Cyclical Trends in Indian Real Estate and Their Impact on Agent Earnings: A Data-Driven Approach

Abstract

The cyclical nature of real estate markets significantly affects the income stability of real estate agents. This study explores the effects of market cycles on agents’ income in India, focusing on four phases: recovery, expansion, hyper-supply, and recession. The analysis also assesses the impact of the Real Estate (Regulation and Development) Act (RERA) implemented in 2017. Using secondary data from industry reports, regulatory analyses, and academic studies, thematic and content analyses were conducted to identify key trends, including income volatility during recessions, income growth during expansion, and the urban-rural income disparity. The findings reveal that real estate agents experience substantial income volatility during market downturns, while expansion phases provide maximum earning opportunities. RERA emerged as a critical factor in stabilizing income by increasing transparency and professionalism in the sector. Urban agents benefitted more from these reforms, achieving higher and more stable incomes than their rural counterparts, who faced challenges in adapting to the new regulatory framework. The study confirms a positive correlation between market indicators such as property prices and transaction volumes and agents’ income, with urban agents reaping greater benefits. Recommendations include tailored training for rural agents, diversification of income streams, and policy support to address rural market challenges. These insights provide valuable guidance for policymakers, real estate professionals, and industry stakeholders to mitigate income volatility and foster sustainable growth.

Introduction

The real estate sector is a major driver of economic growth and employment in India. Real estate agents serve as key intermediaries, but their incomes are highly volatile, closely tied to the cyclical nature of real estate markets (recovery, expansion, hyper-supply, recession). Despite their critical role, research on Indian agents' income stability is lacking, especially in the context of regulatory changes and market informality.

2. Purpose of the Study

This study aims to:

• Analyze how real estate market cycles affect agent incomes in India.

• Examine the impact of the Real Estate (Regulation and Development) Act (RERA) of 2016 on agents' income volatility.

• Address research gaps by offering an agent-focused, India-specific analysis—especially relevant due to disruptions like COVID-19, GST, and demonetization.

3. Literature Review Highlights

A. Real Estate Market Cycles

• Cycles affect transaction volumes and, therefore, agent incomes.

• Boom periods increase earnings; recessions reduce opportunities.

B. Income Volatility

• Agent income is commission-based, hence inherently unstable.

• Informality and lack of institutional support worsen volatility in India.

C. Indian Market Dynamics

• RERA has increased transparency, but added compliance pressures.

• The market remains fragmented and informal, with rural-urban disparities.

D. Coping Strategies

• Agents diversify into services like property management or join firms for stability.

• Increasing reliance on technology and digital marketing.

E. Regulatory Impact

• RERA, GST, and demonetization have introduced short-term disruptions and long-term structural changes, impacting agent operations and earnings.

F. Research Gaps Identified

1. Lack of focus on emerging markets like India.

2. Limited studies on agents specifically, not just market trends.

3. Understudied long-term impacts of policy reforms like RERA.

4. Minimal research on coping mechanisms and digital adaptation.

4. Rationale

This research fills a critical gap by focusing on the financial stability and resilience of real estate agents in India, assessing the moderating role of RERA and comparing rural vs. urban trends. It aims to deliver actionable insights for policymakers and industry stakeholders.

5. Objectives of the Study

1. Identify the phases of real estate market cycles in India.

2. Measure their impact on agent incomes.

3. Examine correlations between market indicators and income trends.

4. Propose strategies to manage income volatility.

6. Hypotheses

• H1: Income varies significantly across market cycle phases.

• H2: Agent income positively correlates with market indicators (e.g., property prices, transaction volumes).

• H3: Income volatility is highest during recession phases.

• H4: RERA moderates income volatility during downturns.

7. Methodology

A. Research Design

• Qualitative, using secondary data (government reports, industry publications, regulatory data).

B. Data Sources

• Government (e.g., RBI, Ministry of Housing)

• Industry (e.g., NAREDCO, JLL India)

• Academic and regulatory literature

• Historical property market and transaction data

C. Analysis Methods

1. Content Analysis: Thematic categorization of data (e.g., income volatility, regulatory impact).

2. Trend Analysis: Time-series patterns in income and transactions across market phases.

3. Comparative Analysis:

   • Pre- and post-RERA income patterns.

   • Urban vs. rural agent income trends.

References

[1] Anantharaman, M., 2017. Informality and urban labor markets in India: The case of real estate agents. Urban Studies, 54(5), pp.1160–1178. doi:10.1177/0042098016634031 [2] Ball, M., 2010. Markets and institutions in real estate and construction. Oxford: Wiley-Blackwell. [3] Benjamin, J.D., De La Torre, C. and Musumeci, J., 2007. Real estate agents\' income volatility and risk: Causes and consequences. Journal of Real Estate Research, 29(3), pp.337–362. [4] Confederation of Real Estate Developers’ Associations of India (CREDAI), 2021. State of the real estate industry in India. New Delhi: CREDAI. [5] Geltner, D. and Miller, N.G., 2001. Commercial real estate analysis and investments. Cincinnati: South-Western College Publishing. [6] Glaeser, E.L. and Nathanson, C.G., 2017. An extrapolative model of house price dynamics. Review of Economic Studies, 84(1), pp.451–481. doi:10.1093/restud/rdw010 [7] JLL India, 2021. COVID-19 and its impact on India’s real estate market: A comprehensive report. Mumbai: JLL. Available at: https://www.jll.co.in/ [8] JLL India, 2022. Real estate market trends: Annual report. Mumbai: JLL. [9] Lourenço, R., Santos, C. and Pereira, J., 2020. Real estate cycles: A systematic literature review. Journal of Property Research, 37(3), pp.234–254. doi:10.1080/09599916.2020.1728209 [10] Miller, N.G. and Geltner, D., 2005. Real estate principles for the new economy. Cincinnati: South-Western College Publishing. [11] Mueller, G., 1995. Understanding real estate’s physical and financial market cycles. Real Estate Finance, 12(3), pp.47–52. [12] Nair, M., Thomas, J. and Kumar, S., 2019. The regulatory impact of RERA on Indian real estate markets: Perspectives from developers and agents. International Journal of Housing Policy, 19(3), pp.361–385. doi:10.1080/19491247.2019.1569363 [13] Oikarinen, E., 2014. Price dynamics in the housing market: Theory and empirical evidence. Journal of Housing Economics, 25(1), pp.21–38. doi:10.1016/j.jhe.2014.01.003 [14] Sarkar, S., Banerjee, R. and Ghosh, A., 2021. Impact of RERA on the Indian real estate market: A post-reform analysis. International Journal of Real Estate Studies, 15(2), pp.123–136. doi:10.1080/ijrs.2021.205123

Copyright

Copyright © 2025 Dr. Majid Wahid Shaikh, Chintamani P Angadi. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.