Real Estate and Covid-19: Impact and Regulatory Response in India

Abstract

Covid-19 has had a significant impact on the real estate sector the world over. The significance of real estate to the Indian economy is substantial – both, in terms of GDP contribution and employment generation. As a supplier of both commercial and residential infrastructure, real estate acts as a fulcrum for growth and enables holistic socio-economic development. This paper studies the extent of the impact of Covid-19 on the Indian real estate sector, and evaluates the response to the challenges on the part of Real Estate Regulatory Authorities (RERAs) and other agencies in the real estate regulatory framework.Using primary data from a survey covering 257 respondents from 16 states, and secondary data from surveys conducted in two separate waves of Covid-19 – one by Anarock and another by the Confederation of Real Estate Developers’ Associations of India – better insights are obtained.Notifications issued by RERAs and Ministries, RBI directives, representations made by various stakeholder associations, and a focus group discussion of experts and professionals are other in-puts used in the analysis of the regulatory response.The data indicate that the effect of Covid-19 on real estate has been severe, with the severity getting compounded after the second wave. The stress extends to all stakeholders in the real estate ecosystem. The measures announced by various regulatory agencies are considered inadequate by developers, who have argued for a more robust response, including GST and other fiscal changes. Experts recommend amendments to the RERA Act, as well as the use of technology and innovation for long-term adjustment.