The real estate sector in India has seen steady growth over last few years and the commercial sector, in particular, has been on the rise. Historically speaking, real estate has been one of the safe choices for investors as this gave them a sense of security.
There was a time not in the too distant past when investors started moving more towards the stock/capital market because real estate as an industry had become difficult and less stable. Buyers suffered non-deliveries and delayed deliveries, and this lack of trust in real estate proved to be fatal for the industry.
Investment in real estate was turning out to be insecure due to increased risk from the developers’ side and higher returns in the capital market. However, the major positive policies announced by the Indian government in the recent 1-2 years, like the Real Estate Regulatory Authority (RERA) Act have created confidence in the minds of consumers, thus contributing to the expansion of this segment, and making the industry more organised.
The announcement of a reduction in GST to 8% for all houses qualifying under PMAY has itself been a massive step by the government to achieve the goal of making housing for all a reality by 2022.
India is a major business giant, and the government is focusing a lot more on employment generation. All these incentives provided by the government should promote investments in the real estate segment, I feel.
In the recently announced Union Budget, the Finance Minister announced the reintroduction of the long-term capital gains (LTCG) tax. This would see many investors paying tax on the gains made by selling equity after holding it for a year. This spooked Indian markets with the Sensex and Nifty dipping down to over 800 points the day right after the announcement.
The LTCG tax should bring in a marginal revenue of Rs 20,000 Crore in the fiscal year 2018-19, and this would be beneficial for the government in the long run. But this will worry the mid-income segment of customers as this leads to a revision in the value of their investments.
While investing in real estate gives you psychological satisfaction as both your regular and return income is safe, investing in the stock market can be risky as the chances of both profit and loss are equal. In real estate, your long-term income of the asset as well as your regular income is safe, which is an advantage you do not get with stock market investment.
When you invest in the stock market, regular monitoring of the capital is required whereas real estate eliminates that extra stress. At the same time, real estate in India has been quite safe and steady due to various reasons such as improvements in structural reforms, more liberalised foreign direct investment, fixed rental income, huge demand, increased transparency etc.
And this has made real estate a buyer’s market. Developers all around are providing all kinds of attractive deals, encouraging bookings for their property, thus making this the right time to invest in real estate.
The situation right now is apt to indulge in property buying and real estate should see more such opportunities in the future to provide maximum benefits to customers and grow as an independent industry.
This article is contributed by Sachin Bhandari, CEO, VTP Realty
The views expressed here are solely those of the author and do not necessarily represent or reflect the views of RoofandFloor.
