#Budget2017: A Little Nudge And Realty Will Take That Big Leap Towards Recovery
The stage is just about set for the grand re-play of Indian's ever-happening real estate.
The Real Estate (Regulation and Development) Act, 2016, is in various phases of implementation across states. In one thumping stroke, the law will instil accountability and transparency deep into a sector that has been slowly losing its position as the most-desired asset class among Indian buyers.
Unaffordable prices are not the only reason that is stopping Indians from investing; fears of getting hoodwinked or not getting the possession on time have played an equal part in scaring consumers away from the market. Even if we risked sounding negative, the current slump in India's real estate sector would likely be more sentiment-driven than pricing. The feeling that you might be investing your hard-earned money at a place where value is stretched and returns dismal in comparison is surely disheartening. Thoughts about the developer not keeping his promise about the possession will further deter you from investing. But when you know there is a law taking care of all that, you would be ready to take the giant leap.
Most of us also got much boggled by the layers of taxes involved in the home-buying process. In the name of various taxes, developers have been seen charging from buyers obnoxious amounts of money. In fact, the mere citing of various taxes and their implementation methods could have been enough to chase buyers away.
With the implementation of the Goods and Services Tax (GST) regime, and a pre-set rate for home purchases, this practice, too, would come to an end. And, these two things could be reason the reason why global bodies are predicting a bright future for India's real estate. The World Bank expects the Indian economy to regain momentum in the years to come, and grow in the range of 7.6 to 7.8 per cent. Reports by global research majors indicate Indian real estate is going to be the sweet spot for investors this year.
All in all, India's real estate is actually positioned at a point where a little nudging from the government — yes, we are referring to the Union Budget 2017-18 that Finance Minister Arun Jaitley will present on the floor of the House on February 1 — would inspire it to take a great leap. The pain caused by a ban on high-value currency notes demands a more effective balm from the government in the form of increased Budgetary support to the sector. Global rating agency Fitch had earlier said that the Indian economy was cruising well till the tsunami of de-legalisation of high denomination currency hit the country, and "a fresh round of fiscal stimulus will be required to offset some of the ill effects of the currency de-legalisation”.
For Jaitley, the sector requires not just increased spending; it would be the number of small steps that would determine how soon real estate would be back to assert its position as the most-loved asset class among Indian buyers.