Will GST, RERA Push Property Investments?

After several reformatory measures were introduced ( this includes the sudden announcement to ban existing currency notes by the Centre on November 8, 2016, to the introduction of the new real estate law and the Goods and Services Tax regime) , prospective homebuyers are confused. Should they make a purchase or wait for the right time? Is there any benefit in waiting? Looks like those who have the budget will buy.

“The recent Shriram #Right4U Challenge, organized by us had over 7,500 homebuyers queuing up for properties across the prominent corridors of the city. Over 300 units have been sold. Even the recent layoffs in the information technology market didn't stop the homebuyers from investing in property,” claims M Murali, managing director, Shriram Properties.

He further added: “Property is a long-term investment, and we came out with this good initiative, keeping the customers interest in mind. With the no pre-EMI offer, homebuyers came forward to buy with much enthusiasm as it does not load the customers.”

However, what impact did the introduction of the real estate law and the GST have on buyers?

Priya Ranjan Swarup, director-general, Construction Industry Development Council (CIDC) , says: “Most homebuyers actively look out for property purchases when they are in their late 20s to 30s. Budget is the prime concern and financial security is of utmost importance. Given the lack of sizeable job creation leading to unemployment and the layoffs within various sectors, most prospective homebuyers would wish to stick to the corpus they have saved over the years and defer home buying.”

Thus, the real issue is jobs. The lucky ones who come from well-to-do families will be the ones who would be looking at property investments. Legislations such as RERA and GST would be helpful to them. For the remaining, jobs become the main issue.

In an interview, Irfan Razack, CMD, Prestige Estates Projects said: “Rules in many states that we operate in are not yet placed ... GST will create confusion in the minds of the customers and developers. There will be a bit of a churn for a few weeks or months. After that, things will completely stabilise.”