The doubt in the form and way rules of RERA (Real Estate Regulatory Act) will be implemented across the country and the execution of Goods and Services Tax since 1st July has created a great amount of chaos in the minds of stakeholders, specifically in reference to the meaning of on-going projects.
The wait-and-see policy is still prevalent in the sentiments of the sector. Various stakeholders are patiently waiting to get transparency and precision on the policies and changes over the coming six months.
But the industry does have some kind of hope. The prospects in the future seem to be positive in the hope that the troubles caused by GST and RERA will soon settle down.
As per the index, it has been witnessed that in the second quarter of 2017, new residential projects which have launched have recovered. Further also, the new launches are expected to improve in the coming six months. It is also possible that the positive prospects are due to the coming up of the festival season.
But the situation of sale of residential units in second quarter of 2017 has not been optimistic. It will take a long time before the buyers show interest in the market, according to 68 percent of respondents. Confidence of the buyers, which had been ruined by delay in deliveries of projects, non-deliveries of projects and litigations, will only gained back if the effectiveness of the changes in policies made by the government is at par.
On the other hand, 59 percent respondents said that the residential prices will witness an increase in the remaining half of 2017 as there is an increase in agreement costs for GST and RERA.
But our belief is that the current negative situation is temporary. As the stakeholders will get clarity on the policies, their sentiments will become positive.
The special status that has been given to the affordable housing sector and bringing transparency in the sector will definitely help to increase the flow of institutional funds at reasonable rates in the sector.
In the market of office, the coming six months will see a limitation in new supplies. This scarcity in supply will ultimately increase the rentals.