Indian real estate went through one of the most challenging phases in 2017. Despite the slowdown in the sector on account of the recent reforms, there have been some positive takeaways for the long-run. Going forward, in 2018, it is expected that the teething problems around RERA and other policy changes such as GST would ease out and a new order of transparency and efficiency shall be the norm.
Although the demand for residential property is unlikely to recover drastically in the short term, there will be a deliberate shift of focus towards building more affordable homes or projects with smaller configurations, leading to a reduction in the overall ticket size. Further, declining interest rates and a supportive credit-linked subsidy framework would improve affordability, thus benefitting home buyers.
While GST would provide an audit trail for better control and monitoring of the sector, RERA would ensure timely delivery of residential projects, boosting buyer confidence. Resurgence in buyers’ confidence will ensue as and when they see RERA working in their favour; and would eventually bring back positivity to the market. Thus, with the project development risk minimized by the implementation RERA and GST, investor confidence is expected to return to the real estate sector in 2018.
To conclude, the prime factors that could impact real estate in 2018 are – positive economic growth of the country, improvement of infrastructure, increased PE inflow into the sector, a balanced rate of GST for the sector – both buyer friendly as well as revenue friendly, and strict adherence to RERA guidelines, amongst others. These factors shall infuse positive buyer and investor sentiment into the real estate market, abetting its growth in the years to come.