Change is the Only Constant

“Change in the only constant”. The proverb aptly describes the year 2017, which has been a watershed year for the real estate sector. The year witnessed everything, from passage of critical reform bills, including Real Estate (Regulation and Development) Act (RERA) and Goods and Services Tax (GST), to radical reform measures like Demonetization of specified bank notes.

Naturally, these developments were accompanied by uncertainty and volatility. But despite the transformative phase, the Indian economy still is one of the fastest growing economies in the world. Amid the concentrated push by the Government to increase formalization levels of the economy, it is likely to emerge as the fastest growing economy across the globe again soon, notwithstanding the current inflationary pressure.

The realty sector is also witnessing a paradigm shift. With various reform measures already initiated, the realty sector is likely to become more transparent, compliant and business friendly. This will help the sector battle the perception of consumer distrust, primarily on account of delay in delivering projects.

During 2017, beginning with the budget 2016-17, the government has announced slew of measures to boost ‘Affordable Housing’ including providing infrastructure status to affordable housing, albeit with conditions. This provided much needed support and cushion to the sector as most of the demand and launches during the year happened in the ‘Affordable Category’. It has come out of the shadows and affordably priced units are selling in most cities, with the trend more pronounced in tier II and III cities.

It has also been a year, wherein government announced changes in ‘Credit Linked Subsidy Scheme’ thus providing much needed impetus to the real estate sector, particularly ‘affordable housing’. With housing shortage of more than 11 million, the push to ‘Affordable Housing’ also bodes well for the overall objective of the government to provide ‘Housing for All by 2022’.

With impact of demonetisation receding and the dust of RERA and GST settling down, the worst phase of real estate sector, particularly residential segment will be over in 2018. In our view, tier II and III cities will continue to outperform major cities.

However, the most important factor that could trigger the revival of the sector in a sustained manner is ‘timely delivery’. The time is ripe that the entire industry must fulfill its commitment in a time bound manner. This will help in regaining the trust and confidence of the customer – paving the way for a better tomorrow.

For timely and speedier delivery of projects, it is also paramount that government does away with multitude of approvals that a developer needs to take for starting a project. If obliged, the year 2018 could well turn out to be the most defining year for the sector.

Hoping for best! Wish you a great year ahead!