The realty sector has undergone a massive transformation during the past 2 years on the policy front, which is likely to benefit it in the long run.
The combined effects of the real estate law, the goods and services tax (GST) and demonetisation hurt India’s real estate sector in such a manner that 2017 became one of the worst years for residential real estate. Sector players hoped for better times in 2018. Although some positive signs were visible in 2018, but still a lot remains to be done.
According to a Proptiger report, on the positive side, the downslide in homes sale numbers has been arrested and the sector has moved out of the bottom of sales cycle. Since building within the deadline is mandatory under the real estate law, completion rate of housing projects has improved, too. “While there is a lot to be done before it is able to benefit the sector in a manner it is expected to, the real estate law gained ground in 2018. And affordable housing continues to get the government’s attention. However, the sector is not short of challenges as issues pertaining to lack of capital have emerged during the year while some bankruptcy cases against developers stay unresolved,” says the report.
Across cities, there has been a significant rise of 55% in unit completions over the previous year (2017). Mumbai and Pune contributed nearly 36% of the total unit completions during 2018. Kolkata, on the other hand, witnessed a decline of 19% in the number of units delivered. It is expected that around 8.78 lakh units may be delivered by the end of 2020, of which about 2.5 lakh units are likely to be delivered in Mumbai alone.
Whatever be the case, the realty sector has undergone a massive transformation during the past 2 years on the policy front, which is likely to benefit it in the long run. Developers, therefore, are bullish on its growth prospects.
For instance, Manoj Gaur, MD, Gaurs Group, and V-P, CREDAI National, says, “This year has been a favourable year for the entire real estate sector. With RERA in place, buyers gained more confidence in investing in properties. The demand was seen in all the categories of real estate — be it newly launched, under construction or ready-to-move-in homes. As per market reports, Greater Noida led the way in NCR as we too saw an increase in sales in our township project Gaur City during Q1 & Q2 and also during the festive season. Our other projects on Yamuna Expressway and in Noida & Siddharth Vihar too saw huge upsurge in conversions, clearly showing that any developer who has delivered in the past, has the buyers’ trust and is constructing under the RERA guidelines, will do well. We hope that 2019 will be another great year for the nation’s real estate sector.”
Nakul Mathur, MD, Avanta India, also believes that 2018 has been an enthusiastic year for the real estate sector. “Buyers gained more confidence in buying properties with the implementation of RERA, either be it residential or commercial. Also, there have been many new trends which were witnessed in 2018, including the emergence of co-working spaces. The improved transparency and accountability in the sector proved to be a boon for both the buyers and builders. Now 2019 is expected to bring an upward thrust with some favourable changes in the real estate sector. We really hope that this year will be even better and successful for the sector.”
Some developers think that this may be a good time to buy one’s dream home as prices may start rising soon. “With the fresh supply of property being very limited and ready-to-move-in inventory almost finished, prices will start increasing soon. This is, therefore, the best time for the buyer to purchase property,” says Gaurav Gupta, General Secretary, CREDAI Ghaziabad, and Director, SG Estates.