The real estate sector has become more structured and accountable, post the implementation of various policy reforms, like RERA and GST.
The real estate sector has become more structured and accountable, post the implementation of various policy reforms, like RERA and GST, by the Modi government. Now developers just can’t keep doing whatever they want. Instead, in this new regime, they need to streamline systems, processes and practices to make the whole process transparent to the end customer. The government’s focus on affordable housing has also given a boost to the realty sector as this segment has become the fastest-growing segment in the realty market.
Regulatory reforms have also led to changes in developer strategies and customer buying patterns. We now see developers splitting their projects into smaller phases in order to reduce completion time, inventory overhang and manage cash flows. Additionally, end buyers are seeking security for their investments, and hence prefer to choose a developer with strong credentials and track record of delivery. Prospective home buyers’ tax burden has also eased, following a 4% reduction in the goods & service tax (GST) to 8%. This has led to higher sales momentum, particularly in the affordable housing segment. The Credit Linked Subsidy Scheme (CLSS) has also helped the affordable housing a lot. It has basically been a big step for the construction sector by increasing activity on the demand side.
Not only residential, but the commercial space is also witnessing a systemic change with more focus on developing smart spaces that are more people centric. These developments are interactive, lively and cater to the millennials. Developers are trying to be innovative by creating new-age & modern developments that are a mix of retail, hospitality and next-gen work spaces while also continuing with the existing traditional commercial developments.
Now, the established developers are expected to expand their scope of business categories. The premium housing feature is an add-on to the affordable housing. Developers catering to the low-segment housing have expanded their focus on spacious and efficient projects for buyers with deep pockets, a trend that is expected to gain further momentum. However, the trend of affordable housing has remained intact and is likely to get further momentum.
India will be almost 50% urbanized by 2030. Smart cities with smarter ways of living along with affordable housing will help solve the problems of urban areas. Hence, our intention must be to create a positive environment to attain the Government of India’s goal to achieve Housing for All by 2022.
(By Pradeep Aggarwal, Co-Founder & Chairman, Signature Global, and Chairman, National Council on Affordable Housing, ASSOCHAM)