By Mr. RK Arora, Chairman, Supertech India Private limited.
The last year has been a tumultuous one for India’s real estate market. The extreme ups and downs have left the sector looking almost completely different from what it used to look like, just the year before. While the sector experience the full impact of demonetisation and GST, the availability of cheaper finance schemes kept the market going. The increasing availability of affordable housing in India, enabling homebuyers to make purchase decisions for homes that meet their financial budget as well as easier financing options has enabled many more people to become part of the organised real estate market in the country.
Several major policy amendments changed the status of the Indian real estate market. These were aimed at removing black money and improving the transparency of large financial transactions. These amendments along with better regulations on quality of construction etc have made the residential property sector much more attractive to investors and consumers. This along with the establishment of the Real Estate Regulatory Authority (RERA) which brought in significant protection for home buyers has gone a long way in bringing back confidence in the sector.
In 2018 however, affordable housing was the real game changer. The government’s flagship ‘Housing for All by 2022’ vision which brought in a number policy shifts that have redefined a large part of the sector. As part of this initiative the government announced an additional allocation of 39% in this financial year under the Pradhan Mantri Awas Yojana (PMAY), along with an extension in the CLSS (Credit Linked Subsidy Scheme) to loans up to Rs. 12 lakh till March 31, 2019. To augment the benefits of affordable housing, the Union Budget announced a new CLSS for the mid-income group with a provision of Rs. 1,000 crores. Mission requires 1.2 crore urban homes and another 1 crore in rural India to be built.
This year saw the residential sector gain maximum prominence as far as foreign investment goes, with the highest foreign direct investment (FDI) inflows in 10 quarters coming in. Several real estate developers have confirmed that the majority of sales volumes has come from the affordable segment.
While the first half of the year saw the downturn continue to hit the sector, recovery has been slow and steady in the later half. The sector is not just seeing huge growth in the affordable segment, but now even the luxury side is seeing some significant movement. Supertech’s marquee projects Supernova and NorthEye are seeing a huge amount of interest amongst HNIs across the country. The luxury and premium luxury segments are fast becoming the drivers of the real estate market as is the case with affordable housing. Aspects like design and services are becoming the key differentiators as buyers become more and more discerning.
Real estate, like gold, as an investment has always been seen as one that will always give positive returns. Housing sales volumes have gone up by approximately 13% for FY18 in the top 8 Indian cities. This comes after 6% growth in sales is posted by the real estate sector this year. MMR (Mumbai Metropolitan Region) posted the highest growth of 25% out of all these markets as per reports. Delhi-NCR came in at second place with 19% growth in sales.
The coming year looks bright with over 1.8 million houses were under-construction as of March 2018, compared to 700,000 in April 2017. Because of increasing urbanization and the government’s active support, affordable housing, which was previously a neglected segment, is gaining considerable mileage in recent times. The financial support from the government and the thrust in policies are driving more and more developers to make inroads into the fairly untapped segment.
The residential sector was also aided by a significant increase in corporate leasing activity driven by the growth in the economy.
Thus, the economic upturn and increasing stimulus that is coming into the sector as investment is driving growth in the coming years with various housing developers getting more and more bullish for better returns.
Corporate Comm India(CCI Newswire)