Seeing the initiatives taken by the government in the favor of real estate market, it won’t be wrong to call 2017 one of the most eventful years for real estate in the past few decades. From RERA (Real Estate (Regulation and Development) Act) and GST (Goods and Services Tax) to the interest rebate offered under the Pradhan Mantri Awas Yojana, the government took various crucial steps to increase transparency and restore the lost trust of homebuyers in the real estate market. And the upshot of all these efforts would be prominently visible in 2018, making it brighter than ever in terms of real estate prospects. All these initiatives would shape the Indian real estate market in 2018 by offering better investment opportunities and transparent deals which will eventually boost sales.
Government Initiatives Shaping The Real Estate Sector In 2018
- Real Estate (Regulation and Development) Act: The Real Estate (Regulations and Development) Act aka RERA is a revolutionary step taken by the government in the real estate sector. This act will not only empower the homebuyers but also increase transparency in buying or selling the property. The direct impact of this reform would be seen in 2018 as the homebuyers’ confidence is gradually being restored and they are investing more in real estate.
Courtesy RERA, the Indian real estate market would become more transparent and investor-friendly in 2018. It would put an end to the unscrupulous activities by builders and developers, stop fraudulent activities and project delays, and protect the buyers’ interest. Consolidation of small builders with large names would also be on the cards and successful projects would be delivered to the buyers. The increased transparency and better investment options would make the prospects for real estate brighter than ever in 2018.
- Goods And Services Tax: Goods and Services Tax aka GST is a ground-breaking tax reform that brought uniformity in the nation’s economy and taxation system. Implemented in July 2017, the effect of GST would be clearly visible in the Indian real estate market in 2018. All the nationwide taxes levied on different materials and services would be subsumed under the CGST and SGST. This would not only bring transparency in the real estate taxation system but also lower the overall money spent on taxes by 30%-40%.
The cascading of taxes and double taxation, which were big issues in the real estate sector, have also been resolved by the implementation of GST. In 2018, real estate would gain back the lost confidence of homebuyers and even attract domestic and foreign investment due to the uniformity in the taxation system.
- Real Estate Investment Trusts: The Real Estate Investment Trusts aka REIT were approved by the Securities and Exchange Board of India (SEBI) and would now attract more investment. People from domestic as well as the international sphere would be seen investing their money, starting from INR 2 lakhs, into the real estate market.
The year 2018 would see more investment in commercial property on the REIT platform. The increased transparency, diversification of investment, and lower risks with higher returns are some of the factors that would get people to invest more in REITs, making real estate brighter in 2018.
- Affordable Housing Schemes: Various government programs and schemes like the Pradhan Mantri Away Yojana and Housing For All By 2022 would also drive the affordable section of the real estate market. The rebate in interest rates, lowered home loan rates, and construction of affordable houses for the economically weaker section and lower/middle-income groups would encourage more purchases in 2018.
This would trigger the home buying process and make the affordable section of the society invest more in property. The ultimate effect of these affordable housing schemes would be reflected in the brighter prospects in Indian real estate in the coming year.
- Demonetization: With the immediate effects of demonetization over by the first quarter of 2017, the long-term impact of this move by honorable Prime Minister Narendra Modi would be seen in the real estate market. While immediate results of demonetization led to a dip in the real estate sales, in 2018, the real estate market would soon gain an expected pace. The cash crunch stopped the investment of black money in the real estate sector and encouraged more digital transactions.
The residential real estate already jumped by 70% in the first quarter of 2017 and saw a constant upsurge by the end of fourth quarter. The transparency in transactions and the revival of confidence in real estate will encourage the homebuyers to make more purchase in 2018.
In a nutshell, the transactions would become more transparent and there would be a revival in the homebuyers’ trust in the real estate sector. The sale and purchase of property would see a boom and the prospects for real estate in 2018 would become brighter than ever. All the recent government initiatives like RERA, GST, Pradhan Mantri Awas Yojana, Real Estate Investment Trusts, and the startling demonetization would drive the real estate sector in 2018 and make it more welcoming for the homebuyers.