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Shuchi Singh | 20 Jan 2023

Four Major Pain Points In The Indian Real Estate Sector

Four Major Pain Points In The Indian Real Estate Sector

The Indian real estate sector has come a long way over the past few decades by becoming one of the fastest growing markets in the world. The growth of the sector is not only the result of fast-paced urbanisation but also through a series of initiatives by the government that were cordial for both developers and buyers. However, in spite of the positive outlook, the real estate industry is battling challenges at present. Some of the major challenges which the Indian real estate sector is facing currently.

Delayed Infrastructure Projects 

Infrastructure projects in India have been facing inordinate delays. Most real estate developers initiate various projects at a point of time and start promoting their projects much before the completion of the project to attract the buyers. However these delays happen due to various reasons such as lack of or irregular funding, litigation, failure to procure necessary licenses, etc.. While RERA has identified and addressed the issue of delayed infrastructure projects with transparent usage of funds, but lacks a strong action to force authorities to deliver time-bound project approvals. Therefore, the sector further requires a single-window clearance system.  The implementation of this method will not only bring down the project delivery deadline delay but also the cost of the construction.

Also Read: Indian Real Estate News

Non-Availability Of Land 

While there is a good demand for residential and commercial projects in the country, Scarcity of land within the city limits is one of the biggest challenges that has affected the growth of the real estate industry. Moreover, the rising land prices and construction cost are leading to an increase in the overall cost of the projects. Thus, making the projects unviable for developers and homebuyers alike. Central and State government entities in India hold large amounts of public land parcels such as railways, defence, and port authorities. Therefore, it is important to unlock the vacant land parcels through land regulations in order to address the issue of the scarcity of land and achieve Housing for All by the year  2022.

Lack Of Funds

In the construction industry, the cost of work creates an initial obstacle in the development of the projects in focus. Developers face a major challenge with funding. Due to several instances of frauds, commercial banks have become more restrictive in lending money to the real estate developers. Lack of industry status also does not allow realty developers to access funds at an affordable rate. It is essential that the Government should incentivise the developers to build affordable and green homes in order to avail maximum benefits.

Also Read: Union Budget

Outdated Building By-Laws

With the current rate of population growth, our cities are gasping for space. Today, 55% of the world's population lives in urban areas, By 2050, two-thirds of the world's population is expected to live in the cities. However, the current Floor Space Index (FSI) norms in the cities are not on par with the current requirements. Reports state that the allowable FSI values of Indian cities are low- in the range of 1 to 1.5. Thus, state governments need to revisit the FSI norms.


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