This year, the odds are in favour of real estate sector

This year, the odds are in favour of real estate sector

This year, the odds are in favour of real estate sector
Quikr Homes recently conducted a comprehensive survey to capture the perceptions and expectations of builders on the real estate regulatory authority act (RERA) and goods and services tax (GST) in order to judge its impact on the real estate market. The survey received responses by as many as 300 participants from the top seven metro cities in India. It highlights the key factors that will shape the Indian realty sector in 2018. Here are the major findings:


RERA as a positive reform

To begin with, a majority of the builders are positive about RERA as a reform. 82% of the builders believe that RERA will bring in the much-needed transparency in property-dealing in the days to come. It will also increase the housing demand and buyers' trust. 52% of builders believe that RERA will be the prime force in bringing back the buyers sentiment and confidence, whereas 41% respondents feel that affordable housing is the way to go.

While the Indian realty sector has been witnessing a slowdown over a last couple of years, a slew of initiatives such as ' Housing for All by 2022', the 'Smart Cities Mission', Benami Transactions Act, etc, has attracted a number of foreign investors to the market. According to the survey, 42% of builders believe that RERA is expected to bring in a significant increase in foreign direct investments in the real estate industry because of transparency and organisational setup.

On the other hand, real estate hotspots like Mumbai, Delhi NCR and Bengaluru have seen a huge influx of money in the recent years. Cities with educational and commercial hubs have attracted more investments from buyers and turning into hotspots of the decade. 64% of the respondents believe that Bengaluru, Pune and Hyderabad will be the top three cities where real estate sales would grow fast.

And, real estate prices have started to pick up after all the regulatory reforms. Considering the current market situation, an annual return rate in the range of 10-15% is considered relatively healthy. It is interesting to note that respondents in Pune and Hyderabad markets continue to remain optimistic about the high returns on investment.


Brighter prospects for 2018

The survey shows that 72% of builders from Bengaluru are planning to launch new projects in the next six months. Similarly, Pune and Hyderabad have shown positive growth with 70% builders intending to come up with a new project in the upcoming six months with proper guidelines and complete registration, as they are expecting a revival in buyer's sentiment as compared to previous quarter where only 53% builders launched a new project post-demonetisation.

There will be a focus on affordable housing. The survey indicates that 45% of the respondents are planning to launch affordable housing projects in near future and 34% prefer to launch housing projects in the mid-segment. Post the announcement of infrastructure status to affordable housing, builders expect it to be a favourable project in the real estate market with almost 50% of the builders committing to launch affordable housing projects in the near future.

Furthermore, the future of real estate is digital as more people search for their property-related needs online. As per the survey, 29% builders believe that the online property portals are the best medium to market their projects for the more serious buyers as they source their information from the RERA website and only go for authentic RERA registered projects.

Brokers and internal sales team aid the builders in selling properties. 40% of builders believe that their internal sales team will be the best medium to market their projects as it will cater to the more serious buyers and be loyal.

On the other hand, 37% of builders believe that it is important to have a healthy mix between brokers and internal sales team to sell their projects to capture the entire market, while a healthy hike as compared to previous years can be seen with 23% developers wanting to sell their projects on online property portals as these will prove to be a cost-effective way to reach out to end-users. This will also help buyers make an informed and optimum choice in making their purchase decision as post-RERA, they cannot be fooled through falsified information and they prefer to check for themselves before making any investments.

The Indian real estate industry will be reaping the benefits of a reform-driven environment that is improving investor confidence while preparing the grounds for a more organised and transparent sector. Investment flows will continue to be healthy as the reforms process in the real estate sector continues and past success stories of healthy returns encourage stakeholders for a bright future outlook.

(The author is head, Quikr Homes)
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