DMA Money Edit: Oligopoly in the making in realty sector

The Real Estate (Regulation and Development) Act, 2016, was enacted and implemented to make developers more consumer-focused. With over two years since the law coming into force, several realtors have been caught on the wrong side, something they were doing for decades.

With consolidation happening and fly-by-night players getting weeded out, this homebuyer friendly regulation has also meant that fewer, established and branded players remain in the business. A lot of consolidation is yet to happen.

It has now been proven that since Rera's implementation, real estate players with high-recall brands have raised their stakes and have accounted for a whopping 56% share of the total housing supply in 2018. There has been a year-on-year rise in their share since 2015 when it was 41%.

As many of these big players have started catering to those at the bottom of the pyramid through affordable housing projects, their market share, as well as revenue, has only better. Till a few years ago, this segment was largely catered to by unknown or lesser known builders. In fact, in the last couple of years, it is affordable housing that has witnessed healthy sales numbers unlike the other segments at the top of the pyramid.

What does this mean? Oligopoly is in the making.