New Delhi, December 30, 2018: This year has been a roller coaster ride for the Indian real estate sector. A significant growth was observed in the first three quarters of 2018, a nearly 8% more to the same period of the last year. But the industry still has a long way to go to reach its true potential. Implementation of new regulations in the real estate such as RERA and GST has had an enormous impact on the industry.
Policies such as RERA and GST afflicted the industry at the initial stage but with its progressive adoption and implementation, a lot of transparency and structuring got formulated in the industry. The year 2018 saw all affordable housing becoming the nucleus of the residential real estate. With the boost in demand of co-working space commercial real estate got a new strapping face.
Real estate sector was hit by the liquidity crisis owing to financial obligation default by a NBFC in the latter half of the year which crippled the market and left it high and dry. As the Indian real estate is embarking on 2019, the sector can hope for the more meaningful intervention with an impact to relieve the market from agony of the ongoing liquidity crunch.
Performance of the sector in 2018:
The sector seemed to get back on track in the earlier quarters of 2018 after the triple tsunami of new regulatory reforms like RERA, GST and demonetization. Right after the completion of the first year of RERA and GST was announced , it had a mixed impact on the market.
Residential property sales went up by 25% in the top 7 cities of the country from January 2018 to June 2018 according to a report by CREDAI and JLL India. In the wake of demonetization the property sales took a slew but the industry was able to overcome it in a short span of time.
DP 2034 was actioned in the month of November which reinforced the trust of investors in the sector and sent a wave of optimism amongst realtors. It has laid the stones of foundation for an improved real estate sector in the imminent year.
Affordable housing sector:
The year 2018 has proved to be a pivotal year for the affordable housing segment. A data released by the Ministry Of Housing and Urban Affairs shows that more number of houses have been sanctioned under the Pradhan Mantri Awas Yojna (PMAY), the flagship scheme for government’s “Housing for all 2022” programme. This has paved the way for developers to come up with more number of affordable housing projects.
The country’s real estate developers have also acknowledged the facts that the need of affordable houses has got a significant boost from the policies of the government and more affordable housing projects are in the pipeline. Talking about the most recent events, the budget proposed by the government in 2018 focused on encouraging the affordable housing projects. Previously the Union Budget of 2017 also significantly increased the allocation for PMAY from Rs 15,000Cr to Rs 23,000Cr which was directly 39% higher than 2016. Granting this infrastructure to affordable housing is one of the major steps taken as it aims at stipulating cheaper source of finance to developers along with opening new and additional avenues to raise funds for the developers. The real estate sector has witnessed a paradigm shift in the aftermath of rising demand of affordable houses.
Scope for the market in the imminent year:
We expect the year 2019 to be a positive one for Commercial real estate as 2018 saw a major reinforcement due to the rise in demand of co-working space. Commercial real estate may become the new poster-boy of the real estate sector.
2018 saw a significant growth of e-commerce which accelerated the demand of warehousing space in the country. It has attracted the attention of realtors and there is an adequate equity present to be infused into well located, clean parcels with good promoters.
Overall 2019 looks promising and will bring positive changes in the sector which will make the sector more organized and consumer centric.
Corporate Comm India(CCI Newswire)
