As Santa Claus time comes closer, I look at the ‘gifts’ that we received in 2017.
The positives include the Ease of Doing Business rating, Moody’s positive rating update, and the GDP growth factor.
In 2017, demonetisation was, arguably, the single-most important factor, which positively impacted real estate, in terms of encouraging digital payments in real estate transactions. It was just the beginning of a ‘new regulatory regime’, which continued to introduce us to newer regulatory norms through 2017, a year that will be remembered as the year of a paradigm shift in terms of Indian real estate.
In the affordable housing segment, we expect the PPP model to take off and make a major difference.
Then, we had the Benami Properties Act, followed by RERA and GST – and then, the amendment made to the Bankruptcy and Insolvency Code. This is a list of new regulatory aspects which impacted stakeholders. This paradigm shift changed how real estate transactions happen.
From Jan 2017 till the festive season started towards the second half, 2017 was largely a slow market – slower sales and a ‘wait and watch’ attitude from home seekers.
The commercial real estate did well across 2017, and we expect 2018 also has the same paradigm shift and do even better. REITs are still at the ‘take-off’ stage, we hope to see REITs ‘take flight’ in 2018.
Affordable housing emerged as the driver of Indian real estate growth through 2017, given the initiatives and support from the government.
Record low-interest levels provided the extra ‘boost’ needed to ensure that a home seeker finds a ‘dream home’ becoming reality, with a home loan.
We saw some good moves, like the policy reform under PMAY, which hiked the earlier MIG-1 carpet area of 90 sqm to 120 sqm and the earlier MIG -2 carpet area of 110 sqm to 150 sqm. So, in these few aspects, 2017 was positive.
Would one define 2017 as a year favourable for realty buyers, or a year for realty developers? I would not make this an “either-or” scenario. This was truly a year that was favourable – as also challenging – for both, buyers and developers At the end of 2017, real estate is moving back towards normalcy, albeit under the new regulatory regime.
Did the events of 2017 bring sustainability to Indian real estate? If one looks at the construction scenario, a combination of global best practices and local working methods would seem to be the apt way of achieving this goal – and Indian real estate largely has taken this route through 2017.
Over the years, the industry has been communicating with various governments about shift required in policies so as to give a positive boost to real estate – and we have seen this happen in the ‘affordable housing’ segment. We need such positive shift in policy across all segments of real estate.
Some of the required changes have been implemented, some are under ‘serious consideration’ and some are yet to be taken up. So, quicker permissions and clearances, translating ‘ease of doing business’ into the actual process of planning – executing – completing projects, making low-cost institutional credit available to the industry are part of the wish list.
“Looking into 2018 and the future, rationalisation of tax as a result of the move to cover real estate fully under GST, and providing a boost for rental housing are the two key drivers to look forward to.”
In a nutshell, 2017 for the Indian real estate sector has definitely been good – in the long run.
Through 2017 and into the future, consumer confidence will grow as a result of RERA, and developers will work in a more transparent manner and be accountable for their projects.
This article is contributed by Mr. Niranjan Hiranandani, President, National Real Estate Development Council (NAREDCO)
The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor.
