Real Estate and the New Government
After the 2019 elections, we hope the government will strengthen its present initiatives and cause a revival of the real estate sector. Problems like delayed housing projects, unaffordable property prices and unsold inventory will get the attention they deserve. Some of the reforms have already been introduced during the last five years but are expected to get a real boost this time around. Here’s how the government is expected to help the industry:
The Real Estate (Regulation and Development) Act of 2016 was created to boost investments in the real estate industry and also to help protect home buyers. Its provisions provide greater transparency in (the marketing and execution of) projects and protection of buyers by stating that builders have to quote prices based on carpet area and not the super built-up area.
The government has decided to cut the Goods & Services Tax (GST) rates for under-construction projects to 5% from an effective rate of 12%. This move is expected to push demand in the sector which will keep developers committed to building more affordable homes and sticking to their timelines.
Housing for All
Four years ago, the Pradhan Mantri Awas Yojana (PMAY) scheme was launched which aimed to provide affordable housing for all by March 31, 2022. After the re-election, this plan should get more focus and attention so that the goal can be met, if not by 2022 then at least by 2024.
Boost to the Economy
The victory will give the government the motivation it needs to make bigger steps towards reforming the economy. It’s planned to give cash handouts to farmers and spend heavily on infrastructure and exports will boost the economy, invite foreign funds and also revitalize the real estate industry.
The real estate sector has a lot of hopes from the new government. With the second term, expectations are that the government will resolve the liquidity crisis that the sector is facing while increasing transparency and accelerate the resolution of stressed projects.