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What Are The Real Challenges For Real Estate Industry In India?

31st May, 2019
What Are The Real Challenges For Real Estate Industry In India?

The real estate sector in India has made some amazing progress over the past decades. It has turned out to be one of the fastest developing markets in India. This development is happening all because of the fast urbanization and rising salary levels. It isn`t just effectively drawing in household land speculation but also for foreign investments as well. Moreover, the Government has encouraged this populace by presenting plans that were both developer and buyer cordial. In this way, the financial organizations began providing loans to the individuals all the more insightfully and all the more considerably. The real estate market in India is in its full galore. However, in spite of the positive future for the real estate industry in the coming years, it is facing many combating challenges. These difficulties limit the part from yielding full advantages of the potential development which is going on. In addition, it is creating issues, for example, expanding needs of people for housing however reducing undertaking projects in semi-urban areas and reducing interest in urban zones. This points towards some serious issues through which the Indian real estate sector is going at present.


The real estate industry is a sector in which the cost of work creates an initial obstacle in the development of the projects in focus. Developers majority of the time face challenges with funding. Due to the increase in the number of frauds, commercials banks have become more restrictive in lending money to the developers. Lack of your renowned name in the industry also does not allow developers to access funds at an affordable rate.

Project delays

To commence any housing project in a metro city, a developer needs to complete many approvals for starting the construction. Developers usually have this tendency to utilize the funds of one project for another due to some underlying factors. Many developers start advertising their upcoming project beforehand to attract customers. However, due to lack of funds, litigation, failure to procure necessary licenses many construction projects stop halfway which causes a delay in completion of the project on time. This creates issues for the buyers who fail to get their property on time and are faced with the burden of repayment of their loans.

Innovations in projects

As societies change with time, their requirements and expectations also change. For example, individuals have various desires from apartments, neighbourhoods, townships, office zones, shopping centres, theatres, and so on. The degree of progress is frequently a statistic and a monetary parameter and is additionally identified with different innovations and the level of involvement of more up to date advancements. In this situation, real estate companies need to figure out the meaning of their products and guarantee that they will bring advancement in their projects.

GST Rate

In the Indian market, property prices have increased in such a way that it has gone beyond the buying capacity of a common man. Earlier, taxes were accounted for 30% of the total cost of a property. However, with the introduction of Goods and Service Tax (GST), the tax on under-construction properties have reduced a lot. But, the stamp duty and registration charges are not included in GST so they are creating an additional burden on the buyers. Two major challenges which have recently been tended in the real estate sector are tax structures with the usage of GST and execution of Real Estate Regulatory Authority (RERA) bill. The real estate market is facing with tremendous barrier because of high GST rate.

Experts believe more attention should be paid by the Government in tackling these challenges. Hoping for a complete recovery and rapid growth in 2019 for the real estate sector.