Real estate sector likely to witness exponential growth in coming years
It was recorded last year that the real estate sector of India suffered a loss, but things are to take a change as we have stepped into 2019. However, the real estate sector suffered many losses and the market was down, but as compared to previous years the market is likely to pick up the peace in 2019. The real estate market has been depressed for a few years now. But this financial year, things are looking better, with a note of caution.
The GST rate noticed a drop down in 2018, which showed eagerness towards buying a property from the buyers from the market and added a positive aspect towards the buyers. Investment in the real estate sector was likely to increase and an ample number of people showed interested in buying properties. On the other hand, the Land Pooling Policy by the Delhi Development Authority (DDA) has been started to expedite housing and infrastructure development, which will fulfil the dreams of thousands of homebuyers in Delhi.
In October 2018, the Ministry of Housing and Urban Affairs notified a land pooling policy under the 2021 Master Plan for Delhi to address the large-scale housing gaps in Delhi. Through this policy, Delhi is set to get 17 lakh new affordable housing units, with a capacity to accommodate 76 lakh people. This policy signals a change in the DDA’s model of land acquisition and development to a ‘land pooling model’, where the private sector and land owners are both partners in the development.
Going forward, we will see velocity of sales and transactions picking up as the fundamental need for real assets for end-users as well as sophisticated investors is perpetual. What was needed was regulatory stability, which we now have through RERA, 2019 seems like a good year to invest in the real estate market. However, as per the claim that real estate was supposed to make a good comeback in 2018, it did not pick up drastically; the market segmentation did not live up to the mark as was expected, but comparatively things are likely to turn around this year.
Builders who are involved in the Prime Minister's Housing Scheme and Deendayal Awas Yojana predict that things will fall into places in 2019. Buyers were also attracted by many schemes and exemptions, which has reassured people; and affordable housing is improving fast. In 2019, all developers have expected that this area will grow and gradually improve.
“2018 was a watershed year for the realty sector, especially for New Delhi. While RERA is going to be implemented nationally, its LPP that can be a game-changer. Yes, some modifications were expected in certain provisions with regards to FAR for instance, but all in all, the year gone by has panned-out quite well. LPP was all the more important, given the fact that the entire sector was riddled with unorganised and illegal settlements, with most of the new projects coming up at adjoining areas like Gurugram and Noida,” said Neh Srivastava, President, Central Secretariat Services Officers Society and Under Secretary in Ministry of Home affairs.
He further added, “It is indeed ironical that out of three basic necessities of life – Roti, Kapda and Makaan – it is the Makaan that has been left out entirely from the realm of proactive public policy. The housing sector is still awaiting infrastructure status and this in turn has kept investments away from it. While the home loans and number of builders have grown exponentially, the regulatory mechanism has failed to keep up. This in turn has led to delays, cost overruns and overall customer dissatisfaction. With LPP coming into play, credible societies and associations can also jump into the sector and can provide affordable housing options.”
He added, “We are already seeing a lot more institutional capital flowing into the sector, with large global funds looking at deploying long-term, patient capital to the sector. They are usually the first movers, after which consumer funds usually follow.”