Corrections required in developers' mindset to address the need for the day

The Real Estate Industry in India has been going through turmoil after the recent changes in the government policies. In the real estate sector, the biggest component was cash. With the overnight demonetisation decision by the Modi Government, the residential market in India has slowed down. The Property investment in India has been sidelined by the prospective customers all thanks to demonetisation. And just as people were recovering from the change in currency, the introduction of RERA further rocked the industry. Introduction of Real Estate Regulation Act is one of the biggest steps in the direction of corporatisation of the sector in India. With RERA in place now, launch without sanction, delay in deliveries, and any unauthorised changes in the plan can lead the developers in a huge trouble. The introduction of GST (Goods and Service Tax) has also affected the real estate sector, as it has brought a lot of procedural changes, which has again hampered the sales of property in India in the last year.

With all these major changes introduced by the government in India, the need of the day is the introduction of certain changes in the landscape of the real estate projects to make them affordable and boost the real estate investment in India. A new way of doing the business needs to be introduced by the developers to enable themselves to sustain in the market and that too without any violation of the laws that can lend them into serious trouble. The certain changes required are as hereunder.

The size of the homes needs to be reduced to make them affordable as well as lucrative. The luxury market in India is very limited as compared to the affordable housing. Though the luxury housing might see a slack, the affordable housing is still in very much boom. There has to be a rationalisation. The real estate consultants in India are suggesting going for a greater volume of affordable housing projects as compared to luxury homes. They would generate a higher return as the selling would be easy not to forget that there is time value attached to money. Besides the recent changes in the policies and introduction of RERA timely delivery of the project is compulsory. To make the future bright it is only advisable that the ongoing projects be completed first building in the trust rather than going for new launches.

The unused lands now need to be put to use. There are a lot of investors who have ample of historic land and are sitting on them idly waiting for the prices to soar. However, if we ignore a few prime locations, the land prices have seen a correction in most areas. What is feasible in such a situation is to enter in a JV and develop the said land to see better returns.