Experts are of the opinion that the Indian real estate market should improve considerably in 2018. Approximately 500 newly launched projects have sold in January 2018 throughout the top 7 Indian cities. The sales volumes for new launches have doubled in comparison to December, 2017. This has generated positive sentiments amongst buyers and the industry in general. The trend of a buyer’s market will continue for quite a long time now as per reports. With there being regulatory action taken against Benami property transactions and black money and stringent rules and regulations, there is no place for speculation anymore. The sector was geared towards buyers last year and 2018 looks to herald the same trend as per experts.
There may be a slightly lower number of new launches although prices will be steady and sometimes even on the lower side with corrections. This will boost buying sentiments and end users will dominate the market. Affordable housing will continue to be a major focus area for the real estate sector. With lower GST rates and other incentives offered for this category along with infrastructure status, real estate developers have been taking up affordable housing as a major thrust area. The Housing for All by 2022 mission of the Government has fueled the growth of the affordable housing sector.
Higher demand for ready-to-move-in properties will be expected this year. With GST being implemented last year and some uncertainty linked to ITC (input tax credit) calculations, the total fund outflow for homebuyers may have actually increased. GST should have a neutral impact although homebuyers are still preferring ready to move in projects which do not have GST imposed on them. Several buyers have already been affected by construction delays for projects which are under construction and hence are now opting only for ready projects. There will be several projects being completed in 2018. Reports estimate this number at around 1.7 lakh units throughout the top Indian cities. This will increase the supply of ready properties and projects which are nearing completion.
The real estate market is likely to be consolidated more with regulatory norms under RERA. Several small real estate companies and fly-by-night operators are likely to exit the market now. Joint ventures are being formed by several real estate companies for projects and smaller realty companies are looking for tie-ups with bigger, structured and organized players who will remain unscathed by all these changes. As forecasted, 2018 should be a good year for the Indian real estate sector with some new launches, steadily improving sales volumes of housing units, lowered unsold inventory volumes and greater consolidation.
