Looking at this bumper growth and demand for housing, there are certain trends in real estate under housing sector market which are sure for the year 2017:
- Revamp business model : Every developer has to abide by the version of Real Estate Regulation & development Act (RERA), which is supposed to bring transparency and accountability into the system, thereby increasing the consumer confidence in real estate. The Goods and Service Tax (GST) and Benami Property Act are also going to majorly impact on how many developers remain and more so after demonetisation and how are they going to run their business and hence to stay in market they need to change their old styles of working. And, looking at these scenarios though the year is good but sales are expected to be best near the end of 2017.
- Global Capital Inflow : India is ranked as the fourth in FDI among developing Asian nations as per the World Investment Report 2016 by the United Nations Conference for Trade and Development. $32 billion in private equity has been attracted to Indian Real Estate and global inflow in 2016 stood at $5.7 billion. Tier-I cities of India was ranked 36th in JLL’s 2016 bi-annual Global Real Estate Transparency Index. The main reason or catalysts behind this was the structural reforms and more liberal foreign direct investment (FDI) regime. Due to these regulatory framework, Indian real estate is not just attractive to global but even the Indian investors.
- Affordable Housing : Finally India is all set to get the much-coveted infrastructure status for affordable housing. One crore houses are to be built in rural India by 2019, and this is all set to face the cheaper sources of finance – including external commercial borrowings (ECBs) along with a further boost by re-financing of housing loans by National Housing Banks (NHBs). The union budget 2017 also got improvement for the housing sector is also the cause for this affordable housing. A new Credit Link Subsidy Scheme (CLSS) for mid-income group with a provision of Rs 1,000 crore in 2017-18 was announced even before budget. Extension of the tenure loans under this CLSS of Pradhan Mantri Awas Yojana (PMAY) increased it to 20 years from 15 years along with allocation of 23,000 crore from 15,000 crore in rural areas.
These housing trends, along with demonetisation of high-value currency notes which shows that the prices of the land are going to ease in the coming few years especially in far-flung areas around Indian metros and the Tier-II and Tier-III cities. The government’s dream of Housing for All by 2022 definitely is an attainable one due to these trends.