PROP­ERTY

DNA (Delhi) - - PROPERTY - Ab­hishek A Ras­togi, Parveen Jain, Dr. Ni­ran­jan Hi­ranan­dani,

Year 2018 wit­nessed a lot of home seek­ers de­lay­ing their pur­chase de­ci­sion for var­i­ous rea­sons. From ru­mours of res­i­den­tial real es­tate prices com­ing down, to the re­al­ity that price ap­pre­ci­a­tion would not be as fast and high as it used to, con­cerns over RERA and con­fu­sion over GST, a host of fac­tors had buy­ers be­ing anx­ious fence-sit­ters all through. With 2019 hav­ing com­menced, the ques­tion ob­vi­ously is what lies ahead? What are the op­por­tu­ni­ties avail­able within In­dia and mar­kets across the globe?

Pro­vid­ing a 2017-18 com­par­i­son and 2019 per­spec­tive, Ramesh Nair, CEO and Coun­try Head, JLL In­dia, opined that with the sup­ply side likely to re­main strong in 2019 and prices re­main­ing stable across the coun­try, the mar­ket will be favourable for home buy­ers in times to come. While there has been a spurt in res­i­den­tial launches in 2018, a pos­si­ble ra­tio­nal­i­sa­tion in GST rates for un­der-con­struc­tion prop­er­ties is on the anvil. These pos­i­tive devel­op­ments along with im­ple­men­ta­tion of RERA, is good news for home buy­ers. Devel­op­ments in Delhi-NCR, Bengaluru and Mum­bai re­flect the pop­u­lar sen­ti­ment in the mar­ket. A re­cov­ery in the hous­ing seg­ment in these cities will bring back buyer's faith in the res­i­den­tial mar­ket, he un­der­lined.

As per JLLI re­search, after a pro­longed lull of nearly three years, res­i­den­tial mar­kets in Mum­bai and Delhi NCR showed def­i­nite signs of re­cov­ery in 2018. The pos­i­tive im­pact of the reg­u­la­tory re­forms in­clud­ing the im­ple­men­ta­tion of RERA and GST is now ev­i­dent.

New launches (units) in Mum­bai (in­clud­ing Mum­bai city, Mum­bai suburbs, Thane city and Navi Mum­bai) in­creased from 32,842 to 39,970 in 2018, up 22% while Delhi NCR (in­clud­ing Delhi, Farid­abad, Ghazi­abad, Noida-Greater Noida and Gu­ru­gram) wit­nessed a rise from 8,247 to 17,660, up 114%. Sales (units) in Mum­bai were up 10% from 24,383 to 26,858 while Delhi NCR saw 71% growth from 14,440 to 24,725 dur­ing the same pe­riod ac­cord­ing to JLL REIS.

The rise in launches has, how­ever, added to the num­ber of years that is needed to sell (YTS) the ex­ist­ing un­sold in­ven­tory in the cities. As a re­sult of the higher quan­tum of un­sold in­ven­tory and slug­gish de­mand of past few years, hous­ing prices have re­mained steady. The sta­bil­ity in the rates is likely to push the sales mo­men­tum in 2019.

Mona Jalota, Founder & MD, Kryp­ton Global In­vest­ments, said that year 2018 was a water­shed year for the do­mes­tic real es­tate in­dus­try which saw many im­pact­ful ini­tia­tives of 2017 tak­ing a firm shape. Even though the de­mon­eti­sa­tion and RERA put brakes on the growth of the over­all res­i­den­tial sec­tor, in­cen­tive poli­cies by the gov­ern­ment and ef­fec­tive im­ple­men­ta­tion of RERA im­pacted the af­ford­able hous­ing sec­tor pos­i­tively.

“With the slug­gish realty mar­ket in re­cent times, the var­i­ous changes im­ple­mented by the gov­ern­ment, and high over­all pric­ing in the ma­jor met­ros, which of­fer lit­tle or no growth po­ten­tial, poor in­fra­struc­ture and poorer rental re­turns, and in­vestors re­al­is­ing that re­turns from the do­mes­tic sec­tor would per­haps take as long as 15 years, in­ter­na­tional mar­kets gained flavour with the HNI in­vestors. Many for­eign real es­tate mar­kets work and op­er­ate in a much more trans­par­ent man­ner. There are no de­lays or an­other red tape due to bu­reau­cratic pro­cesses or pa­per­work thereby in­creas­ingly grab­bing the at­ten­tion of In­dian in­vestors,” she pointed out.

Ac­cord­ing to her, while all these rea­sons are mak­ing peo­ple look be­yond the In­dian real es­tate mar­ket, some coun­tries of­fer res­i­dency and cit­i­zen­ship ben­e­fits if any­body owns a prop­erty in that coun­try. So, if some­one plans to mi­grate at some point in the fu­ture to that coun­try, in­vest­ing in real es­tate can be a good way to at­tain an easy ac­cess to res­i­dency.

Un­like In­dian real es­tate mar­kets, where there is a higher cap­i­tal ap­pre­ci­a­tion year on year, for­eign mar­kets demon­strate bet­ter rental ap­pre­ci­a­tion. So, hop­ing to make a pur­chase and ex­pect­ing the prices to es­ca­late overnight within a year or two is highly an un­likely sce­nario. Most over­seas mar­kets are ma­ture and hence would en­joy a stable cap­i­tal ap­pre­ci­a­tion. Hav­ing said that, if one has the vi­sion to be a longterm player, one can not only en­joy the ben­e­fits of a steady rental in­come but also look for­ward to a rea­son­able and some­times ex­cel­lent cap­i­tal ap­pre­ci­a­tion in the five-year hori­zon, Mona opined. So while all eyes are now on the next meet­ing of the GST Coun­cil, it seems that 2019 should be a bet­ter year for self-use home seek­ers to take the plunge and get their own res­i­dence.

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