Real estate market in India has been going through a roller coaster ride in the first 15 years of 21st century. While the years between 2003 and 2008 saw a scorching pace of development with huge appreciations in the market that had been hitherto unheard of, there was a small blip in the succeeding 2 years till 2010 on account of pressures due to the global meltdown. The market again went through an upswing from 2010 till 2013 as there were a spree of launches and hectic construction activities. The years from 2014 onwards have seen subdued sentiments as the market took a dip with some builders not adhering to the timelines affecting the overall confidence of the buyers. The period has seen huge discontent among the buyers as their investments got stuck with no sight of completion of the projects that they invested in.
With the-ever increasing population in the country and rapid urbanisation, the need for residential space in cities is rapidly rising. The unaffordable real estate prices and a few bad projects in the last few years had forced people to postpone their buying decisions. Since the new government led by Narendra Modi has taken charge at the centre, the sentiments of home buyers are improving again as the new dispensation has taken measures to reinvigorate the property market with a flurry of initiatives and schemes. A five-pronged approach initiated by the government that comprises of demonetisation, RERA, GST, home loan rate cut, and affordable housing, is expected to give a huge fillip to the industry.
The demonetization announced by the Modi Government on 8th November 2016 has succeeded in cooling down the real estate market that had a huge inflow of black money.This has led to a big drop in prices that were artificially being kept up by speculators as they held a huge trench of unaccounted black money. With the currency ban on high-value notes, the sector has seen a renewed buying activity in most of the residential projects as the prices have come down sharply.
The Real Estate Regulation & Development Act or RERA has also helped revive the sector. The law that came into existence in May 2016 has brought in much-needed transparency with laws that ensure buyers’ interests are protected.
GST or Goods & Services Tax is another such initiative that should help in improving the overall economy with most of the industries getting benefits of the single taxation system. This would definitely help the real estate industry as well as that hugely depends on the overall health of the economy.
“Housing for all Scheme” or “Pradhan Mantri Awas Yojana (PMAY)” is another such initiative of the central government that is bound to push up the home buying among the potential buyers.PMAY envisions to provide housing for all along with slum rehabilitation, promotion of affordable housing, and subsidy for house construction. As per some estimates, 40-45 million housing units are needed by 2028, out of which approximately 25-30 million are planned to be provided by 2022. There also are plans wherein the loans for these houses will be 1.5-2% cheaper than market rates which is further expected to lead to a jump in demand for residential projects.
The next few years from 2017 onwards would be definitely the years to watch out for as the market shifts to the genuine end-user buyer looking for their Dream Home as against the earlier speculator-driven market that had weak unsustainable legs.