Real Estate: Are we Progressing Towards a Meaningful Change?
From last decade, realty sector was going through a roller coaster ride – sometimes up, sometimes down. 2015 witnessed a slowdown in the realty stock prices. Piles of unsold inventories accumulated in all the major regions of the country, thereby creating a headache for the builders. People started out losing out their confidence and started exploring other avenues for investment.
But Every Cloud Has A Silver Lining
We know every industry has its own business cycle. Now, it seems market cycles will play again. The first quarter of this year witnessed some constructive regulatory changes – enforcement of Real Estate Bill, Union Budget, extra incentive towards realty sector and now good monsoon. It seems “Acche Din aa Rahe Hain” and there will be change in the way how realty sector is working from decades. To support government mission of “Affordable Housing For All by 2022”, housing finance companies are providing home loans in a convenient way.
The government has launched “Affordable Housing for all by 2022” under which 2 crore new houses would be constructed in coming 6 years. Again, Indian towns will become smart soon. There will be 98 “Smart Cities” across the nook and corner of India soon. People will live a better life with adequate supply of water, electricity; there will be digitization & IT connectivity, sustainable environment, intelligent transport systems and sanitation. All these factors will enhance the quality of life and as a result housing demands would shoot up in an unprecedented way.
Real Estate & National Economy
Real estate contributes about 1/10 th of the nation’s economy. So real estate development is highly significant in the nation’s overall development. In this context, it is indispensable to weed out the black money from the real estate market.
As per a report published by Global Financial Integrity (GFI) in December 2015, India stands 4th in the black money outflow in world and accounts for $51 billion per Annum. Going an extra mile, Swiss Banking Association claims India’s black money market is larger than the rest of the world combined. Though there is no “reliable” estimate – but it is clear that there is massive inflow and outflow of black money in the Indian market. And real estate market is no exception.
The mandatory property registration and transparency in builders’ projects are likely to reduce the inflow of black money in the realty sector.
Seventh Pay Commission
The government has announced seventh pay commission. There will be salary hike of 4 crore (Center, States & PSUs) employees & pensioners. It is likely with constructive reforms and increased salary & arrears, there will be more inclination towards real estate investment.
Conclusion – Nation’s economy is rallying up. Important regulatory changes have taken place. These positive ambiances will usher a transformation in the realty sector – benefiting all the stakeholders – builders, home buyers and housing finance firms.