India: SMEs drop out as real estate sector undergoes consolidation

India’s housing market is undergoing significant change where an ongoing consolidation of house builders in the informal sector which, until recently, accounted for most almost 90 per cent of home construction in the country.

These small-and-medium-sized companies are struggling to cope with stringent regulations in the Real Estate Regulation and Development Act (RERA). As a result, many are unable to put properties on the market at reduced prices.

Analysts speculate that the number of SME builders could drop to a tenth of the previous 45,000. Companies that have managed to continue in business say they are being offered a large number of partially completed homes by distressed companies. This is happening at a time when the demand for houses is growing and news reports say the top ‘formal’ sector builders are looking to expand land purchases.

 

Source: ITTO