The last 5 years have been quite eventful for the real estate sector. With new government policies, schemes, regulations, increased investments and new taxes, the face of the industry changed.
Introduction of RERA (Real Estate Regulation Act) 2016, came as a major game changer for the industry. It is proven that whenever a regulator steps in, it is in the larger interest of everyone. The Act has transformed the way real estate transactions happen in India. There is greater transparency and trust has increased among both the investors and the end users. The systems are more streamlined now and the transactions are process driven. This is ensuring more security to the foreign investors and there is no place for false commitments and delays anymore.
Demonetization in 2016 brought about a lot of confusion and uncertainty. Without a doubt, all economic activities had slowed down initially but the dust settled quickly and within few months, the real estate market in Ahmedabad sprang back. People realized that hoarding money would not lead them to earn, hence they started investing. Interest rates also reduced and people invested more. Developers who had fair and transparent business practices actually stood to gain from this government measure as opposed to the initial market sentiment.
In 2017, implementation of GST brought about a structured tax regime. Post initial resentment, it was realized that the GST regime made calculations simpler for developers to charge and buyers to understand. With GST coming in, builders now operate with greater accountability and stringent solvency requirements. The buyers need to pay GST for properties under construction which might be slightly higher than the taxes levied earlier, but that hasn’t had an impact on sales over a period of time.
Covid-19 had devastating effects on the economy as a whole. The sentiments were low, the spirits of the common man were dampened. Surprisingly, post the first wave, there was a surge in the demand for residential properties in the Ahmedabad market. People valued their homes more than ever and realized the need for upgrading their dwellings. Work from home requirements clubbed with home quarantine needs made people invest in newer and more equipped properties.
The government has also been instrumental in backing one of the most important sectors contributing to the GDP. Schemes like Pradhan Mantri Awas Yojana aiming at affordable houses in urban areas across the country are giving a major boost to the residential sector. The government has brought down the GST rate and has allowed FDI to the tune of 100% for townships and settlements development projects. Interest rates on home loans were also reduced by the government. With increased transparency and results, there is a surge in the private investments in the real estate sector.
Real estate continues to be one of the best tangible investment to grow one’s money. In the long run, it can easily beat the returns from other asset classes. It is safe and secure and the sector is slated to grow.
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