Hit hard by November 8 demonetisation, the real estate industry is looking forward to better days after implementation of NDA government’s two biggest reforms – Rera and GST – in quick succession.
Real Estate (Regulation and Development) Act, or Rera came into effect on May 1, while the Goods and Services Tax (GST) kicked in on July 1, just two months later.
Banks have also added to the positive sentiments by cutting interest rates for home loans.
Meanwhile, in a further boost to the real estate industry, the Reserve Bank of India has prodded banks to lend more to homebuyers. It has already reduced risk wieghtage for loans to the sector.
Kushagr Ansal, director, Ansal Housing, said, “A common feature of Rera and GST is that both of them boost buyers’ sentiments. With Rera, buyers now have a place where they can get their issues resolved and with GST, uniformity in taxation that will provide clarity to the buyers.”
“This boost to the sentiment will help the demand graph to pick up momentum in the coming months and we project the sales to grow by 5-10 per cent annually over the next 3-5 years,” he said.
Rajesh Goyal, vice president CREDAI-NCR & MD, RG Group, too agreed with Ansal’s assessment.
“Rera and GST have been by far been the two biggest reforms that Indian real estate has witnessed in such short succession. With the sales volume slightly dipped over the last 6-9 months, the combined effect of these will benefit the sector in the long run. Sales in the realty sector will be the real benefactor as transaction volume is expected to rise riding on the strong customer sentiments,” Goyal said.
Ashwani Prakash, Executive Director, Paramount Group, said, “Rera’s impact will be seen more in the residential real estate segment, while GST will be greatly beneficial for the commercial realty segment as all the lost CENVAT credit can now be availed.
“Also, with the input tax credit benefit to be passed onto the buyers, overall demand is expected to pick up pace by this year-end around the festive season,” Prakash stated.
Rakesh Yadav, chairman, Antriksh India Group, said, “Since demonetisation, real estate sales have seen a slight slump with the focus area of the developers moving towards project completion and delivery. With both Rera and GST operational across the nation, demand in the medium to long term will see a major thrust as real estate market will become absolutely barrier free.”
“Project launches will be a prominent sight in the final quarter of this financial year and succeeding few quarters,” Yadav added.
Parth Mehta, MD, Paradigm Realty said, “Demand for flats in the project being undertaken by his company is robust.” He also said that the buyers look at the builders’ reputation, approval for project and financial closure.
noor.mohammad@mydigitalfc.com