The real estate sector in India is all set to adopt new and better changes following the proposed norms in the Budget 2017. In addition, the demonetization drive that was initiated in November 2016 is also a factor that has been showing significant impact in the real estate sector. The demonetization drive indeed created a chaotic environment across all spheres of life including real estate. But, experts opine that this turmoil will take a while to settle down and once everything gets back to normalcy, there will be greater transparency and buyer confidence pertaining to real estate sector. The current slowdown being witnessed in the property market will be short-lived and the real estate sector will gradually recover in the light of new government reforms, reduced interest rates by banks, and implementation of the Real Estate Regulation and Development Act 2016 by the states. The newly proposed real estate norms in the Budget 2017 are well-considered factors that will benefit both parties – the developers and the buyers. Certainly, the real estate developers will have to restructure their business model in order to accommodate and adhere to stricter compliance norms, but, in the long run, these changes will benefit their business as a whole. On the other hand, the buyers will have the assurance of a dedicated governing body, on-time completion of the project, including access to complete information on the project and amenities promised.
Owing to the several changes that the real estate sector is set to undergo along with the effects of demonetization, the first half of 2017 is predicted to be a slow run for the real estate sector. Also, buyers have put themselves in a wait and watch mode with the hope that property rates may be slashed including a decrease in home loan interest rates. However, in the long run, as the market slowly recovers from demonetisation, it will bring in more transparency and help organized and certified developers to procure land at more appropriate rates and construct more affordable houses and buildings. This transformation in real estate will propel the growth of buying property in India and result in achieving the objective of housing for all. Experts also view that builders will offer several schemes to revive the buying interest of customers. Schemes such as ‘book now, pay after three months’, ‘pay 10% now and 90% on possession’ along with the assurance of price adjustment in the event of price fall in the future and affordable home loans starting at 6% has resulted in creating more confidence among buyers. And, this is seen in the renewed interest in investing in ready-to-move-in properties and projects nearing completion.
In addition to the above-mentioned factors, the norm of Budget 2017 encouraging affordable housing, income tax rebates, and facilitation of capital gains tax will enable more buyers to invest on properties. Though these are new developments in the real estate sector, yet they are potential factors for boosting to buy property with the benefit of enhanced transparency. Purchase of property is never an easy task. It requires enough consideration because it is one of the most expensive investments people make during their lifetime. However, in the wake of so many real estate reforms, tax norms, and affordable rates of interest on home loans in the offering, purchase of property is predicted to set off on a smooth rise from the second half of 2017. Once the consumers are confident about the right implementation of proposed norms and once they receive the assurance of the builders regarding pricing, project completion timelines, and other statutory compliances, buyers will choose to invest in properties.