The end of August heralds the beginning of the festive season in the country each year. This is a time when several people plan major investments like homes and cars on account of positive and religious sentiments. Real estate developers also plan to cash in on the festive mood and notch up higher sales volumes in the bargain. However, the festive season last year proved to be a dampener for developers since several buyers chose to stay away on account of economic uncertainties, sky-high prices and delays in completion of projects along with demonetization.
Several prospective buyers put off their home purchases until the implementation of RERA this year even though developers offered tempting festive schemes and discounts last year. The 2017 festive season has started off on a more positive note according to industry experts. The Goods and Services Tax coupled with the Real Estate Regulation and Development (RERA) Act and Benami Properties Act has led to more transparency in the sector along with increasing overall accountability. Homebuyers now know that their interests will be safeguarded and projects will be delivered in a timely manner.
Housing for All by 2022 is a major mission for the Government and the PMAY and CLSS scheme under it offers incentives for affordable housing projects and customers alike. The deadline for completion of affordable housing projects has been increased to 5 years and interest subsidies of 3% and 4% are available on home loans of Rs.9 lakh and Rs.12 lakh respectively as per the PMAY. Developers are being incentivized for affordable housing with it getting infrastructure status. Several developers are now coming up with affordable housing projects. More than 70% of new project launches in H1 2017 were projects priced within Rs.50 lakh.
The economic sentiments have also improved with inflation levels firmly in check and more than 6% of GDP growth forecasted. The real estate sector has already garnered $1990 million by way of institutional investments in H1 2017. The residential sector alone contributed a whopping 54% of investments. There is abundant ready-to-move supply in terms of apartments and after RERA, developers are also hurrying to complete projects which are under construction. As per reports, there are close to 70,000 unsold, ready-to-move-in apartments across major tier 1 cities in the country. Also, this means that new projects launched in the festive period will come with really attractive rates, schemes and discounts.
The home loan interest rates are at their lowest levels in the last decade and banks are already offering several freebies and benefits to customers. Going by all these trends, this festive season may usher in a new revival story for Indian real estate.