With the arrival of 2017, you must be struggling with many unsolved questions & thoughts about purchasing, selling & investing in real estate. This year is going to be a rich year when it comes to Real Estate & Economy of India.
Numerous unexpected twists in the previous year like demonetization, Real Estate Regulation Act, Goods & Services Tax, Benami transactions, FDI relaxation is likely to presage some remarkable transformations in 2017.
All the strategy alterations and announcements from the Central Government targeted at realty in 2016 will begin screening their results in 2017. These changes & Act’s affected the real estate in 2016 but it has not been determined whether these alterations have been Positive or Negative for the Real Estate India. In this year, with the implementation of these reforms, a clear picture will be open and the pros and cons of these policy changes will be experienced.
Here is a short list of encouraging impacts of Indian Real Estate:
- Home loans rate alteration, thus boosting housing demand
- Startup culture will boost the demand for commercial properties.
- RERA ACT will bring transparency and more confidence in real estate.
- End users are going to have the best time in this year.
- More trustworthy, reputed and organized developers will play in the field
Let’s observe in depth what we have coming up for Indian Real estate.
Commercial Properties:
With on the rise IT industry, particularly in Delhi NCR & South, the demand for commercial spaces is on an increase. 2017 experiences a gap between demand & supply in the micro markets of Hyderabad, Pune, and Bengaluru. Because of the investment from MNC’s, the demand for commercial property will increase and that's why the rents will rise because of the gap. The rising demand for infrastructure and IT hubs is an indication of the commercial segment expansion. This is how demand in small segments of commercial real estate is forecasted:
- Industrial: Online trade, warehousing, and shipping have improved extremely. The rising manufacturing industry has also formed the demand for commercial property. As well as, Delhi-Mumbai Industrial Corridor (DMIC) has shown a major boost in the realty sector.
- Retail: In the previous year many retail brands have entered and these brands will be expanding their foot overall the country definitely in 2017 which will finally produce demand for retail developments.
- Office Spaces: Again with the trend of Startup culture in our country office space requirements are by now is in good demand and it is estimated that almost 40 – 45 % of the office space consumption in 2017 will be done by new the startups.
Residential Properties
Primary Market
Sale of fresh units in 2017 across cities will increase, as values of the units are already at the bottom and recently many banks have cut home loan interest rate. As well as RERA will come into effect from the 1 May 2017, now real estate builders are in the hurry to finish their delayed developments to avoid fine & penalties. So the residential properties segment will be observing a huge number of project deliveries in this year. On the other hand, now many real estate developers starting their new residential projects at very attractive price, for example “Destination 150 Noida” a residential development from Tata Value Homes at Sector 150 Noida, will offer 2 & 3 BHK Apartments with basic home automation system. This will also improve buyer confidence in investing ongoing residential developments.
Resale Market
Demonetization has led to a temporary shortage of the cash which in turn decreases the demand only for short term. But, alteration in home loan interest rate will give some relaxation and increase the demand for resale properties. But the shortage of the cash will smash the lower interest rates that will keep the overall demand very much low in comparison of supply, bringing down the value of resale properties. This movement is expected to persist till liquidity comes again in the market and government fill the gap of circle rate and market price.
Government Initiatives to boost housing sector
Boosting residential sector is one of the major agenda of this Government. Recently our honorable Prime Minister Shri Narendra Modi announced following plans which will boost up the Realty Sector in 2017.
- Home loans at affordable interest rates: PM Awas Yojana recipients to get 4% exemption on Home loans up to Rs. 9 Lacs and 3% for loans up to Rs. 12 Lacs.
- Home loans up to Rs. 2 Lacs have taken in 2017 for new housing or extension of housing in rural areas will get interested subvention of 3%.
- A number of homes to be constructed under Pradhan Mantri Awas Yojana – Gramin has been increased by 33% i.e. from 3 Crore to 4 Crore.
On the whole, this year will be transporting many positive things for the industry which will make realty Industry more transparent, responsible and trustworthy. In few words, 2017 will be the year of major transformation for the real estate of India.
