As we bid adieu to 2019, and march on, to not just a new year but a new decade, it is time for us to sit back and reflect on the roller-coaster path that the real estate industry has been through in the past decade.Anyone who has been an investor in the real estate industry over the last ten years is aware of the tumultuous highs and lows faced by the industry and therefore, It is important to analyze the performance of the industry as the forecast for the next couple of years depends on the overview of the preceding decade.

The real estate industry over the last ten years has seen a massive shift. For example, an investor in the industry in 2010 after thorough deliberation would only think of investing in a residential space, ten years on investors have gone on to invest in office spaces and co-working spaces. The hunger for investing in the sector does not just stop at that, investors are also actively investing in REITs.The investments are not just limited to domestic players but extend to foreign investments. According to data, India's real estate market attracted USD 3.8 billion private equity investment from January to September 2019, a nearly 19% yearly rise.

It is important to note that the investments were not just limited to equity, but the past ten years have also seen a massive rise in property purchases. The industry in India which once grappled with profuse unscrupulous and unethical players loomed out of darkness aided by Real Estate (Regulation and Development) Act, implemented by the government in 2016. Although other acts, for example in Maharashtra, the Maharashtra Ownership Flats Act and the Maharashtra Regional Town Planning Act already existed to bring in transparency and discipline in transactions of flats by putting a check on malpractices, the RERA made the provisions far more stringent for the developers and beneficial to the flat buyers. Through this article, let's take a panoramic view of the changes that shaped the industry in the preceding decade.

Segmented market:

This decagon saw the industry getting divided into two-premium and affordable segments by developers. The demarcation of the market immensely helped the low and middle-income groups to fulfill their dream of buying their own home, which before segmentation was a far fetched dream. Not only was the common man benefitted, but the segmentation also paved the way for new developers to come into the market solely dedicated to the affordable segment. As per data, around 90% demand for residential spaces comes from this segment.

Online portals

In the last ten years, one of the most notable changes our country has witnessed is the digital boom. Easy and cheap access to net connectivity has given rise to a lot of online portals, dedicated to aiding new homebuyers by providing them with correct information, helping many to escape from corrupt players in the market. Technology has also developed leaps and bounds opening doors to automation, data analytics, data mining, artificial intelligence, virtual reality, and machine learning. Developers are increasingly shifting their focus towards customer-centricity and customisation to make the home buying experience as easy as possible for homebuyers.

RERA(Real Estate Regulation and Development) Act:

Long before the Real Estate (Regulation and Development) Act 2016 (RERA) came into existence, home buyers were protected by other acts, however, none proved to beas beneficial for homebuyers as RERA has been. In states like Maharashtra, homeowners were protected by the Maharashtra Ownership Flats Act (MOFA) of 1963 before RERA came into effect.MOFA, just like the Real Estate (Regulation and Development) Act 2016 aims at protecting the interest of flat purchasers by bringing in transparency and discipline in transactions of flats by putting a check on malpractices.

However, RERA has brought back the trust of homebuyers in the market by consolidating the sector and plucking out unscrupulous players. If we take a closer look at both the acts, it is evident thatMOFA mostly covers only structural defects in a building or if any defective material has been used. Whereas, under RERA action is taken even in cases of defect in workmanship, quality, provision of services, or any other obligation that was made at the time of agreement for sale along with structural defects. Therefore, increasing the scope ofdefects that homebuyers can seek redressal for. Therefore, increasing the scope ofdefects that homebuyers can seek redressal for. Under the MOFA, there was no specific time period within which the promoter had to rectify the defect or give compensation for it, but RERA has a specific duration within which the promoter has to rectify the defect or pay compensation.The RERA Act also established the institution of a reliable, speedy redressal mechanism.

The act enables homebuyers to register a complaint against promoters and the authority resolves the matter within 60 days. The MOFA Act is an important piece of legislation as it lays down the responsibilities of real estate developers and builders with respect to flats sold by them and conversely the rights of flat purchasers within the State.

However, the RERA has made the provisions far more stringent for the developers and beneficial to the flat buyers. In short, by offering homebuyers a coherent redressal system, RERA ensures that builders are held accountable for all their promises and offers which other existing laws failed to address transparently.

REITs:

Private equity investment in real estate asset class was the trend two decades back, this decade we saw the emergence of real estate investment trust. REIT is a type of company that lets investors pool their money to invest in a collection of properties or other real estate assets.

REITs operate in a manner comparable to mutual funds as they allow for individual investors to acquire ownership in commercial real estate portfolios that receive income from properties such as apartment complexes, hospitals, office buildings, timberland, warehouses, hotels and shopping malls. REITs have become the talk of the town because of their ability to generate higher returns than equity markets over the long term. Experts believe that with India witnessing its first successful REIT listing this year, people will be able to witness its growth which eventually will pave the way for more such listings.Positive points such as mandatory valuations, regular updates, research coverage and disclosures relating to assets managed by REITs are seen bolstering investor sentiment towards this particular asset class in the future.

Green Buildings:

With the advancement in every field, people throughout the last decade also realised the importance of sustainability and preserving the environment more than ever before. India witnessed its green building movement in the year 2001, from which it has come a long way in the past ten years.As per a leading national daily, the Indian Green Building Council (IBGC) aims to make India a global leader in energy-efficient buildings by 2025. The report also mentioned that last year, India had crossed the 7 billion sq.ft. of green building footprint and aims to go past 10 billion sq ft by 2022, which will displace the US and China to take the lead position.

It is true that the Indian real estate industry has undergone some of the biggest headwinds in the last ten years in the form of demonetisation, RERA, and GST, which have altered the functioning of the industry drastically. However, it is important for us to note the positive changes that have and will continue to make the industry far safer and transparent for home buyers. Experts believe, moving forward, India's economic transition, workforce expansion, and urbanisation will further boost investment opportunities in the real estate sector in the next decade.