After a cold shoulder, the buyers are flocking to buy homes in recent times. As the trend shows, it is going to accelerate in the next few years. It is mainly due to the government pledge to offer a house for all by 2022. Such acceleration is sure to impact the property market and lure more buyers to warm up the property sector.
Thanks also go to the restructuring of the Goods and Service Tax (GST), the anticipation of lower interest rates, and favorable prices. The developers have now restricted to limited projects. It helped to clear up the stagnant inventory.
In fact, the age of came down to 30 months in March 2018 against 50 months in the same period of the previous year. The number of unsold properties also dropped to 665,000 units in the last two years. While it achieved a 16% decline, it is quite high from 496,000 units in 2013. These are sure indications of an increased buying spree.
There is no denying that housing is important to the economy. Its volatility is also a great concern to the banks and financial institutions. With the emphasis on private initiatives, there is a surge in real estate development. Such escalation is not limited to the metropolitan cities only but also extended to the suburbs.
No matter what is your financial status, Flat in Mumbai appears in everyone’s dream. There is nothing wrong with it. People living in other metropolitan cities also dream to own a flat there. In view of the favorable property market condition, they will be able to have their dreams fulfilled.
The good news is that ready flats and those nearing completion are selling at a fast rate. Among all the property segments, the affordable and the middle-income groups are showing higher sales. This is mainly due to the conducive macroeconomic environment. Now developers can launch projects without the several odd clearances that were earlier necessary. It contributed to the boom in the realty sector.
Sale of residential properties in the top seven Indian cities took a great leap. This has risen to 25% in the first six months of the preceding year. The sale reached 64,080 units from January to June 2018 against 51,452 units for the same period in the previous year. Among this Mumbai has the highest sale with 13,659 units. Bengaluru was the next with 13,382 units.
The favorable price structure is also conducive to an increase in property sales. On average, the property prices exhibited a rise of 2% only. It increased from INR 5,480 per square feet for the period from January to March in 2017 to INR 5570 per square feet for the same period in 2019.
DLF, the most promising realty developer has INR 2435 Crores in FY19 against INR 1,000 crores in FY18. This shows a steady increase in the property buying sector. With the formation of a stable government at the center, this is sure to boost up the confidence of the property buyers. It will ensure more velocity in property sales in the future.
NRIs are also turning back to the Indian property market
The NRIs always prefer to have a property in India to have a root in the country of origin. Coming out of the reluctance of the past, they are now taking interest in the Indian property market. This has happened due to the introduction of the Real Estate Regulatory Authority (RERA) and GST.
These game-changing policies adopted by the government streamlined the process and made it transparent. This has boosted up their confidence and new NRI investments are now fuelling the Indian property market. The present conversion rate from dollar to INR also encouraged them to make investments. Moreover, a healthy return on investment is also a solid factor to make them interested.
NRIs generally prefer luxury homes from the leading developers. They are also showing interest in affordable housing for better rental income and long-term appreciation. Since they can avail home loans as per RBI mandate, they are now eager to buy properties.
To provide shelter to all in a highly populated country, like india, is a great concern. For this, the government of india has taken a number of initiatives for the development of this sector. It also has a plan to build 100 smart cities and this created opportunities for the developers.
The introduction of the following initiatives is further drawing more buyers to the property sector. It has sanctioned more than 6.85 million houses up to 2018. Under this scheme, the government offers subsidized credit based interest rates linked to their income. This is a great step and draws more crowds in the affordable housing market.
Salient features of RERA
Transparency: The developers have to submit original documents. They cannot make changes in the plan without consent from the buyers.
Standardization: Carpet area is categorically defined and formula for calculation is established. This will ensure the right usable are. Thus, the unlawful developers cannot ask for increase price with an inflated carpet area.
Fairness: Builders have to sell flats based on the carpet area and not the super-built area. In the case of a delayed project, the buyer can claim their investment back.
Quality: The developer has to address any quality issue raised by the buyers within 5 years of purchase. They have to rectify the same within 30 days of the complaint.
Security: All projects have a unique registration number. Minimum 70% of the investment has to be kept in a separate account to use for construction and related expenses. The promoters cannot ask for more than 10%, as advance, before signing the sale agreement. The developer has to compensate if there is a mismatch between promises and delivery.
The Indian property market has risen after getting over the socialist hangover that prevailed for long. People are now investing in nearly completed and apartments ready for moving in. With all favorable market signs, this is sure to go through a great turn around in the coming years.
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