Analyzing the policies and regulations of 2016-17, affordable housing in Indian real estate sector is expected to continue to grow in 2018.
With policies like Real Estate Regulatory Act (RERA), Real Estate Investment Trust (REIT) and Goods and Services Tax (GST) in place, developments in the sector are likely to remain stable. Considering the existing corruption in the real estate sector, the Indian government implemented these policies with an intention to protect the interests of buyers, as well as fair developers. The property development environment will be stable and make construction business a more regular process.
Established developers are expecting better returns on the affordable housing this year. Moreover, the rising demand of end users is ensuring a rise in the construction of these spaces across the country.
Various developers are expected to expand their business categories and elaborate the scope in the residential sector. Several branded developers that cater to the ultra-luxury segment, are expanding their focus on compact and efficient homes for high and mid-level income group of buyers. This trend is expected to gain further thrust this year.
With all the policies implemented, interest of the end users in the residential sector will become positive. This is because investments will be legally protected and developers will be committed to deliver timely projects.
In 2017, only the affordable housing in India saw a rise in launches. Moreover, there was a decline of 35 per cent in launches of new units in residential sector. Total estimated new residential units were around 74,000 across top eight cities of India, where nearly 31 per cent of these were constituted in Mumbai, followed by Pune with 15 per cent of all launches. Affordable housing in India saw a year-over-year growth of 6 per cent that year and city Mumbai was leading the trend.
However various developers dealt with the impact of business fundamentals such as RERA and GST over their business, the government’s clarity on the definition of affordable housing and its benefits led to this growth. Moreover, Indian Prime Minister, Narendra Modi plans of building homes for all the people by 2022.