Demonetisation completes one year.
Modi's decision to take action on black money has ushered a new era for the real estate industry in India. The rolling out of major policy reforms such as RERA and GST compounded the aftermath effects of demonetisation.
For Ravish Kapoor, Director, Elan Group, 'The purpose of the entire demonetisation exercise was to clean up the system. In the long term, its impact on the real estate segment was neutral. According to PTI, the leasing of commercial sector remains unaffected in accordance with the effect.
With the introduction of RERA and GST, the major share of investors across the globe will take India globally raising confidence of customers in the realty sector.ö The primary residential market and projects embraced by reputed builders were not affected significantly by demonetisation; only in projects where the component of cash was involved and those in the secondary market have been influenced. Also, the transparency and accountability in the sector has enhanced significantly for institutional investors. The ongoing transformation is already witnessing a massive rise in investment inflow from both foreign and domestic investors.
'One of the segments that benefitted most from the demonetisation drive is the affordable housing segment,' says Ssumit Berry, Managing Director, BDI Group. He adds, 'Affordable housing came with lower EMIs due to various subsidies and became even cheaper after demonetisation. The Indian real estate sector attracted an all time high foreign investment of US$ 5.7 billion in 2016, despite demonetisation.'
On his part, Vineet Relia, Managing Director, SARE Homes, says, 'The real estate industry is presently facing many challenges due to demonetisation, implementation of RERA and GST. However, in the long run, both the residential as well as commercial sector, is expected to witness a boost due to the increased transparency and elimination of black money.'
The real estate sector will regain a speedier development direction and is estimated to contribute around 13 per cent to India's GDP by 2028. This forecast is achievable in the light of the fact that the reforms now redefining the realty landscape in India will not only incrementally boost consumer sentiment, but also additionally enhance investment inflows from foreign and domestic institutional investors proceeding. Having come a long way, this ripple effect has started to fade with time.
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