As we enter 2018, everyone is looking back at the year to see how the world changed. For the field of real estate in India, it has been a remarkable year of ups and downs. There have been some major policy changes implemented by the government, which had been long coming. But the sector is undoubtedly ending the year on a good note.
At the end of last year, the sector experienced a major setback due to demonetization. Real estate prices rose rapidly due to this move. The negative impacts were clearly visible in the first half of the year. The number of residential units sold in India’s top eight cities, such as New Delhi, Mumbai, and Chennai, declined by 11 percent as compared to 2016. Moreover, the currency crunch led to further delays in projects. Launch of residential projects dropped by 41 percent. It certainly was a rough year at the start of Indian real estate.
However, this year the onset of GST and RERA has given new life to real estate in India. GST has placed the country under one uniform indirect tax system, giving rise to simpler functioning and pricing in all sectors. When GST rolled out, there was initially a lot of difficulty in aligning existing systems that were in place with the new regulations. But as the year ends, the GST impact on real estate is beginning to show, especially when it comes to purchase and sale of property.
As for real estate regulatory act, it is clearly achieving the transparency it set out to establish. All agents have to be registered under this act, which roots out many unscrupulous people acting as brokers. If any parties violate RERA rules and/or take advantage of their position in any manner, the government will impose strict liabilities on them. This has boosted the confidence of buyers and customers and the government hopes that 2018 will be the year of revival for the real estate sector in India.
Another important event this year was the launch of the Pradhan Mantri Awas Yojana (PMAY). The aim of this scheme is to provide “affordable housing for all”. Under the PMAY, home buyers get a subsidy on home purchases and also a subsidized interest rate on home loans. While the initiative from the government’s side has been put into place, builders and developers are required to take a more proactive approach to aid this program.
We are entering 2018 with hopeful sentiments about the overall health of the real estate sector in India. If states implement the real estate act well, we could be heading towards the best era of real estate in a long time. And as you begin 2018, we will keep you updated on all the happening in real estate constantly.