Hyderabad: Real estate sector has now high hopes from the new Government that has come to power with thumping victory. The sector expects the Government to uniformly implement RERA regulations across the States to improve buyers’ confidence. It should also create a single window clearance mechanism at the national level for easy approvals. Developers want the government to work to release the public land holding for the creation of additional affordable and mid-income housing. The need of the hour is also to significantly lower interest rates, thereby, improving affordability, liquidity and boosting housing demand.
The impact of reforms has been reflected in the number of investments received by the real estate sector. Of the total institutional investments of $30 billion during 2009-2018, $20 billion as invested in 2014-2018. During the same period, the share of foreign investments more than doubled to 70 per cent in 2018 from 31 per cent in 2009. The institutional investments in 2019 will nearly double to $10 billion as compared to 2018.
Ramesh Nair, CEO & Country Head, JLL India, said, government measures would directly impact the real estate market. Segments including residential, office and retail have emerged stronger as a result of the developments so far.
The buzz around affordable housing has gained much momentum and has received utmost focus with the aim of ‘Housing for all’ by 2022. The Pradhan Mantra Awas Yojana (Urban) allocated Rs 4.6 lakh crore during the last five years resulting in the construction of 1.8 mn homes.
Sales are likely to receive a further push with progressive policies of the government. During the first quarter this year, the government further lowered GST rates on affordable homes to 1 per cent from the earlier 8 per cent, without input tax credit (ITC). The GST on projects under construction, which are not under the affordable housing segment, was reduced to 5 per cent from 12 per cent.
Time to deliver
Anuj Puri, chairman, Anarock Property Consultants, said, the Modi-led government will have a challenging new term when it comes to the real estate industry. The first 2014-2019 regime was the testing ground for most of its initiatives, but their on-ground implementation remained far from spectacular.
As five years are too short a time to undo decades of damage, the industry stakeholders have given this government the benefit of doubt. However, with a fresh term in hand, this government will have to deliver on a lot of these initiatives in ‘real’ time. It also inherits major issues that the real estate industry is still grappling with and require immediate attention – a surfeit of stalled or delayed housing projects, a massive pile-up of unsold stock across cities (paradoxically juxtaposed against a huge housing deficit), property prices that remain unaffordable for the largest part of the Indian population, and the ongoing liquidity crisis of developers, Puri added.
Shishir Baijal, CMD, Knight Frank India, said, “A majority government is a strong point for economic growth as it instills confidence of continuance and unhindered policy decisions. With the second term, we expect the government to continue with its growth policies including the infrastructure development. We are sure the government’s focus on the Housing for All policy will be paramount. We congratulate the new government for its victory.”