Real Estate Sector Looking Forward to See Better Future: Critical Reforms

The real estate market has seen a lot of slowdown for several years as RERA, Demonetization and GST had tri-fold strike on new launches and sales this year. But developers are still hoping for better future in 2018 in the form of affordable housing. A lot of real estate consultants and developers are expecting to see improvements in housing sales as property prices have been stable after correction over the past couple of years as well as lower rates of interest on home loans.

In 2018, new supply of real estate projects might be limited and there will be restrained unsold properties due to increase in sales and housing demand, i.e. up to 5 to 6 Lakh properties these days. The sector is going to see a huge consolidation as the assets of many developers would be available to reduce debt and to finish projects that are ongoing. There was decline in launches and sales of real estate projects in 2017, especially due to triple impact due to RERA (a new real estate law implemented on May onwards), note ban in November 2016, as well as GST bill in July. The sales and launches of residential projects declined by 30% to 50% from January to September last year in seven big cities when compared to 2016, as reported by the Anarock Property Consultants.

The private equity real estate investment crossed over Rs. 35,190 Cr. despite low sales from January to September 2017 and is all set to cross the total investment of Rs. 36,590 Cr. of last year, according to the data shared by Cushman & Wakefield. Especially in Delhi/NCR, the pain of home buyers forced where Amrapali Group and Jaypee Infratech went bankrupt. Unitech was alleged for the delays in project delivery and even promoters of the projects were jailed. In Delhi-NCR, thousands of people bought the projects which are now in dispute and courts couldn’t provide any relief to these buyers. However, RERA or Real Estate (Regulation & Development) Act has shown some hope by promising to remove all the fly-by- night real estate operators from the market.