REAL ESTATE

Presented By:
Ashutosh Mishra
Apoorva
Garvit
Ritika Agrawal
Sushil Tripathi
Introduction

 Economy of India is the eleventh largest in the world by nominal

GDP and the fourth largest by purchasing power parity(PPP).
 Real Estate in Delhi has beckoned many foreign investors with 100% FDI
in the Real Estate sector. The capital city boasts of an International airport,
plenty of five-star hotels, vast rail network augmented by state-of-the-art
Delhi Metro, efficient road links, malls , multiplexes and major government
offices.
 The real estate sector in India is presently worth USD15 billion and it is
growing at a phenomenal rate of 30% per year.
 This sector is the second largest employer in India, after the agricultural
sector. Having attained maturity, the real estate sector is attracting huge
investments, especially FDI. The humongous property developments in
residential, commercial and retail sectors are testimony to the fact that
Indian real estate is growing at lightning speed.
Major Players

ANSAL

ASHIYANA
RETAIL
HOUSING

OBEROI

UNITECH

REAL ESTATE INDUSTRIAL

OFFICE DLF

HDIL

INDIA BULLS

RESIDENTIAL OMAX

JP INFRA
 POLITICAL
PEST Analysis

Political factors, are how and to what

degree a Political Economicin the
government intervenes
economy. Specifically, political factors
include areas such as tax policy, labor law,
environmental law, trade restrictions,
tariffs, and political stability
Social Technological
RBI has declared concessional
schemes
• Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA)
repealed by increasingly larger number of states.
* In case of integrated townships, the minimum area to be
developed has been brought down to 25 acres from 100
acres.
* 51 per cent FDI allowed in single-brand retail outlets and
100 per cent in cash-and-carry through the automatic route.

* Full repatriation of original investment after three years.

* Minimum capital investment for wholly-owned
subsidiaries and joint ventures stands at US$ 10 million
and US$ 5 million, respectively.
* 100 per cent FDI allowed in realty projects through the
automatic route.
Government initiative- tax holiday on profits from initiates
in the financial year 2007-2008
• In order to enjoy this benefit, the housing projects should
be of the affordable housing unit type of 1000 to 1500
square feet
• Another condition is that such projects should be
completed by March 1, 2012

Finance Ministry has allocated US$ 207 million to grant 1%

interest subsidy on home loans up to US$ 20, 691
• In order to avail this benefit, the cost of the home should
not be above US$41, 382
• It is believed that these initiatives will be add further
impetus to the real estate sector in the country
 ECONOMIC
PEST Analysis

Economic factors include economic

Political Economic
growth, interest rates, exchange rates and
the inflation rate. These factors have major
impacts on how businesses operate and
make decisions.

Social Technological
• The housing sector would grow at 14% a year and create over
new3.2 million jobs over the next 10 years
• As the GDP increases the real estate prices also increases because
there is a high degree of Positive correlation between the real
estate prices and GDP
• Real estate prices also increases with increase in the per capita
income as there is high degree of positive correlation between these
two also
• The infrastructure of India is also growing day by day so it adds to
the better facility to different sectors which affect the real estate
prices
• The FDI into the country affects the real estate FDI and real estate
having a positive correlation leads to the boom in this sector.
Increase in FDI from 2006 to march 2007 is 10%. Earlier it was
16% and now in 2008 it is 25%
• The outsourcing and IT/ITES industry have contributed
to the demand for quality office-space
• The estimated demand from IT/ITES sector alone is
expected to be 150mm sq. ft. of space across the major
cities by 2010
• The interest rate also affects the real estate prices because
it affects the lending and borrowing by the investors
 SOCIAL
PEST Analysis

Social factors include the cultural

Political aspects and
Economic
include health consciousness, population
growth rate, age distribution, career attitudes
and emphasis on safety. Trends in social
factors affect the demand for a company's
products and how that company operates
Social Technological
• House buyers have a lot of thing to consider and not just
the price of the property
• There are several social factors that people should
consider when buying a house
• First- noise level inside the house emanating from the
outside
• Note down the vehicular traffic noise that emanates form
the outside as well
• quality in the neighborhood
• surrounding restaurants and manufacturing plants around
the area
• distance of the house from your work and children’s
schools
 TECHNOLOGICAL
PEST Analysis

Technological factors include technological

aspects Political Economic
such as R&D activity, automation,
technology incentives and the rate of
technological change. They can determine
barriers to entry, minimum efficient
production level and influence outsourcing
decisions. Furthermore, technological shifts
Social
can affect Technological
costs, quality, and lead to
innovation
• Potential clients are far well informed since they are able to
harness the power of the Internet to access information
• Bringing down operational costs, improving customer
relationships and reaching out to online prospects on the
internet
• Customer Relationship management
• Online advertisement and brand positioning
• Realtors can manage their business efficiently, market
properties using digital channels, increase sales, and
provide a noticeably higher level of service to both buyers
and sellers
• Grab a significant share of online traffic (over 200,000 real
estate searches per month as on today)
Integrated Marketing and Networking

• Easily conduct Email and SMS campaigns to a

targeted group
• Instantly network with a large number of realtors on
a platform such as Realtor Connect to share
properties and requirements
BUDGET IMPACT ANALYSIS

Real Estate and Construction

 Interest subvention of 1% on housing loans up to Rs 1 mn extended up to March

31, 2011 with allocation of Rs 7 bn for FY11
 Pending projects of real estate companies allowed to be completed in five years
instead of four years for claiming deduction on their profits
 Allocation for Housing and Urban Poverty Alleviation for FY11 raised to Rs 10 bn
from Rs 8.5 bn in last fiscal
 Norms for built-up area of shops and other commercial establishments in housing
projects to be relaxed to enable basic facilities for their residents
POSITIVE IMPACT

 The continuation of interest subvention scheme on housing loans coupled

with reduction in personal income tax rates would drive the demand for
residential housing, especially from the lower and middle income groups
 Several projects of real estate companies were delayed and halted on
account of the economic slowdown last year ; extension in the period of
completion of pending projects by one year for claiming tax deductions
would provide substantial relief to such real estate players
 The budget speech indicated continued thrust on growth of SEZs in the
next fiscal; approval of more SEZ projects in the next fiscal would provide
a great impetus to the growth of the real estate sector.
REFERENCES