Better times ahead for real estate investors?

Indian investors have a bittersweet history with real estate. While Indians have always had a soft spot for real estate as an asset class, the segment has been rather infamous for its scams and crooked players. So, to say it needed some regulatory changes would be downplaying it. And the changes did come. Demonetisation, changes in tax laws, the Real Estate Regulation Act (RERA), etc., all gave the sector the much-needed shake-up. And considering that the pandemic followed this rewriting of the industry playbook, most expected a slowdown. So no one was surprised when the BSE Realty index gave humbling returns of 7.8 per cent per annum in the last five years and 6.7 per cent per annum in the last 10 years. In contrast, the BSE Sensex has returned 12.1 and 12.5 per cent per annum, respectively, over the last five and 10 years. Building towards a better future Despite the rather gloomy history, the recent numbers hint towards a brighter future for the real estate sector. FY22's massive surge in bookings can be taken as a sign of better times ahead. For the uninitiated, bookings (in the real estate world) represent the value of land or property sold by the industry to folks like us.

This article was originally published on April 13, 2023.