Previously, the Indian real estate witnessed a drastic dropdown in the sales of luxury housing in major parts of the country. The last two years brought several regulatory reforms in the real estate of India that includes the final implementation of RERA and GST. These reforms have brought major relief to all property seekers who are in a search of buying a mid-segment and luxury properties in India. The slowdown period is now getting back on track and according to experts, will gain momentum. Though price always remains a prime factor for all property seekers looking for a property in the middle segment unit, it isn’t the same for those searching a property in the luxury segment. While investing in the luxury segment of the Indian real estate, the amenities also hold importance for the buyer. Here are some reasons that revived the luxury real estate of India after the GST rates dropped down.
Investments By NRIs
The luxury side of the real estate of India has always lured the affluent and it includes the NRI investors as well. As per the FY’18, one-fourth of the luxury real estate of India was dominated by the NRI investors and between 2013-2018, 20% of luxury properties were purchased by NRI investors in India. According to B.S. Nesara, E.D of Concorde Group (Bangalore), factors such as rising income and aspirations, recognition of the city as a global corporate center, and increasing customer-friendly regulations are stoking the demand for luxury properties in Bangalore.
Deduction in the GST was much required for boosting the sales in the high-end segment homes in India. Previously, homebuyers were stepping back from purchasing an under-construction luxury property due to high GST. The slowdown of unsold luxury properties is now gaining pace because 1% GST doesn’t burn a hole in the pocket of high-end segment home buyers. The tax rate for the affordable luxury flats has been reduced from 8% to 1%, which clearly indicates that all high-end segment homes have been put in affordable housing category.
Escalation of International Business
The demand for different types of luxury properties is steadily rising due to the escalation of MNCs and businesses over the past few years all over India. As per the reports of Spectrum Metro, major metro cities of India witnessed the supply of 12,090 units in the luxury segment during 2018. MMR recorded 6, 3100 units followed by NCR with 2,650 units. This figure itself tells about the marked difference from 2017 when cities witnessed a decline of nearly 50% for houses priced 1.5 crore and above.
These three factors listed above have induced more investment in the luxury real estate of India. However, many experts recommend purchasing the property rather than investing in it because of zero inflation, all thanks to RERA and reduced GST. Since the sales were facing a slowdown, the reduced GST rates will benefit all property buyers looking for unsold high-end segment homes.