Real estate sector expected to perform better than ever
Introduction of GST and RERA is likely to restore the buyers’ confidence in the market.
Off late, the Indian realty sector has started to move towards becoming more and more organised as we see it getting stronger towards the front of reforms. With the inception of Real Estate Regulatory Authority (RERA) in the sector and majority of states making it operational, the sentiments of in-
vestors and buyers have started to pick up pace.
With the input tax credit to be passed on by the developers to the customers, the post-GST real estate sector is expected to bring about a fresh series of demand in the next few months. The government’s plan for Affordable Housing, Smart Cities, AMRUT, Housing for All and other infrastructural advancements drifts our focus towards better regulated realty sector.
In nutshell, the realty sector in India is looking at a much needed revolution which was long awaited, and in near future, we will witness a major revamp that is projected to benefit the economy in the long run.
India’s northern part of real estate is majorly contributed by the National Capital Region (NCR) which accounts to one of the biggest realty markets in the country. Districts from Uttar Pradesh, Haryana and Rajasthan, along with the NCT of Delhi constitute towards the NCR region.
NCR being a prime contributor for Indian realty, there is a huge chunk of professional developers and builders in the region working towards developing residential and commercial projects. All the NCR states have made RERA applicable with only Haryana left to make the website operational.
With GST and RERA now in place, activity on the buyer and investor front has amplified. Positive sentiments are floating as customers are looking towards real estate as an investment avenue with market now looking more transparent with the promise of delivery.
As sentiments gain momentum, developers are gearing up to launch more projects and deliver the ones in pipeline. This thrust is driving the developers towards quick completion of projects and launch new ones.
“RERA and GST are aimed at simplifying the real estate buying, taxing and redressal processes which will directly benefit its stakeholders. These reforms will act as long term catalysts as we see the developers raising funds to launch new projects and finish those in final stages,” explains Kushagr Ansal, director, Ansal Housing.
Recently, real estate company Sikka Group had raised Rs 230 crore from a leading Indian bank for three of its housing projects, namely Sikka Karnam and Sikka Kaamna in Sector 143 on Noida Expressway, and Sikka Kimaantra in Sector 79 in Noida. The amount raised is to be utilised towards speeding up the construction of these projects.
In a similar manner, realty firm Gulshan Homz has initiated the investment of Rs 400 crore to develop two of its projects, Gulshan Bellina in Greater Noida West and Gulshan Botnia in Sector – 144 along the Noida Expressway.
The company had recently launched
Gulshan Botnia and had earlier launched Gulshan Bellina which will offer a total of 1892 units. Another Noida realty major, RG group had raised Rs 170 crore from a private equity firm for its housing project in Noida, ‘RG Residency’ and clear its dues to the development authority.
Very soon, NCR based developer Paramount Group is expected to raise funds towards speeding up the completion of one of its ongoing residential projects which is already running ahead of its schedule.
“Project launches had dipped last year, and due to the implementation of RERA and GST, is quickly gaining pace again. As these reforms settle in, market will respond soon and will observe better stakeholder interest,” avers Vikas Bhasin, MD of Saya Group.
Newly launched projects
In a recent example of fund raising for project launches, leading financial investor KKR had committed to invest Rs 200 crore in NCR based affordable housing player Signature Global.
The company had also launched two affordable housing projects in Gurugram primarily, ‘The Millenia’ in Sector – 37D and ‘Solera 2’ in Sector 107. The projects would also be coming up under the Haryana Affordable Housing Policy like their previous projects.
In Noida, realty firm Gaursons Group, which has been into develop-
ment of residential and commercial projects in Delhi/NCR, has planned to invest Rs 150 crore to develop two luxurious towers called 'Gaurs Platinum Towers' as the company expects better demand for luxurious dwellings with the decrease in supply in the segment.
The company’s recently launched twin towers will have a total number of 52 residences with 26 units in each tower with state of the art facilities and amenities.
With the market gaining momentum and buyers getting in the mode of investment, real estate sector in India is projected to perform better than ever with a regulator sitting in each state to monitor all the activities. With the festive season of this year just around the corner, buyers are also gearing up to invest in the era of Indian real estate.
Reserve Bank of India’s recent decision to cut repo rate by 25 basis points after a gap of almost nine months, is an attractive proposition. The development is likely to put the residential real estate market back on the growth trajectory and give a boost to affordable housing.
Icing on the cake
Experts anticipate the home loan interest rate to hover around 8 per cent once the banks decide to pass on the benefit to consumers.
Samantak Das, chief economist and national director, Research, Knight Frank India, said, “With real estate prices remaining stagnant, interest rate showing a declining trend, tamed inflation, RERA in place, the confidence of home buyers will be back in the market. This is an opportune time as the festival season is just around the corner. The move to cut rates is bound to increase sales traction. There may not be a full-fledged revival of the real estate market but it certainly heralds an initiation of a growth trajectory in the residential space.”