The Smart City Mission is on its way to revolutionise the real estate sector in India. According to a report titled ‘Real Estate – A Relook,’ released by the CII in collaboration with its knowledge partner CBRE, the real estate sector, which has witnessed decades of traditional approaches, will now be revolutionised by ‘disruptors’ who have initiated a new wind of demand in the sector. Smart cities, co-working spaces, affordable housing, and logistics and warehousing were identified as key disruptors in the report, which was released at the CII CBRE Realty 2019 conference.
What Are the Features of a Smart City?
The Potential Impact of Smart Cities on Real Estate
Real estate is being reimagined as a result of policy changes due to smart city
1. What Are the Features of a Smart City?
A smart city is a city that combines technology, infrastructure, and planning to create a more citizen-friendly and sustainable environment. Following completion of development, the infrastructure of a smart city would include the following core features.
- Dependable and sufficient power supply
- Sufficient supply of clean water
- Sanitation and waste management systems that are effective
- Public transportation that is dependable, as well as urban mobility
- Health and education systems that are both accessible and efficient
- Security and safety measures that are effective, especially for women and children
- All citizens have access to affordable housing options.
- A long-term environment
- E-governance, in particular, solid governance
- Good IT connectivity and administration system digitization
The ultimate goal of implementing smart cities would be to drive the economy towards prosperity and economic growth, which would not only improve the Indian people’s quality of life, but would also harness innovation for smarter solutions.
2. The Potential Impact of Smart Cities on Real Estate
Increased interest in commercial real estate
Smart cities will necessitate more office space, especially as companies with a global footprint or international behemoths are expected to set up shop. A lot of money is expected to be invested because office space will be in high demand.
Improve public-private partnerships in the smart cities
Stronger collaborations between these two sectors will be critical in raising the capital required to build smart cities. This will also ensure that services and utilities are delivered efficiently. Indirectly, this will increase capital pooling by developers and private enterprises for the creation of joint ventures within smart cities.
Housing schemes that are both improved and affordable
In line with the Prime Minister’s PMAY scheme and the overall goal of “housing for all,” developers will be enlisted to help meet the target of 2 crore homes by 2022. This will also provide a significant boost to smaller real estate developers, as new demand for housing will emerge.
Because of a combination of factors, smart cities will eventually create a plethora of job opportunities for the people, necessitating improved infrastructure, commercial and residential spaces, and an overall increase in the standard of living. As a result of this, job opportunities in the real estate sector are expected to skyrocket, as infrastructure development necessitates manpower and labour.
Developers will play a critical role in the implementation of smart cities. With a minimum of 100 cities planned to carry the smart city flag, the real estate sector is expected to grow by 10-12 percent by 2022.
3. Real estate is being reimagined as a result of policy changes due to smart city
- At the moment, 30 states and union territories have notified the RERA rules, with over 42,000 housing projects already registered.
- In the first half of 2019, supply increased by 17% year-on-year in India, while sales increased by 16% year-on-year.
- Real estate in India is now on the radar of global investors, with the country’s first REIT listing serving as a prominent example.
- India has made rapid progress in its ranking of the Ease of Doing Business.
- Separate policies for individual real estate segments were announced for the first time in H1 2019, including a Draft Logistics Policy, a Draft Industrial Policy, a Draft E-commerce Policy, and a Draft Retail Policy.
- The impact of RERA, GST, and the Insolvency and Bankruptcy Code is expected to better position developers with a scalable business model, allowing them to increase their market share in a regulatory environment that demands greater accountability and transparency from developers.
The sector requires a paradigm shift, which can only be achieved through technology, which will act as a game changer and assist real estate in reviving, thereby opening up new opportunities for growth in India.
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