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Indian cities like Bangalore and Mumbai are anticipated to top the charts as the most attractive places for real estate investment and development leaving behind the three-year topper places like Sydney and Tokyo which scored high in terms of popularity. This clearly indicates that Indian Real Estate is emerging to be a shining star in the real estate market across the globe.
The Indian Property market initially was into doldrums due to several reasons like its instability, ambiguity, and changing property trends but with the landmark reforms taken in the year 2016 in terms of property investments, the coming year 2017 is expected to be a bumper year both for buyers and investors.
The radical and transformational reforms like Demonetization, GST, RERA, Benami Transactions Amendment Act, etc. are all expected to have positive and drastic implications on the home buyers as well as Residential Real Estate in India. These reforms are aimed to make the realty in India more transparent, trustworthy and organized with only few disciplined players on the ground.
Let’s have a brief look at the changing scenario of the real estate industry in India:
The Pradhan Mantri Awas Yojana: On June 2015, Shri Narendra Modi, announced about the much needed initiative of “Housing for All by 2022”. In his efforts to make this goal turn into a reality, he further made an important announcement on the eve of the New Year 2017, which was his new interest rebate policy in this scheme. While the whole nation was tensed due to the demonetization drive, this announcement came as a wonderful surprise especially amongst the middle and lower income groups and gave them a thousand reasons to smile. Aimed to spark the home buying process for a huge number of potential homebuyers and to make the investment quicker and comfortable, this new twist in PMAY, will let people pay easy installments for the houses they purchase. Rather than paying huge amount of rents every month, this reduction in the interest rate (up to 4%) will help them to purchase their own piece of earth. The reduced rate of interest would lower the EMI to as low as Rs 7000, an amount which normally people pay as house rent in semi-urban and urban areas.
The demonetization drive was a much talked about topic in the last quarter of 2016 that took the entire country by a shock. This solid move by the Prime Minister was aimed to curb the black money hoarding taking place in the system. The property market dampened suddenly post the currency ban on November 8th, 2016. However, this initiative would also have positive implication on this sector as it will make the property market more transparent and reliable, leaving no place for any sort of ambiguities. The scraping-off of these notes will help in cleansing of the real estate industry and weed out the undisciplined and corrupt players. There won’t be much of an effect on the organized real estate market but it would definitely give a hit to the resale sector as this is the segment where most of the black money transactions take place and with this initiative, a remarkable price correction is expected in the same. People would prefer making investments in the primary sector and that too in the projects being developed by trustworthy and quality brands. The market will be more of “growth focused” which shall be for the benefit of the economy as a whole.
The Real Estate Regulatory Authority Bill was a much awaited one as it is expected to bring transparency and professionalism in the entire transition system. Also, since this bill is “for” the home buyers so it shall protect and safeguard the interest of the buyers to the best possible extent. As a result, with the passage of time, there shall be an increase in the number of purchases made. The developers will have to give all the details and other required information about the project, beforehand, and the buyers will be able get a solution to their problems against the builder.
Thus, as a result of all these policies set by the Indian government coming into form, the Indian real estate market will slowly and gradually become the most organized and disciplined sector of the country. The year 2017 will be the best for buyers as with lower cost of funds and surplus liquidity with the banks, the lending rates will come down. There shall be a relaxation in the requirements and margins for home loans and more and more people would opt for the same.
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