Online Desk: Affordable housing to Play Major Role in Real estate sector in 2018
Affordable housing segment is Likely to continue to drive the real estate sector in 2018 with several developers and institutional funds eyeing toward circumstances in this space drove by better returns. The end-user demand in this segment along with the governments pushed through incentives such as granting infrastructure status is ensuring a rising appetite for such projects across India.
The established developers are expected to grow their extent of business categories. For instance, some branded developers, catering to the ultra-luxury segment, extended their attention on minimal, productive, homes for high and mid-level income category of buyers, a pattern that is expected to gain further momentum.
With both regulatory and taxation policies in the form of Real Estate (Regulation & Development) Act, 2016, and Goods & Services Tax (GST) in place, property development environment will be stable and make the business a more standard process.
“2017 was a precursor to the much-needed stability of the residential market as seen in the nature of launches, which was led by affordable housing. The sector is likely to continue realigning itself to end users’ demands well into 2018,” said Mudassir Zaidi, National Head, Knight Frank. “With RERA in place, the end users’ interest in the residential sector will become positive as investments will be legally protected and there would be the commitment to timely delivery from developers.”
With only the affordable housing segment seeing an ascent in launches in 2017, the new unit launches in residential saw a decline of 35%. The aggregate evaluated new residential units were around 74,000 across India’s best eight urban areas, with Mumbai constituting nearly 31% of these, followed by Pune with 15% of all launches. Affordable housing saw a y-o-y growth of 6%, with Mumbai leading the trend, showed in a Report.
Even as developers grappled with the impact of business fundamentals such as RERA and GST over their business, the government’s clarity on the definition of affordable housing and its benefits led to this growth.
Prime Minister Narendra Modi’s plan of building homes for all by 2022 is set to boost the economy by $1.3 trillion, create 60 million new houses and over 2 million jobs annually.
By Ramish Naqvi