Changing Dynamics Of Real Estate in India
2017 has been a one of the most challenging year for Real Estate sector in India. Indian Economy is largely dependent on this sector and it is also top most emplyoment provider. Major Reforms like Demonetisation, RERA followed by GST etc. has changed the entire face of Real Estate Sector.
Let us highlight on few points in short:
- To start with Demonetisation – the sudden announcement of banning two highest value banknotes weakened a lot of the liquidity in the Indian economy, negatively impacting the property sector. The primary aim of demonetisation was to reduce the amount of black money in the Indian economy, of which the real estate sector had been a major beneficiary, along with the legal cash flows it was accustomed to receiving.
- Pradhan Mantri Awas Yojna– Housing for all which is the ambitious project with the mission of Housing for all by 2022. This will tackle the problem of housing shortage of around 2 crore homes in India, including Economically Weaker Sections and Low Income Groups in urban areas by the year 2022 through a financial assistance.
- RERA – A landmark reform by the centre government has completely changed the landscape of the real estate sector. The Aim is to bring down irregularities in the sector. Earlier Home buyers usually faced issues regarding the late possession of the house and illegal project building by the developer. So to boost the confidence of investors and homebuyers, RERA was introduced where the developer has to register on-going project giving the complete details of the project with its completion date and also the amenities offered. The act is applicable to residential and commercial developments. Under the act, along with the Developers and their projects, the Real Estate Agents also have to be registered, thus leading to cleaning up and weeding out of fly by night operators and bring in more professionalism in the sector. This will organise real estate sector, thus infusing credibility and accountability.
- The Indian authorities have also moved to crack down on “benami” property transactions – which refers to property or land being bought in someone else’s name or under a fictitious identity, often to hide black money and stay under the radar of the taxman.
- Lastly the introduction of GST has also greatly impacted this sector. It will streamline the supply chain of developers and bring many small-time contractors and vendors into the GST net. Though the sales in under-construction properties is adversely affected, but we should see positive effects in long run.
Reputed developers believe that the policy reforms may be having a short-term negative impact but they say that ultimately the changes could benefit the sector, as the industry makes the transition to becoming more structured.
The combined effect of all these reforms should positively lead to better tomorrow and affordable real estate – relief to Common Man.