The real estate sector in India has already witnessed major reforms like the GST and RERA. GST should have major implications for several economic sectors and there will be an impact of the same on real estate as well. The PMAY benefits and Housing for All by 2022 have been kept outside GST. For under construction projects, the effective GST rate will be 12%. Ready-to-move apartments are not under the purview of GST. GST is a major step towards organizing the real estate sector and also the economy.
GST is expected to lower costs of compliance and will ensure greater efficiency throughout the supply chain network. The real estate developers will also benefit from getting input tax credit on the construction raw materials. RERA also ensures more accountability and transparency in the real estate sector and will boost buyer confidences.
The real estate industry is also characterized by the growing influence of technologies such as big data, AI and data science. This helps in streamlining operations and there is increasing automation of business processes. There will be higher transparency in operations due to GST, RERA, REITs and eased FDI for construction. Affordable housing is a huge trend now, one that will only grow further. Also, there have been several measures like the infrastructure status for affordable housing, 100% profit deduction for affordable housing projects, increases in unit livable area and more relaxed timelines for project completion.
The segment now requires a more assertive push in order to be more viable for participation from private players. There should be swifter approvals for affordable housing ventures, development regulation relaxation, land availability, more sync between State and Central policies and others.
The retail category is also witnessing interest from private players, particularly in cities like Hyderabad, Bangalore, Pune and Chennai. There will be ample supply of real estate in these cities by the year 2020. Quality will continue to be a dominant theme influencing the market as per experts. Considerable investor interest is also expected in the warehousing segment.