The Indian real estate market is agitating for a better tomorrow. All the hiccups and hassle shall now be converted into profits and actions.
There is no clandestine, the real estate has turned its way into haven for circulating black money in account to lack of regulations. But policies and regulations implemented in 2016-2017 will change the game for the entire market.
This process is about pain and gain, the regulations implemented are stringent but were need of the hour, there were many policy reforms implemented and executed this year like Benami Transaction Act, interest subsidy for first time homebuyers, service tax exemption on construction, the Real Estate (Regulation And Development) Act, implementation of foods and services tax structure, currency demonetisation and permanent residency status for foreign investors. The regulatory bodies implemented multitudinous acts and these acts have a humungous effect on the realty market. RERA and GST will have a positive impact within a span of 8 months and as assured these reforms are reflecting their perquisites.
Not just profits and regulations, these reforms are going to turn tables for the realty market. They will act as catalyst in speeding up the realty growth but that’s not it, a momentum of transparency and resilient adaption will be observed. The short term disturbances and hassle have calmed and the functioning and adaptation is noteworthy on ends, developer as well as buyer. It is accounted that at least a time span of two quarters is required for the aftermath to bear its actions. Infrastructure status to affordable housing, REITS, RERA has an influential effect in raising the common man’s investment in real estate.
Considering the pricing difference in the sector, a major fall in prices is observed across the nation’s metropolitan cities like Delhi, Mumbai and Chennai. The fall in prices can be accounted on the shoulders of demonetisation 2016.
Coming across the year, visible traces of the Act yet lie untouched, but what extensively has impacted is the pricing with black money being swept off, the high-end investors took their foot back and a phase of concealment was observed in the realty market. This created decrease in demand for property and therefore lead to fall in prices, a phenomenon well known. Although it is estimated that soon by 2018, these acts will have an establishing effect in the pricing as well as well demand for the sectors. Affordable housing schemes have already started showing their after effects, according to data, large number of population has invested in affordable housing sector and the demand will rise more in the near future. The beginning of 2017 was inexplicable and unaccountable, all of it was not under control and buyer and developer too were taken aback with the changes. But the after effects over the year are on a positive end. Developers and Buyers both have uplifted their game; buyers have become more intrepid with more transparency and opportunity in the market and the developers have observed a more smooth and regulatory business process. Luxury projects have seen a decline in demand and sales but affordable housing is set to mark its success in the market. 1 crore houses are expected to be built by 2019 in rural areas, which will allow cheaper sources of finance and external commercial borrowings. The expectations are not completely matched as it is too soon to declare; by the second quarter of 2018 substantial aftermath can be done.
2018 will show ascendancy in the real estate sector, all the policy reforms and structural modifications will manifests its profits and gain in this year. Real estate market is going to launch like a rocket in 2018, a lot of expectations will be anticipated in 2018 and real estate sector will be looked up with blooming and success. Trends like global capital flow into real estate, revamping of business models, and exhilaration of affordable sector that will change the dynamics of realty sector are some of the enormous trends expected by 2018. It will be termed as the year of triumph.
About the Author:
Sushil Raheja is CEO of Raheja Homes Builders & Developers.