2018: Bringing Back Realty To Life

The year that is going by has been a year of many ups and downs for the real estate sector. In 2017, the sector underwent major change, attributed to the key reformative legislations introduced. This phase of change made homebuyers investment-shy while developers engrossed themselves in making their business compliant with the newly introduced real estate law.

According to Ankur Dhawan, chief investment officer, PropTiger.com, “In 2017, homebuyers experienced a yo-yo sentiment. While 2016 ended on a bad note after demonetisation, in the beginning of 2017, when banks began to cut rates, homebuyers made a comeback. After the implementation of the real estate law, while the developers were busy registering projects, homebuyers took a step back and waited for the developers to register their projects and then invest in RERA-compliant projects. Then, with the coming of the Goods and Services Tax (GST), the homebuyers again turned fence-sitters until September, waiting for  clarity on the new tax regime. It is only now from past two months that the homebuyers have regained confidence in the market and are making a comeback.”

2017: The year of change

The year 2017 will be the template for the stakeholders in the industry to show their business a way forward. After many key legislation announced and various relief and boost given to the sector, the year has been a foundation stone for a more organised and transparent sector.

“The developers at the very beginning of the year started focusing on completing the projects rather than launching new ones, creating more ready-to-move-in inventory. Another key change that we witnessed this year was that smaller developers joined hands with the renowned names. As large developers have funds or have the bandwidth to raise funds, it is becoming easier for smaller developers to complete their projects,” says Dhawan.

These steps will give rise to the share of organised developers in the market. The ones complying to the new legislation will survive, making the sector more transparent and reliable for the homebuyers.

These moves will also bring down the cases of pre-launches and new launches where developers promised timely deliveries and world-class facilities, but, at times, failed to deliver both.

“This will make developers more professional and more planned about what they are bringing to the table,” Dhawan adds.

2018: The year of consolidation

The base of a new beginning was set up in 2017, and in the coming year, the sector will see building blocks being put to construct a strong business. Some of the major changes will include:

No more RERA hiccups: Many states across the country until the end of 2017 were trying to resolve the hiccups and the issues related to the real estate law. In 2018, this is expected to resolve.

Rise in consumer confidence: Under the recently introduced Insolvency and Bankruptcy Code, Dhawan says, “we will see aggrieved homebuyers getting justice in the Amrapali and Jaypee cases. Once the verdict is out, we will see consumer confidence rising”.

The year of delivery: This year, developers who have launched their projects will be seen delivering them in 2018. “We will witness huge deliveries and projects getting occupation certificates. It is a positive year, as homebuyers will be moving into their new homes,” Dhawan says.

The growth in numbers: All these put together are expected to move the market towards positive numbers. Although the launches and deliveries will increase, the number game will just be marginal. According to Dhawan, prices are likely to remain stable while home sales and launch numbers are expected to grow by 15-20 per cent.

Ready-to-move-in homes to gain traction: Given that developers are now completing their under-construction projects giving rise to ready-to-move-in homes, this segment is expected to gain momentum. This year, more and more homebuyers will be investing in ready-to-move-in segment rather than waiting for under-construction projects.

Infrastructure to boost new pockets: The infrastructure projects across states, including highways, airports, Metros among others will give rise to new pockets. Wherever these projects create connectivity, new pockets will emerge. “There have been many infrastructure projects that have been left incomplete. These projects are expected to be completed in 2018. These include the Dwarka Expressway, the Delhi-Meerut Expressway, the Noida-Greater Noida Metro connectivity. These infrastructure developments will give a boost to prices in localities connected,” says Dhawan.