India’s Housing Market witnesses good bounce back
According to property consultancy Liases Foras Real Estate Rating & Research Pvt. highest level of sales in seven years has been witnessed by Indian Residential Property market in second quarter of 2017.
All the tier-1 cities have contributed to this recovery of housing market. The home sales of major eight cities in India went upto 6% according to the submitted report.
Due to the options available the affordable housing sector has seen a big recovery. Major sales have happened in homes that cost less than 50 Lac Indian Rupees.
In particular properties that are less than Indian Rupees 25 Lacs (USD 39,000) are classified as affordable in residential segment. In this year’s second quarter 17% of home sales has happened on this particular budget property.
Inventory levels that are worked out with a basis that how much time it will take to sell the stock, decreased to 44 months this quarter when compared to 47 months in the previous quarter.
After the action of Indian Government to abolish 500 and 1000 Rupee note to eradicate the black money, the real estate market has slowed down in end 2016. But the recovery has happened in a swift manner this quarter to be precise.
The next big thing that is bothering the real estate market is the real estate regulations that government introduced in the month of May this year. But according to the data available with sources the RERA has positive response in the market.
RERA has streamlined some guidance like every project should be registered state wise under them, if developers delay the project they shall be penalized and 10.9% should be paid by builder to buyer as interest if the project is extended beyond the hand over deadline and so on.
"Even though the developers were not allowed to market the project due to introduction of RERA across the country the sales have risen in the real estate market, this is a promising sign for the market", claims Mr. Pankaj Kapoor, Founder Liases Foras.
Government ban of big currency notes in India had a big impact in sales of Indian residential properties. It should be noted that this currency ban will be helping the realty sector in long term. The builders will be forced to accept only white transactions, i.e. legal money, providing comfort to investors and lenders.
Yet another issue that will hit the India’s real estate market is the new GST (Goods and Service Tax) introduced by the government on July 1, 2017. This measure is undoubtedly a huge reform to eradicate separate state and central taxes. Market expert’s feels that so far there is no pessimistic impact in real estate market because of GST.
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