Indian property market has transitioned to become the most profitable sector over the last few years. Most of the metropolitan cities are employing strategic ways of catering to residing needs for affordable housing. The evident transition wherein residents are moving towards becoming first-time property aspirants has paved the way for social and IT infrastructure development. With the 2019 General Elections done with, the Bharatiya Janata Party has created a phenomenal presence all over the country. The party has had a clean slate of victory across major metropolitan cities. The second term for our prime minister, Shri Narendra Modi would help property investors capitalize on key opportunities for continuous and persistent growth.
Going back 10 years, the property market wasn’t performing to its full potential. With aspects ignored, most of the developers weren’t able to cater to expectations set, which led to delay in project delivery. However, a lot has changed since then. The inclusions of government-oriented real estate governing bodies like RERA and tax reforms such as GST has revolutionized the realty market. Developers are now inclined towards formulating constructive strategies that help provide affordable residential variants and help prospective builder to release their excess inventory. Also, the recent GST rate cuts for under-construction projects has helped residents from lower income groups to consider investing.
Especially Mumbai, which is renowned for its staggering land rates. The Pradhan Mantri Awas Yojna initiative by the prime minister of the nation has catered to different sections of the society. The housing for all project has even encouraged potential residents consider investing as they would certainly have something of their own in the form of assets that could help them provide for their loved ones. Taking the recent development into account, there are many challenges that the new government should overcome. Let’s analyze them to have an understanding of what needs to be done in order to stabilize the Indian property market.
Enhancing liquidity because of introductory tax reforms
Initiatives by the previous government in regards to reforms have brought about a sense of purpose in the real estate market. RERA and GST reforms has helped in promoting transparency as residents are provided with prior project information so they can analyze other financial priorities for a prosperous future. However, the inclusion of new reforms and policies has disrupted the amount of residential spaces that are being sold. Demonetization has impacted the liquidity for renowned property developers which has led to delayed project delivery. With scare liquid resources, developers are unable to allocate their funds for current and upcoming projects.
Struggle to provide affordable housing
There has been evident rise in demands for affordable housing. Most of the metropolitan cities are witnessing rising social and IT infrastructure development which has increases prospective land rates. Also, developers who are short on funds are finding it difficult to complete projects on time or offer affordable living spaces. The new government in power should make prospective perspective changes and provide the required liquid assets for a smooth and effortless transition.
Land availability depletion- What should the government prioritize on?
Developers are now in a situation of dilemma as the amount of land available for constructing residential projects is scarce. Metropolitan cities like Bangalore are going through a phase wherein the supply to demand ratio isn’t consistent. The increase in demands along with minimal availability of land is making things difficult for prominent realtors. The ruling government after the 2019 General Elections should create ways to provide more land and effective resources to cater to diverse residential expectations without affecting the eco-system. In conclusion, with utmost contribution from potential stakeholders of multi-national corporations, the government should formulate a clear mandate thereby focusing on creating more infrastructure and jobs in the property market sector. Allocation of sufficient funds would primarily help investors and property owners to analyze their opportunities and contribute to the nations economy.