Indian Real Estate Market 2016 and Outlook for 2017
One more year 2016 has gone which was sluggish in terms of demand for Indian real estate sector but was a good year in terms of policy and reforms level. Government has taken several steps like Real Estate, Regulatory Act 2016(RERA), Goods and Services Tax (GST), Benami Transaction Prohibition (Amendment) Act 2016, Real Estate Investment Trusts (REITs) regulations and demonetization drive in order to bring transparency in the real estate sector and boosting the confidence of buyers, investors and developers.
For the Indian residential sector, 2016 was not a very good year due to pressures of increasing unsold inventory, delay in possession, high property prices, low deamnd, cautious buyer approach and a liquidity crunch resulted in limited numbers of project launches in most of the cities despite of increase in the freebies being offered to sell the property, such as different innovative payment plans, discounts, and gifts with bookings etc. On the other hand, ready to move in properteis were in demand in year 2016, due to construction delay in under-construction properties across cities and buyers did not want to take risk.
Due to high demand of quality office/Retail space, commercial real estate market in India continues to grow at a steady rate especially in IT/ITEs driven markets like Hyderabad, Bangalore, Pune and Chennai. Positive changes in policy and regulations have given a further boost to commercial segment.
It is hard to forecast the indian real estate market that is highly driven by sentiments, however it looks set to be a good year for Indian Real Estate in 2017. Things will start improving once the the government cracks the whip on benami property holders, and the Real Estate Regulation and Development Act 2016 (RERA) gets implemented by the states. Obviously, the year 2017 will see the Indian real estate sector to be still more transparent, credible and attractive with only organised players on the ground. Most of the leading banks has slashed interest rates on home loans effective from January 1, 2017 and many other banks likely to follow the suit, which will definitely boost the confidence of buyers,investors and developers. Also, government has announced the benefits on home loan interest to the people with lower incomes by providing rebates of up to 4 percent on home loan of 12 Lakhs taken under Pradhan Mantr Awas Yojana.
In 2017, as real estate prices have already bottomed out, stabilized in these cities with no scope or very minimum chance of further coming down, the primary realty market across larger cities will go up and the buyers who sitting on the fence who had postponed their decision expecting further decrease in prices have already understood the ground reality and have started coming back at least in the case of credible and established long term players of good brand value.
