What do 71 years of in­de­pen­dence mean for In­dia’s re­alty in­dus­try?

Hindustan Times (Chandigarh) - Estates - - ESTATES - Anuj Puri let­ters@hin­dus­tan­times.com

In the 71 years since In­dia gained in­de­pen­dence, the coun­try’ s real es­tate mar­ket has changed tremen­dously. While it has not al­ways been con­sumer-favour­ing through­out this pe­riod, it is cer­tainly so to­day. The coun­try’s cities have ex­panded, new eco­nomic driv­ers have come in and jobs are be­ing cre­ated at all lev­els.

Like­wise, ap­pro­pri­ate hous­ing is now be­ing cre­ated for all in­come lev­els. The cur­rent Gov­ern­ment has taken the needs of the peo­ple to heart and de­ployed var­i­ous pol­icy ini­tia­tives to en­sure that home­own­er­ship be­comes af­ford­able and de­sir­able.

Like the real es­tate mar­ket it­self, the mar­ket for hous­ing loans has be­come very com­pet­i­tive, giv­ing con­sumers the edge of choice. More­over, prop­erty prices have also ra­tio­nal­ized across the coun­try af­ter the Gov­ern­ment’ s de­mon­e­ti­za­tion move late last year.

While it was ini­tially ex­pected that only the re­sale homes and land mar­kets would be af­fected, it quickly be­came ev­i­dent that the low­ered sen­ti­ment had per­co­lated in pri­mary sales as well.

Many of the most im­por­tant changes to pos­i­tively im­pact home buy­ers in In­dia so far have been at the pol­icy level, while oth­ers have been in­duced by ad­vance sin tech­nol­ogy:

The In­ter­net has opened up the abil­ity for ev­ery­one to do their own ba­sic re­search and short­list lo­ca­tions, projects and prop­er­ties that suit their needs

Hous­ing loan in­ter­est rates are hard­en­ing, but if we con­sider that they were as high as 16% per an­num in the ‘90s, they are still quite at­trac­tive

Buy­ers’ bar­gain­ing power is at an all­time high to­day

RERA is clear­ing fly-by-night op­er­a­tors from the mar­ket, leav­ing only cred­i­ble and re­li­able play­ers who are bound by law to ad­here to their as­sur­ance son the mar­ket

The econ­omy’s open­ing up with a plethora of new em­ploy­ment op­por­tu­ni­ties has among


other things, also led to the emer­gence of dual-in­come nu­clear fam­i­lies with vastly en­hanced home buy­ing abil­i­ties

Buyer sen­ti­ment to­day

For along time, In­dia’s in­de­pen­dence did not have too many favourable con­no­ta­tions for as­pir­ing home buy­ers. Their dis­ad­van­ta­geous po­si­tion had a lot to do with the fact that the real es­tate mar­ket was largely held hostage by de­vel­op­ers. To­day, this sce­nario has changed sig­nif­i­cantly. Over the past two years, we have seen the de­ci­sive re­turn of con­sumer power on the mar­ket, with the ar­rival of the Real Es­tate Reg­u­la­tory Act (RERA) pro­vid­ing the fi­nal edge.

While RERA is still ex­pe­ri­enc­ing teething trou­bles, it is for cer­tain that it is here to stay - fi­nally putting buy­ers firmly in the driver seat. The Act is by far the most con­vinc­ing man­i­fes­ta­tion of in­de­pen­dence for home buy­ers in mod­ern-day In­dia, promis­ing to even­tu­ally bring the res­i­den­tial prop­erty mar­ket on par with in­ter­na­tional stan­dards of trans­parency and ac­count­abil­ity to con­sumers.

A game­changer called GST

GST is a ma­jor step to­wards fi­nan­cial trans­parency, which can be read as free­dom in the con­text of real es­tate if we con­sider the pre­vi­ous com­plex and of­ten opaque lay­ers of tax­a­tion which ap­plied to real es­tate pur­chase as bondage.

Most of the pre­vi­ous taxes have been con­sol­i­dated un­der this one tax, and, hav­ing greater clar­ity about how much the fi­nal price of buy­ing a home frees the mind from un­cer­tainty. GST is a clear man­i­fes­ta­tion of a rapidly evolv­ing na­tion which in­tends to make it­self more at­trac­tive to con­sumers as well as for­eign in­vestors. Its im­ple­men­ta­tion was not with­out a strug­gle, but it was a clear need in a coun­try which wants to por­tray it­self as pro­gres­sive, open and ac­count­able. In that sense, it is cer­tainly a sym­bol of lib­er­a­tion.

As a clear work in progress, GS Tis still in the throes of its own ‘free­dom strug­gle’ as it as­pires to live up to the ‘one na­tion, one tax’ prom­ise.

One of the ma­jor hall­marks of a fully de­vel­oped na­tion is a trans­par­ent fair and pro­gres­sive fi­nan­cial sys­tem. As a de­vel­op­ing rather than a fully-de­vel­oped coun­try, In­dia must as­pire to­wards global bench­marks of pro­gres­sive­ness, and GST is in­du­bitably a ma­jor move to­wards this as­pi­ra­tion.

Tech­nol­ogy­en­abled con­sumer power

The In­ter­net has done a lot more than just open up the In­dian real es­tate mar­ket’s topography. It has also brought with it a greatly re­booted job mar­ket - not only in terms of IT/ITeS jobs but al­most all in­dus­tries as a whole. To­day, In­dia is lead­ing from the front in terms of In­fotech-en­abled busi­nesses, with e-com­merce and a thriv­ing start-up cul­ture driv­ing eco­nomic growth.

Hous­ing for All by 2022?

In 1928, the US pres­i­den­tial cam­paign by the Repub­li­can Party promised Amer­i­cans ‘a chicken in ev­ery pot and a car in ev­ery garage’ if its can­di­date Her­bert Hoover won. Prob­a­bly noth­ing else could have cap­tured the spirit and spe­cific needs and as­pi­ra­tions of those times than this prom­ise.

It was made a time just be­fore the Great De­pres­sion be­gan to spread its dark wings over Amer­ica in 1929, and was al­ready send­ing out signs of its com­ing


Like the real es­tate mar­ket it­self, the mar­ket for hous­ing loans has be­come very com­pet­i­tive, giv­ing con­sumers the edge of choice.

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