Demonetisation, along with the introduction of Real Estate (Regulation and Development) Act (RERA) has made the real estate sector more organised and transparent than before. The move, along with other initiatives taken up by the Government and the Reserve Bank of India is likely to show improved results in the next 6-8 months.
Owing to the extensive infrastructural development in Tricity, people from entire North India are migrating to this place. This has created a substantial demand for housing across Tricity, avers L C Mittal, Director, Motia Group, in an exclusive interaction with 99acres.com.
Three years post demonetisation, is the industry still reeling under the impact it brought along?
The real estate industry has undergone a significant transformation over the past 2-3 years because of demonetisation, implementation of Real Estate (Regulation and Development) Act (RERA), followed by Goods and Services Tax (GST) in quick succession. Naturally, when such major steps are taken, the impact is felt by for quite some time. However, if we look at the demonetisation process, the industry, on the whole, has not been impacted much. People used to criticise the real estate industry, as the proportion of cash accepted was very high. But, with these major reforms, the sector on the whole, has become more transparent and has revived the faith of buyers in the sector.
Has the industry inched towards a full-fledged recovery yet?
The recovery of any industry is related to the overall performance of the economy of the country. It is perhaps performing a little below power right now. The subdued economy has left a bit of impact on the sector, which is quite understandable. Like every other sector, the real estate sector is also impacted to a little extent, both in terms of sales as well as supply. However, if we look at the sales and supply figure for the last two years, it is somehow at par to the preceding period.
How is the current scenario of housing demand and supply in your city?
The Government, of late, has taken up several initiatives to boost the sector. These include Pradhan Mantri Awas Yojana (PMAY), linking home loans base to repo rates and other various external benchmarks approved by the Reserve Bank of India (RBI).
Also, with extensive infrastructural development happening in Tricity, people from entire North India are migrating here. This has caused a substantial housing demand across Tricity. According to recent reports, there is only 22 months unsold inventory left in the region.
Was the move successful in rationalising property prices in your city? If yes, to what extent?
Demonetisation, as such, has not left major impacts. Property prices primarily depend upon the demand and supply factor, the kind of demand in the market as well as the supply therein. It is true that the market, over the past 2-3 years, has not witnessed the kind of appreciation that was visible five years prior to the move. But, the property prices have stabilised, which is a good thing if we think from the perspective of the buyers.
What are the current challenges that are hampering the realty revival in your city?
There were certain challenges that were responsible for the lack of customer confidence in the real estate sector. Demonetisation, along with the introduction of RERA, has now made the sector organised, and much more transparent than before. The government has also recently announced a stressed fund of Rs 25,000 crore, which has further enhanced the trust of the customers in the market. With all such initiatives, we can confidently say the sector is on its path of revival.
How do you expect the market to fare in the coming 5-6 months?
With multiple initiatives taken by the government over the last six months, including the budget announcement of providing tax concession to the affordable housing, the revival package of 25,000 crore along with linking of home loans base to the repo rate, we believe the sector is progressing in the right direction. The results of these reforms will be visible in the next 6-8 months.