Page 24 - CV April-May 2019 issue

After a year of important reforms,
the future is looking brigh
particularly when it comes to
affordable housing

INDIAN REAL ESTATE IS ON AN UPWARD TRAJECTORY

ndia's real estate sector witnessed which caused confusion. GST has come as industry. The real estate sector will be
some significant developments over the a relief for both, by bringing clarity into the institutionalized, and probably have
Ipast year-and-a-half. These have process. Moreover, it will lower the cost of fewer—but larger and more
changed the face of the industry and augur construction, and bring more liquidity into reliable—developers in the years to come.
well for it in the long run. The sector has the market.
As the industry adapts to all these
become more transparent and organized
The sector will also benefit from the developments and trends, it is likely that the
owing to recent policy changes and
amendments that were made late in 2016 residential real estate segment will pick up
consumers are better off for these.
to the Benami Transactions Prohibition Act. in the first half of 2018. Home loan interest
The reforms began in May 2016, when the This, coupled with the central government's rates have gradually been decreasing over
Real Estate (Regulation and Development) stated intent to make Aadhaar linkage the past few years, and banks and financial
Act 2016 (RERA) came into force. The Act compulsory for all property transactions, will institutions are offering varied, attractive
came into full effect from May 2017, help in curbing malpractices and stopping schemes to incentivize customers,
bringing unprecedented levels of the inflow of black money into real estate. particularly for ready-to-move-in properties.
transparency into real estate projects. The recapitalization of banks will also
All these developments are highly
RERA promises to minimize delays in rejuvenate the banking sector and give a
significant. They will not only bring
projects, weed out unscrupulous boost to lending.
transparency and accountability, but also
developers, and provide homebuyers with
consolidation in their wake. Developers This will spur healthy competition between
detailed information on the specifications
need to be sufficiently funded to achieve different actors and ultimately result in
and the progress of the projects they invest
RERA compliance. Small or cash-starved cheaper loan options for consumers. The
in.
developers will probably have no choice but Reserve Bank of India had slashed key
RERA was followed by the introduction of to partner with larger, established players to interest rates by 25 basis points (a basis
the goods and services tax (GST), which survive. Moreover, unscrupulous point is one hundredth of a percentage
rolled many different taxes into one. Until developers—big or small—will have no point) in August, and kept the repo rate
then, both consumers and developers had place to hide in the transparent unchanged in December.
to pay multiple, and often varying taxes, environment that RERA will usher into the

22 / CONSTRUCTION VISION / May June 2019