The year 2016 saw several policy reforms including RERA Billl, GST Bill and demonetization. All these, together, will work in the favour of the realty market and lead it towards greater transparency.
2016 has been a very fluctuating year, as far as real estate sector is concerned. A lot of structural reforms took place, with real estate being directly affected by those. There were not many expectations from the market at the beginning of the year, however a lot of positive changes embraced 2016. It began with the passing of the RERA Bill which was much needed for the revival of consumer’s faith in the real estate industry. The bill will also restore the confidence of financial institutions in developers as it will delineate a timeline for completing projects. The fact that only a RERA approved project can be promoted and sold by a developer in a given timeline only will make the buyer’s life easier.
Also, the GST bill, which is yet to pass, will help consumers as the tax rates, which were a major concern for the homebuyers, will be significantly reduced. We are awaiting the passage of the GST Bill so that the consumers can reap maximum benefits.
Another reform which majorly impacted the real estate sector this year is demonetization. It will flush out black money and bring in transparency in the transactions. Real estate is one industry where a large amount of cash is stashed up and fictitious land rates are created. With this move, the land rates will come down and illegitimate cash transactions will be shut down. An important objective of demonetization was to reduce the circulation and hoarding of black money. Residential properties that deliver value for money, and those that have always conducted integral and accountable financial transactions in sales, would not be affected. The move will impact a lot of real estate builders who used to accept part payment in cash. However, it will be beneficial for genuine players, especially those who accept white transactions, and also give such developers a fair level playing ground. With home buying becoming an attractive option, those having a second house may find it difficult to find a tenant or may earn lower rentals.
The initiatives taken in the year 2016 will ultimately reflect in the year 2017 and the real estate sector will get a better shape in the days to come. With major changes and the GST bill which is likely to pass in 2017, the real estate sector is going to go under turmoil and consumers will gain satisfaction with land rates coming down. The industry will take time to get used to the changes but will surely get stable with time.
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