The silver lining for residential property buyers was the June 2018 amendment of the Insolvency & Bankruptcy Code (IBC), 2016, which classified home buyers as financial creditors as opposed to their previous operational creditors status.
With this amendment, Joe Verghese, Managing Director, Colliers International India, explains, “Home buyers are at par with lenders in bankruptcy proceedings. Previously, home buyers were only entitled to repayment after the dues of financial creditors had been cleared. Home buyers also get representation on the committee of creditors and the right to invoke Section 7 of the IBC, a provision covering corporate insolvency, against errant developers.”
Reforms affecting affordable home buyers included the reduction in the GST rate for affordable housing from 12 per cent to 8 per cent, observes Arvind Nandan, Executive Director, Research, Knight Frank India. “Lowering the GST rate lowered the cost of acquisition for low- and mid-income consumers.”
In Delhi and Mumbai respectively, the Delhi Land Pooling Policy as well as the partial implementation of the Mumbai Development Plan 2034 aim at freeing up land. In those cities, revising the carpet area under the MIG-I category from 120 sq m to 160 sq m and for the MIG-II category from 150 sq m to 200 sq m has provided a boost to affordable housing, says Anshuman Magazine, Chairman, India and South-East Asia, CBRE.
“In Tier-II and Tier-III cites, real estate has received a major boost due to the Smart Cities mission,” adds Magazine. “Also, the pan-India focus on infrastructure such as airports, flyovers, metro-rail corridors, highways and expressways is fuelling rapid growth in smaller towns.”
Last but not the least, Nandan observes, relaxing FDI norms for real estate brokers provided a boost to international consulting firms.
- CHARU BAHRI