Reforms bring transparency in realty sector
Regulatory reforms brought through the Real Estate Regulatory Act (RERA)and transparency brought about by Goods and Services Tax (GST) will effect consolidation in the real estate sector.
“The consolidation will see larger players peak in strength, and smaller ones getting eroded or aligned with the established ones,” Surendra Hiranandani, CMD, House of Hiranandani told BusinessLine.
“Owing to stringent RERA norms, it is clear that only credible developers who conduct their business with transparency will survive in the future, and will be able to navigate the roadmap,” he said.
“This is good from a buyer’s perspective as one is assured of quality product within stipulated timelines.”
The recent trend in the decline of new project launches has impacted the market, and is expected to gradually find some equilibrium with demand, and prices subsequently picking up pace.
“The current environment presents an opportunity to take the plunge as attractive offers are on, and are available with lower interest rates,” he said.
“If not now, we certainly hope these factors lead to more fence-sitters spring into action in 2018.” The ‘Big Bang’ reforms implemented this year (2017) for real estate sector has brought about significant changes in the tax, regulatory and business environment in the country.
According to Hiranandani, post demonetisation, the introduction of RERA and GST improved the transparency and accountability in the sector, catching the attention of institutional investors who are now looking at Indian real estate with renewed vigour.
Notwithstanding the economic disruption, the commercial real estate market segment remained robust in 2017.
“The office leasing market will continue to remain healthy in 2018 and beyond, reflecting strong employment growth. We expect Real Estate Investment Trusts (REITs) to be launched in India in the coming year, which will provide investment opportunities to smaller investors and private equity players, who are now gearing up to expand their retail portfolio across Indian cities.”
Co-working spaces are also expected to see a spike in demand in the coming years, as they are becoming platforms for collaboration, exchange of ideas and higher networking opportunities.