India has been investing in many sectors to further its economic performance. One such sector is the real estate sector in which the huge population is seen as a growth driver. Recent years have seen many new developments in technology and trade with foreign investors increasing their interest in India. There have also been a number of significant policy changes and the effects of the imposition of such laws are currently debatable. However, real estate industry research and market reports suggest that 2018 will be a favorable year for the Indian real estate market which will benefit from recent reforms.
Real estate market research reports bring out the fact that in 2018 there are several challenges and opportunities for growth especially for the home buyers and home developers. All this comes after a very irregular movement of the industry in 2017 when too many things happened. The effect of demonetization was still visible in 2017. The Central Government in the Union Budget 2017-18 introduced ‘Housing for All by 2022’ which comes with a number of benefits like availability of prime land parcels, access to funds and fast approval of incentivizing for the affordable housing projects. The government also introduced RERA to bring complete transparency between buyers and sellers. This act has raised the interests of home buyers and confidence among the consumers. Furthermore, the introduction of GST in 2017 aimed to dismantle multiple tax system and the effects were evident as in 2017, 30% less units got sold out compared to 2016.
For 2018 there is some expectation from both buyers and developers that new government policies will boost the housing sector. India is working on promoting Real Estate Investment Trust (REIT) and there is also projection of receiving Private Equity (PE) investment of about USD 4 billion during the fiscal year. As far as listing down the metro city that would yield a good return to developers, Bangalore tops the list.
RERA though good for the public, presents a very different scenario to the developers. They have to face the restriction to new construction and instead complete the existing ones within the deadline. As a result 2018 is expected to witness major sales and delivery in the residential market.
Since the establishment of GST the real estate sector has been facing huge roadblocks due to high GST rates. The government needs to realize that home buying is a huge investment and such unfavorable tax conditions are detrimental to the industry. Estimates show that the government should bring down the GST rate 6% to encourage buyers to invest in new projects. However, the government has taken a few steps to change the scenario. These include various tax incentives and reforms like interest subsidy.
Input costs are also on the rise. Since real estate is a capital and labour intensive industry, a rise in the cost of labour will create issues. Cement companies have also raised prices creating problems in project development. The government is trying to compensate by launching schemes like Pradhan Mantri Awas Yojana which aims to build houses for everyone by 2022.
Major developments have affected Indian real estate recently. The government has attempted to maintain a healthy environment for everyone by launching schemes and subsidies. It has also aimed to increase transparency in the market by furthering RERA which promotes clean capital. Such steps that incorporate favorable government schemes, FDI and transparency are expected to drastically change the future of the real estate sector in India starting from 2018.
Key Topics Covered in the Report
Real Estate Market Research Reports
Real Estate Industry Analysis
Market Research Reports for Real Estate
Real Estate Industry Research Report
Real Estate Market Research Reports Consulting
Real Estate Business Review
Real Estate Industry Research and Market Reports
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