Real Estate Still Recovering From Side-Effects Of Demonetisation, GST
This is not a hidden fact that Indian real estate market is facing a slump and is yet to recover from the side-effects of demonetisation and Goods and Service Tax but the good news is that the homebuyers are back in the market. The implementation of Real Estate (Regulation & Development) Act, 2016 has boosted consumer sentiments. The property purchase has gone up in the last three months, especially in the affordable housing hubs, showing the other markets may revive too in near future. MakaanIQ spoke to Rahul Nahar, founder, Xrbia Developers to understand how real estate was impacted by major policy changes and how the property market is recovering from it. Here are the excerpts.
MakaanIQ: How has RERA changed the property market?
Nahar: RERA was introduced to infuse a sense of accountability and transparency in a market known for underhanded dealings and incomplete promises. Thanks to the advent of the Act, developers were forced to tighten up their act and stand true on deliverables within a stipulated period.
MakaanIQ: How is the property market recovering from the adverse effect of note ban and GST?
Nahar: Demonetisation played a huge role in the real estate sector coming almost to a crunching halt. Developers were struggling to complete existing projects on time while the homebuyer wanted to sit on his investment and not be too indulgent or divulging in an extremely volatile market.
GST was almost like the final straw for an already slow real estate market. The higher tax rate on purchasing what is already an expensive home for most people threw many a home buyer and investor off the scene. Under considerable strain, the real estate sector looked to the Government to bail itself out of trouble.
MakaanIQ: Do you see a revival of Indian real estate sector in near future?
Nahar: The Government had understood the shortcomings in what was an extremely stringent policy and reacted with policies and measures to level the playing field for the real estate developer. For instance, cutting the GST rate from 12 to 8 per cent coupled with the credit linked subsidy scheme will bring about a definite spurt in the number of prospective house owners looking to buy a new home in 2018.
Also, to encourage more private sector funding especially in the affordable housing segment the government has introduced a host of new Public-Private policies to help prop up the real estate sector while also fairly incentivising the private developer.
The biggest of all, the government’s initiative to develop 1.2 crore new houses for the economically weaker sections of society under the Pradhan Mantri Awas Yojana is another considerable initiative to bring back happy smiles. What initially started as a metro city initiative is now spreading its wings into the peripheral areas giving an opportunity for developers to broaden their spectrum.