The Indian real estate market is undergoing consolidation. Data analytics company PropEquity says small players (builders) of the real estate sector are dying out year after year due to large declines and strict regulations. More than half of the builders in the major nine cities of the country, compared to 2011-12, either quit or joined hands with big builders. These nine cities are Gurugram, Noida, Mumbai, Thane, Pune, Bangalore, Hyderabad, Chennai and Kolkata.
Number of builders decreased by 51 percent in a year
The PropEquity report states that the number of builders in these nine cities fell by 51 per cent to 1,745 in 2017-18 as against 3,538 in 2011-12. This represents a consolidation of over 50 per cent in the real estate sector over six years.
70-80% drop in the number of builders in these cities
According to the data, the number of builders in Gurugram, Noida and Chennai declined by 70–80 per cent during the period under review. Kolkata, Bangalore and Hyderabad have seen a decline of 60–65 per cent. At the same time, the number of builders in Thane has fallen by 48 per cent, in Mumbai by 32 per cent and in Pune by 19 per cent. This consolidation has led to an increase in sales of top-10 builders in all nine cities. Also, the number of projects launched has also increased.
Reduced risk of capital drowning
Entry of big corporate houses such as Tata, Mahindra, Godrej, Piramal and Adani in the real estate sector and non-timely delivery of house buyers on behalf of realty companies is a major catalyst in this consolidation process. Sameer Jasuja, Founder and MD, PropEquity, says that consumers are now investing in real estate only on the basis of their’ excellent track record and quality. With the advent of large corporate houses, the risk of sinking the capital of the home buyers will be reduced.
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