The effects of RERA and GST have been rife over the Real estate market of India. Here’s a look at the trends that are expected to reshape and redefine the sector in 2018.
With the implementation of RERA and GST, Indian Real Estate sector has witnessed significant transformation in the recent times. However, the experts have found this phase quite promising, considering the evolving growth prospects in the market. It seems 2018 looks brighter than ever with a good supply of houses across major Indian markets.
Following the World Investment Report, the global capital flow into Indian real estate will increase further. Expectantly, developers will revamp their business models to live up to the consumers’ demand.
Let’s take a look at the trends that are expected to reshape and redefine the sector in 2018.
1. A Highly Evolved Business Model- The reforms like RERA, GST and the Benami Property Act have made accountability, transparency and quality the major parameters of every real estate dealings. As a result, it’s expected that the real estate dealings will become much more reliable and the project construction will adhere to the standards defined by the concerned authority.
2. FDI inflow to Indian real estate will increase- The introduction of of REITs (Real Estate Investment Trusts) in 2017 has increased transparency in real estate transactions. As a result, the realty sector is likely to draw more investments from the foreign investors. This will have a widespread impact on the market, thus encouraging significant improvements in the regulatory framework. Due to the increased level of transparency, NRIs will find the country’s real estate market more reliable.
3. Revival of Affordable Housing- This is one of the most happening outcomes of the significant transformation that the Indian realty sector is going through. By 2019, one crore houses are slated to be built across India and this vital segment will attract a cheaper sources of finance.
Alongside, the government has introduced a new credit-linked subsidy (CLSS) targeting the mid-income group. Tenure of loans under this scheme was extended from 15 to 20 years. The objective of the scheme was to enable the budget buyers to purchase their own home. According to an owner of a residential house in James Long Sarani, Kolkata , the introduction of affordable housing along with the implementation of PMAY scheme has been quite helpful for the buyers like him to buy a home in a metro city. No do
4. REITs (Real Estate Investment Trust) will witness significant growth- In the last couple of months; government has made significant efforts to build up REITS in order to make real estate dealings even more transparent. No doubt, it has added significantly to India's growth story. Today, most of the real estate projects are becoming REITs complaint. As a result, a variety of institutional and smaller investors is putting in their money in this sector as it accrues relatively lower risk.
The growing trends in real estate sector are pointing towards a steady growth in this sector as its inviting investment in small scale as well. This is going to be the tried and tested means of building cash flow even in the post demonetisation phase.