India’s real estate market is going through tough times as far as sales and new launches are concerned. The scenario of the real estate market is not same as it was five years ago. In 2007, the real estate market was booming but slowly the realty market started dipping. The performance of the real estate sector was worst in the year 2015 but the recovery has also not been substantial in the current year as well.
The real estate market witnessed lowest number of new launches in the top eight cities of India. Currently, the recovery of the real estate market will depend on lower interests rates, completion of the projects, control on the piling of unsold inventory levels, increased sales, and definitely an improved buyer’s sentiments.
In fact, the announcement by the government with respect to certain reform measures like the Goods and Service Tax (GST), and the Real Estate (Regulation and Development) Act are a few steps in the right direction that will help to bring transparency and tax benefits for the real estate market.
The tax structure that the real estate developers have to go through is turbulent and stringent. The real estate in India faces a lot of challenges due to multiple indirect taxes such as VAT, service tax, excise, stamp duty and registration fees. The GST will now club all the multiple indirect taxes and help in simplifying the India’s tax regime. It will be of great help for the real estate developers.
Currently, the real estate properties sector is the second largest employment generator in the country and accounts for five per cent of India’s Gross Domestic Product (GDP). Keeping this is mind, the government has come up with new policies like RERA Act, which will help to provide transparency and help builders in the completion of stalled projects. The act makes it mandatory for the builders to park 70 per cent of the funds collected for a project in dedicated escrow accounts, and funds cannot be diverted to any other project. It becomes mandatory for developers to post all information related to project plan, government approvals, land title status, layout including other documents for the use of consumers.
Besides this, the government has also focused to build “Housing for all” by 2022. The intention of the government is to develop affordable housing for the weaker section of the society. The affordable housing will be public and private partnership projects. The programme will further help to build and develop affordable housing for urban poor nearly targeting 20 million houses over the next seven years.
Building the ‘Smart Cities’
The government has now decided to build smart cities in the country to provide world-class infrastructure, public transport, education system, Wi-Fi, healthcare services including others. Technology is going to play a vital role in the development of smart cities in India. The real estate sector is adopting smart technology for the development of projects in top cities of India as well as in the nearby areas.
The new development and opportunities in the Indian real estate will help in the revival of the sector and attract potential investors as well as home buyers in the near future.