Residential real estate in India set to revive

The real estate infrastructure in India is improving rapidly in recent years. It is likely that the residential real estate segment will make a revival in the coming years. Recent trends in real estate have been positive. After the slowdown in the last few years, the real estate industry in India is all set to revive. This resurgence is mainly due to the reforms made by the government in the last few years. This has increased the transparency and enhanced the business environment in the country to a significant extent.

The GST and RERA are two of the most important factors, that have shaped the industry in recent years. However, other factors have also contributed to the revival of the real estate industry. After the implementation of GST and RERA, statistics reveal that sales in housing have increased by 6% in the top 8 cities in India in 2018. Besides, the number of new launches of homes has increased by 75%m as compared to 2017. Unsold inventory has also witnessed an 11% drop.

The growth outlook looks positive for both the commercial and residential real estate sectors in India. Estimates reveal that by 2030, India is likely to have a $1 trillion real estate market.  In 2017, GST and RERA were introduced. For the real estate sector, this proved to be a watershed moment. The regulatory framework has been tightened by the structural reforms in a sector, that was previously unorganized and fragmented. This has made way for a more consolidated market. The real estate industry has matured over the years. This has made it capable of sustaining investment and growth.

 Through the implementation of RERA, the real estate industry has received a boost. The buyers have been empowered and the serious players within the real estate sector are presently better placed, thanks to the track record of projects that have already completed. The buyers are now more confident to make real estate purchases. The industry is still undergoing change and in the long term, the real estate industry is likely to strengthen.

The role of GST has been pivotal, too, in reviving the real estate market. It has injected more accountability and transparency in the sector. The tax structure has been simplified and a greater compliance is now leading to consolidation of the real estate sector. From 1st April, 2019, the rate cut in GST was applicable. This will further ease up the sector and increase the demand for housing. In the premium housing segment, the tax rate for under-construction projects is presently 5%. This has been decreased from 12% in order to make the purchases easier. The tax rate in the affordable housing sector has been decreased from 8% to just 1%. Besides, the GST Council has eliminated the Input Tax Credit system, further reviving the sentiments of the property buyers.