Realty 2018: Green Shoots Of Residential Real Estate Seen In 2018

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    Although the Indian real estate market is out from the slump, the path nowhere seems very smooth.  The residential real estate market continues to be in the midst of fairly challenging times.

    November 2016 demonetization brought a screeching brake in the Indian real estate sector where the use of cash was very rampant. The after-effects were seen till 2017 and it was only after mid-year 2018, things looked northward.

    GST played a further spoilsport as it increased the additional cost of an under-construction property from 4.5 percent (service tax) to 12.5 percent. However, all was not lost in the residential real estate market. Here are some of the green shoots of the residential real estate market in India seen in 2018:

    • The first 8 months of 2017 saw private equity deals of $13.8bn in realty including a $1.70bn infusion by GIC of Singapore into DLF.
    • The government’s push to affordable housing is now started showing fruits as some positive developments are now seen in low-cost housing. Maharashtra has launched nearly 1,04,000 units with an investment of Rs. 15, 576cr, while Gujarat and the NCR region will put up another 70,000 units with a similar investment.
    • Driven by RERA-induced transparency and an increase in trust, housing sales are estimated to have increased by 25 percent this year at 3.1 lakh units in nine major cities of the country.
    • The supply went down by 22 percent from the previous year, partly owing to the caution exercised by developers as now they have to strictly follow deadlines under the provisions of the new real estate law RERA.
    • Unsold stock is at the lowest in the past five years. Currently, we have only 29 months of unsold inventory at the aggregate level of the nine cities.

    “Combination of the drop in new launches and improvement in sales has brought down inventory overhang to the lowest in the past five years,” ET Now News quoted Prop Tiger’s report. “Currently, we have only 29 months of unsold inventory at the aggregate level of the nine cities.”

    • Another initiative, Smart Cities programme, has also played an important role in the realty market. Under the Smart Cities program, a total of 100 cities will see the program positively impacting the lives of nearly 99 million urban population with high-quality core infrastructure and a more sustainable quality of life.

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