Real Estate Market 2017 - by Mr. Parth Mehta
 
Real Estate Market 2017 - by Mr. Parth Mehta-9amstories

What will be the state of the real estate market in 2017

Knowing the prevailing political developments, an attempt for the eradication of black money by our Government and implementation of the real estate regulatory body (RERA) to ensure real estate business is performed in a regulatory framework. Definitely, 2017 looks as a revolutionary year for an Indian real estate market, especially the metro cities. According to us, because of the transparency and regulation, it will receive an influence of funds from FDI (Foreign Direct Investment), REIT’s (Real Estate Investment Trust) and Pension Funds.

Also, individual investors, banks and buyers will regain trust in real estate sector because of the accountability RERA imposes on the developer. In a region like Mumbai, affordable housing at strategic locations shall always witness high volume momentum of sales. Areas like Kandivali, Borivali, Dahisar where budgeted ticket sizes are between 60 lakhs to 1.5 crs which will surely witness a good traction.

We perceive because of the demonetization, banks will have surplus money and there will be an increase in tax revenues which will eventually lead to the reduction in interest rates for home loans which will further benefit real estate sector. Tax rebates proposal by the Government will ensure affordable housing in metro cities as well.

We see an upsurge in demand for nearing completion commercial properties as business requirements grow, budgeted offices at important locations like Andheri and Bandra will do very well. The Government of India along with the Governments of the respective states took a major initiative in encouraging the real estate development. The Pradhan Mantri Awas Yojana (PMAY) as affordable housing for all will see massive growth in real estate sector.

 

 

Ticket sizes over and above 6 crs. which form a high volume transaction shall see a significant slowdown due to an oversupply of luxury projects in Mumbai and also due to affordability in liquidity period for all business community purchases.

FDI: They feared entry into the system because of the issue of black money and lack of transparency and there was no official regulator so lot of developers used to collect money from buyers and use it for acquisition of other projects so thus the developers used to face cash crunch for the development of the project and used to get stuck at some or the other level. Also, the regulatory approvals used to take a lot of time and thus increasing the risk of the project getting stuck.

Earlier investors used to shy away from real estate investments because of the project delays and insufficiency of legal framework for investments changes in the laws and lack of central body regulating the real estate and inconsistency in state laws and central laws.

RERA is bringing an end to woes of investors as all the real estate transaction will come under one central law and state level regulators will ensure the enforcement of central Government law.

Because of RERA, all the money collected from the buyers will be deposited in ESCROW account and which can only be used towards construction and land payments. Also, in the case of delays of delivery of the projects the developer will have to pay interest at the rate of 10.9% for the delayed period.

In 2017, you will see a huge profit for startups and employment which will eventually see an increase in demand of corporate and residential real estate projects. Affordable housing supply and demand is expected to see a bag full of offers by the Government for both developers and buyers as well. Demand for good quality development will increase were buyers were facing trust deficit on home buying schemes available in the market.

India’s strong economy is one of the biggest factors behind the real estate sector and is most globally recognized sectors. This will also ensure in more NRI investments. The Banking sector is flushed with funds which will decrease rate of interests and will boost the growth and of course, GDP of Indian economy. The payment system will be seen and implemented in a much improved manner which will increase e-payment and will reduce cash dealings resulting into a transparency and efficiency.

Keeping, the long story short 2016 may have seen turbulences and the number crashed almost one-third of the projected sold units in real estate market, but 2017 looks promising and is expected to boost the Indian real estate industry.

By: MR. PARTH MEHTA, MANAGING DIRECTOR – PARADIGM REALTY
 
 

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