Real Estate Trends in 2017 by Mr. Santosh Naik (M.D & C.E.O Disha Direct)

by Shrutee K/DNS

The Real Estate Sector would be tremendously be affected by the various Government Policies & regulations like-

Demonetisation: 

Due to the no availability of cash for real estate transaction has affected the land deals as well as high value real estate deals. The effect will be prevalent in 2017 as well.The affect of cash crunch could be seen even in the Secondary (resale) market where in cash transaction was involved.  Primary market slowed down with buyers expecting drop in prices.

RERA - Real Estate Regulatory Act: 

This act was drafted as a result of the objections and suggestions released by the state government. Mr. Gautam Chtarjee was appointed as the Housing Regulator under this act. In the state of Maharashtra the Act will come in to effect by 1st July 2017. 

After the decision of the state government there is a widespread panic among the developers / consultants in the state. Once the Real Estate Regulatory Act comes into force, most small and medium developers will extinct and only professional developers will survive. 

REIT - Real Estate Investment Trust: 

The REIT listing is expected in the next few months of 2017. Good commercial spaces will be listed first and Investors can invest in these spaces and also can enjoy the benefits of the booming commercial market. 

Benami Property Act:

The act will come to force during this year, curbing the huge benami transaction carried out in cash in the real estate sector. The act will affect overall real estate market on a large scale.

GST Bill:

The GST bill will come into effect latest by September 2017 and will affect the overall market depending on the % of GST on real estate transactions. 

Policies for Affordable Segment: 

With the PM's focus on affordable housing, many policies would be announced which would benefit the affordable housing sector. The Interest subsidy policy has been already announced and we can already see the outcome. Now as the general public will increase its investment in properties, many large developers will enter in the affordable home segment. 

Reduction in Home Loan Interest Rates: 

With home loan rates touching 8%, during next few months the action end-users and fence sitters will start purchasing homes. This will result in a boost in the real estate segment in the near future. 

Union Budget: 

Many developers will depend on the Union Budget that is scheduled on 1 st February. The industry is expecting benefits for the real estate sector in current budget. 

Demand in 2017:

The demand for Good quality commercial space will see a healthy growth. However, the luxury residential market will be stagnant. 

Mid prices residential that is residentials ranging from  INR 25 lacs to 75 lacs will see substantial demand.

Affordable housing ( 8 lacs to 25 lacs ) will have highest growth provided, good quality projects are developed.

Senior living industry will emerge as growing industry 

Trend for 2017: 

There will be a huge demand and supply gap in the housing sector. 

It will be an end users market. Customers will understand that with no increase in prices for last 2 or 4 years, this is the right time to buy. 

Mid and low segment will grow due to demand from actual users and low home loan interest rates.

Price correction will take place only in few micro-market. 

Investors will not invest in real estate segment but they will have a good opportunity to invest in REITs to stay invested in this sector. 

For developers this year would be survival for the fittest. Developers will become more transparent and professional to sustain and grow.

Central and State Government will streamline the approval process which will bring down the approval time

FDI investment will increase