siliconindia | | December 20199become environmentally conscious, which is also a desired characteristic consumers look for, in properties they invest in. Additionally gated communities offer security, property maintenance and eco-friendliness as they are surrounded by lush and green environs.Despite the slowdown in the Indian Economy, the real estate sector managed to stay afloat and the key drivers for this revived interest can be attributed to regulatory reforms such as RERA, GST, relaxation in FDI which encouraged more investment, steady demand generated through urbanization, and the emergence of affordable housing.The Government's support has motivated builders to become increasingly inclined towards building affordable projects. These projects were given a major impetus in the Union Budget 2017 and were granted infrastructure status. The `Housing for All' initiative aims to build 20 million affordable housing units across India by 2022. Since, the affordable housing sector is the most incentivized segment for both builders and buyers, many reputed builders are now launching projects in the affordable segment. The availability of affordable housing will further bolster the market and widen the pool of potential buyers.Amongst the policies, RERA has the potential to be the most significant policy intervention in the real estate sector. Its implementation has introduced much-needed formality to the sector and boosted homebuyer confidence. Under RERA, builders will have to provide a timeline for construction and delivery which has to be verified by a valid authority. Without approvals, builders are not allowed to promote or sell any project. This has effectively weeded out unscrupulous players from the market and allowed only credible builders to flourish - to the advantage of all homebuyers.The reduction in GST on under-construction properties and affordable housing will have positive implications for the sector. The lower tax regime reduces the pricing disparity between under-construction and completed properties. A reduced price will dispel hesitation associated with under-construction properties. This will incentivize sales of under-construction properties and spur demand for new projects. Lowering the GST for affordable housing projects would provide people of low-income groups with homes and bring property ownership within reach of a wider audience.The real estate sector requires supportive measures that will improve upon the recently gained momentum. The granting of infrastructure status to the entire real estate sector is at the forefront of these requirements. We have seen the impact of infrastructure status on affordable housing with many reputed builders now launching projects in the affordable segment. The sector also looks forward to a streamlined approval process with `Single Window Clearance'. This will ensure project approvals to be processed more quickly, resulting in reduced construction costs, thereby substantially reducing property costs.Furthermore, the sector can benefit from revised income tax slabs that reduce overall tax expenditure. This will augment the ability of the salaried class to invest in real estate. Expanding the availability of income tax deductions for homebuyers can incentivize new buyers and widen the market opportunity.The real estate sector is a significant contributor to India's growth and is its second largest employing sector. According to a joint report by CREDAI and JLL, the sector is expected to have revenues worth $180 billion within a year. With the revival of consumer demand, the housing sector is expected to contribute 11 percent of the GDP by 2020 and will continue to have a far-reaching impact on India's overall economic performance. Under RERA, builders will have to provide a timeline for construction and delivery which has to be verified by a valid authority
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