A promising year for India’s real estate sector, say experts at RNA Corp

New Delhi, February 08, 2018: The year 2017 was completely action-packed for India’s realty sector. Demonetisation and GST dominated the country’s real estate segment, particularly in the National Capital Region (NCR).

Experts at RNA Corp believe that 2018 secures great hope for the realty segment. It promises to be different, at least in some of the prominent areas. Various studies indicate the revival of the realty market in the upcoming months.

According to Gokul Aggarwal, the director of RNA Corp, cities like Bangalore, Pune, Mumbai, Delhi NCR, Kolkata, Chennai and Hyderabad are among the top cities where real estate sales are expected to grow at the fastest rate. Affordable housing is likely to emerge as the defining trend this year, as a huge number of builders planning to launch affordable housing projects.

With the slew of measures initiated by the Centre, India’s real estate is likely to revive, believe RNA Builders. The prevailing trends indicate a major increase in the global capital flow into the Indian real estate.

With another year passing by and the date for Union Budget 2018-19 fixed for 1st February, the real estate sector is expecting a major boost. Analyst at RNA Corp believe that the Budget’18 is likely to be well balanced and pragmatic. They looking forward to a populous Budget by the Finance minister Arun Jaitley and anticipate it to be a common man’s budget, which will introduce a number of positive changes and address the major concerns of realty sector.

Budget’18 is likely to focus on the policy of housing for all at affordable prices as well as bring positive changes in the income tax structure. At present, the goods and services tax (GST) rate levied to real estate (i.e on sale of flats) is 12 per cent of the sales consideration. Apart from this, the stamp duty is applied as well. As a result, the effective tax rate becomes quite high, in comparison to the old rate of 5.5 per cent. Certainly, it is a viable option to abolish the rate or merge it with the GST. Considering these factors, realty experts expect an amendment in the present GST rate along with the abolition of stamp duty.

The implementation of Real Estate Regulation and Development Act (RERA) has contributed significantly in protecting the buyer’s interest and ushering in the much-needed transparency in realty sector. The Act is looked upon as a major confidence booster for the buyers since it will expedite the completion of construction projects, besides putting an end to unnecessary project delays and low quality of construction. It has now mandatory for builders to register a property with the regulatory authority before marketing it.

As an aftermath of RERA, there was a significant increase in the number of errant builders who were unable to complete their projects. As a result, the interest of the buyers ebbed to a great extent. However, current trends show that the demand in the realty sector is expected to shoot up extensively, say analysts at RNA Corp. This will be effective in purging the stagnancy due to the unsold inventories, piling up since demonetization.

In the words of Anubhav Agarwal, the Managing Director of RNA Corp, “The act is expected to make the business more disciplined, helping builders in the long term. It will also help builders not to get over leveraged as money cannot be diverted, and will be limited to projects. The sector is expected to receive more attention from foreign institutional investors, given the improved transparency and better systems being in place. This will help attract foreign investments for government as well as for the builders, and in turn give a fillip to the sector.”

With radical changes entailed in the regulatory framework, India’s real estate sector is likely to emerge as an attractive option for global as well as Indian investors in 2018.

Corporate Comm India(CCI Newswire)