As per Wikipedia definition, Real Estate means property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing.”
From the definition, one can easily understand that it deals not only with the land or building. It deals with the interest of the people in owning, buying and selling of properties and business involved in it.
Land and property business and how it works in modern India:
In India, Real estate business has grown exponentially ever since the economy got liberated from license raj during early 90’s by then finance minister Dr.Manmohan Singh. Due to the liberalization of Indian economy, many foreign manufacturing and service sector companies invested in India and built their companies or factories in or around the urban areas. All these new work establishments created a huge job market in manufacturing and service sectors. Due to this sudden increase in the work opportunities and a sharp decline in the profits from agriculture and related work, many families from the villages of India abandoned their traditional farming related jobs. They moved to urban areas to work in the corporate jobs from vehicle manufacturing companies, software companies etc.
Due to this sudden increase in people movement to urban areas, real estate prices had increased in and around major cities all over India. To use this opportunity and make profits, lots of real estate business entities opened in the cities. These real estate companies are the brokers in between the buyers and sellers and gaining profits from the commission from both sides. Some real estate companies built their own properties like multi floor apartments, flats and villas and sold them directly to the public. People who had enough money to buy these properties bought them without any bank loans. Others were getting loans from banks to buy their own property.
From early 90’s to 2008, Real Estate business has performed extremely well and the excessive demand for properties have sky-rocketed the land and property prices in India. Due to the recession in some developed countries and economic slowdown around the globe including India which started in 2008, Indian job market was not performing well. This recession affected the real estate business as well. Interest of people in buying the properties started to decline as they were not sure about their job security. Because of this reason, the cost of real estate properties stopped to increase but maintained in the same level. During the period of 2008 to 2014, the situation remained the same and real estate market has gone up and down without any major changes.
As the new Indian Government which came to power in May 2014 has taken measures to bring back the Indian economy out of the slowdown, People are expecting that real estate market will do well again.