With Indian cities like Mumbai and Bangalore predicted to top the list of the most attractive cities in terms of investment and development, India sure is rising in the real estate development race. It has, in fact, left behind three-year topper cities like Tokyo and Sydney in terms of popularity!
Even the Indian home buyers who were hesitant in trusting the real estate because of the unstable market and the changing property trends in India would be seen investing more and more in this sector. All this could only be made possible because of the recent moves taken by the Modi Government. Let’s have a look at these moves and what implications they would have in the 2017 Indian real estate market.
Demonetization Of Rs.1000 And Rs.500 Notes
Demonetization was indeed one of the hottest topics that stirred the Indian population during the last quarter of 2016. It was the perfect move by PM Narendra Modi to curb the pile-up of black money in this sector. The sale of real estate came to a sudden halt after the demonetization move on November 8th, 2016. However, many real estate experts have suggested that this pile up of inventory due to low sale would lead a downfall in the property price in the year 2017. In fact, this move would also make the transactions in real estate more clear and transparent.
The resale sector is the one where most of India’s black money is invested, and with this demonetization move, there would be a correction in the price in this sector. Other than that, people would also prefer investing their hard-earned money in the primary sector and that too which is developed by well-known and trusted builders.
Pradhan Mantri Awas Yojana
On the eve of New Year 2017, PM Narendra Modi surprised the Indian populace with his new announcement. People were expecting another shocking move like demonetization but PM Modi, instead, surprised them with his new interest rebate policy in the Pradhan Mantri Awas Yojana. This was launched on 25th June 2015 to achieve the much talked-about goal of “Housing for All by 2022”. This new scheme in PMAY would allow people to pay easy installment for the houses they buy. This would definitely trigger the home buying process for a number of potential buyers. This scheme is much more beneficial for the people belonging to the middle and lower income group.
This reduced interest rate (up to 4%) would compel people to buy more houses rather than paying the whopping house rents every month. This interest rebate would lower the EMI rate and would take it to as low as just Rs. 7,000, a sum which most people usually pay as house rent in urban and semi-urban localities.
Real Estate (Regulation and Development) Act
The Real Estate Regulatory Authority Bill was highly anticipated by the Indian buyers. This bill would bring transparency in the entire transaction process. Not just that, it would also protect the interest of all the home buyers. This act would allow home buyers to put more trust in the buying process. Its effect would be clearly visible in the year 2017 as people would start buying more property with the passage of time.
With the passing of this act on March 10th 2016 by the Rajya Sabha, people would now be able to get redressal of any of their grievances against the builder through the State Government. The developers would also be asked to give all the necessary details about the project beforehand making the entire process more transparent.
These new policies set out by the government have gradually led to the build-up of the Indian real estate market. However, this is a mere forecast for the Indian real estate for the year 2017, let’s wait and watch what the year actually brings.