According to industry stalwarts,the RBI’s repo rate cut by 25 basis points could not have come at a more suitable time. For this decision will lead to cheaper home loans and boost the buyers and developers sentiment. Also, in terms of the festive season, customers look more confident and it will boost the housing sales as home loan EMIs are expected to come down.
As per finance and banking experts, yesterday’s rate cut is expected to propel banks to cut down their lending rates further.This decision, along with GST and the new real estate law, would provide further impetus to the sector and help in rejuvenating housing sales.
Another encouraging factor has been a supportive politico-economic climate, which has fostered favorable conditions for growth of realty sector. New government policies have given a significant thrust to the real estate sector, especially in the residential property segment. Industry experts state that they have seen a substantial improvement in the overall realty sector.
Going by the market trends, the year 2017, had started on a good note. The residential real estate market, which had witnessed a slump in project launches in 2016, has shown a visible comeback in the first quarter.
GST and RERA, coupled with various other progressive measures initiated by the Government, have certainly made a majorimpact on the real estate sector.
Here is a look at the factors that have led to an uptick demand in the market:
- Transparency in realty sector : To protect the interest of home-buyers and to ensure timely delivery of projects, the government has implemented Real Estate Regulation and Development (RERA) Act. This act is set to improve transparency and accountability. Also, with the implementation of Goods and Services Tax (GST), the overall burden of taxes in real estate has been softened.
- Attractive subsidies on home loans : To boost demand for affordable housing, the government has introduced competitive interest subsidies on home loans - up to 3% and 4% on home loans of Rs. 9 lakhs and Rs. 12 lakhs respectively - under the Pradhan Mantri Awas Yojna. As a result of this initiative, many reputed developers are now launching projects in the affordable segment. In the first half of financial year- 2017, nearly 70% of new launches were of projects with units priced in the Rs. 50 lakh budget range.
- Stable economic environment : With GDP expected to grow at more than 6%, and inflation under control- the economic health of the country, is in much better shape than it was in last year. The economic stability of the country has attracted $1990 million in institutional investments during the first half of 2017, out of which the residential sector accounted for 54% ($1075 million) of these investments.
- Wide range of ready-to-move-in projects : Going by the current scenario, the buyers today have ample choice of ready-to-move-in options. There are currently about 70,000 ready-to-move-in unsold apartments available in tier 1 cities.
Real estate agents, predict this festive season to be more promising than its predecessors. For developers, this festive season is expected to set the ball rolling for the much-awaited recovery, in the sluggish residential real estate segment.