What's In Store For Real Estate Sector In 2018?

What's In Store For Real Estate Sector In 2018?

What's In Store For Real Estate Sector In 2018?

In the past two years, the sector witnessed unprecedented focus by the government on the legal and regulatory reforms. The real action started from the enactment of the Benami Transactions (Prohibition) Amendment Act, 2016 which was followed by the ground-breaking step of demonetization in the last leg of the year.

It is mainly due to the excess liquidity in the banking system caused by demonetization that the home loan interest rates started coming down and today they are pegged at 8.3-8.4 percent, which is the lowest rate in the past decade.

By May 2017, the long-awaited Real Estate Regulatory Act came into shape and since then we have seen a number of moves that are massive in nature, covering millions of home buyers.

The ‘Housing for all by 2022’ mission aims to build as many as 2 crore homes by 2022 and half of these are projected to be completed by 2019. Building such huge numbers of homes is not possible without participation from the private sector and the government is therefore open for public private partnerships (PPPs) to get the ball rolling.

Today a person who wants to buy a home has all the support and incentives available at his disposal. A home buyer can claim interest subsidy in the range of Rs 2.3-2.67 lakh for availing of finance for buying a home that meets the conditions laid by the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY).



CLSS Scheme Type

Eligibility Household Income

Carpet Area-Max (sqm)

Interest Subsidy (%)

Subsidy calculated on a max loan of

Loan Purpose

Validity of scheme

Max Subsidy (Rs.)

Woman Ownership


Upto Rs. 6,00,000



Rs. 6,00,000

Purchase/Self Construction/Extension


2.67 Lacs

Yes *


Rs. 6,00,001 to Rs. 12,00,000



Rs. 9,00,000

Purchase/Self Construction


2.35 Lacs

Not Mandatory


Rs. 12,00,001 to Rs. 18,00,000



Rs. 12,00,000

Purchase/Self Construction


2.30 Lacs

Not Mandatory

Source: Ministry of Housing and Urban Poverty Alleviation

Such a high-impact, comprehensive affordable housing scheme will certainly enable millions of people in India to own homes early on in their careers and this will have a far-reaching impact on the overall health of the real estate sector.

As per industry estimates, the current investor wealth in real estate sector in India is somewhere around 61 lakh crore and it is estimated to double up in the next five years under normal conditions. However, with a massive thrust on affordable housing, the overall size of the real estate sector in India is slated to multiply by several folds.

Going by broad estimates, if an affordable house costs Rs 15-30 lakh, the construction of 2 crore homes will add Rs 40-50 lakh crore to the economy directly. In addition, there are several other indirect benefits such as employment generation for millions of people in the construction sector and the allied industries such as steel, cement and other materials and services. It is indeed a conservative estimate, the reason being that there will be many more properties that will be sold-off in the coming times.

Why not? The home buyer sentiment is improving gradually owing to the consumer-oriented provisions of RERA. The same goes with the global investor community which is more confident about the level of transparency promoted by the recent regulatory reforms.

The past two years have been the disruptive phase of reforms in a step-by-step fashion and the coming times will certainly open up the doors of opportunities for home buyers and developers alike.

Last Updated: Mon Feb 12 2018

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