming the future of all asset classes with multi-fold opportunities. Today, real estate has come to the centre of the board discussions and is redefining business growth strategies. Commercial real estate has shown resiliency in 2021 and is likely to gain momentum in 2022,” said Radha Dhir, Chairperson, CII Realty & Infrastructure Conclave, CEO & Country Head, India, JLL.
“Structural changes such as an increasing middle class, accelerating e-commerce, technological innovations, and advancements in sustainable solutions are propelling the demand for logistics and industrial growth. Non-traditional forms of real estate assets like data centres, healthcare, life sciences educational institutions, senior living, co-living, and student housing–have become increasingly popular. Macroeconomic drivers such as urban growth, adoption of the Internet and smartphones, and an aging population underpin the need for these alternative assets,” she added.