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The year 2017 has not been a good year for the real estate sector in India, following a number of policies imposed by the government. Following the demonetization in 2016, the inception of RERA and GST in 2017 have further increased the financial constraints for the developers. At the beginning of 2018, the big question is, will the industry recover from the cash crunch this year?
In terms of sales and growth in prices, 2017 has been one of the worst years for the developers. The real estate sector has been one of the most popular investment areas in the Indian market. However, 2017 has not been a good year for the investors as a result of stagnation in the market and a dip in property prices. Besides, the housing sector was a good segment to store black money. With the stringent policies of the government coming into play, the real estate sector has witnessed more transparency.
Between the first to third quarters of 2017, 1.6 lakh units had been sold, according to a research. Compared to the sales figures in the same period in 2016, 2017 shows a decline in sales by 30%. Apart from this, the number of new launches of properties was also lower than the previous year. The number of units added in the top seven Indian cities during the period was only 94,000. This shows a drop by as much as 50%, as compared to the figures in 2016.
However, according to the experts, the real estate industry in India is passing through a transitional stage. The reforms being undertaken by the government are likely to shape the industry, making it consumer-friendly.
Evaluating the policies incorporated by the government in 2017, it is evident that the homeowners will not remain at the mercy of the developers any longer. Moreover, the policies will ensure that the developments are taking place according to the demand for these properties. Although the industry has witnessed a lot of troubles as a result of these reforms, the impact has been in favour of the homeowners.
In 2018, one of the key developments in the real estate sector will be the Affordable Housing policy of the government. The homeowners from the lower and middle-income groups will be able to buy flats at reasonable costs. The government has also taken measures to change the definition of the term ‘affordable housing’ in order to include a larger buyer group.
Well, with these measures coming into action, 2018 is likely to see an increase in investment in the real estate sector, although property prices will not undergo a hike. The price ranges are likely to be similar to those of 2017 and homebuyers will have more options, with a larger number of projects being completed this year.
Although 2018 will not come up with a sparkling recovery in the real estate sector, the market conditions are going to be better, in comparison to 2017. Buyers are more likely to invest in the properties and the real estate economy will recover to a certain extent. However, the industry is going to be cleaner with a reduced number of corrupted developers. More funds will flow into the hands of the investors, making the industry friendly to the middle and lower income groups. Evidently, 2018 is likely to witness the recovery of the real estate sector with a more transparent business infrastructure.
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