Residential Real Estate to have significant boom in India in coming years

The residential real estate market in India seems to be doing well in terms of recovery thanks to large number of buyers eligible for low GST rates and home loan subsidies,
along with emergence of student housing and other asset classes.

With over 20% of annual return from 1991 to 2014, real estate market in India has been a very profitable and robust sector. However, it has seen a slowdown over the past couple of years. Its growth rate had been lower than it expected. Hence, a lot of new initiatives have come to improve its resurgence. Here are some of the factors making positive change in Indian real estate market.

GST & RERA

Today, the Goods & Services Tax (GST) and Regulation & Development Act (RERA) have become the two major factors behind such a tremendous growth of real estate market. After implementing GST and RERA, housing sale has seen 6% growth in 8 major cities last year in 2018, along with 75% rise in new launches in 2017 and 11% drop in levels of unsold inventory.

In both commercial and residential real estate market, growth outlook has been positive these days. Real estate is estimated to be $1 trillion market by the year 2030.

Affordable Housing

Government policies favorable to both developers and builders have played a vital role in recovery of real estate sectors, along with structural reforms. Some of the great examples are hike in deduction from Rs. 40,000 to Rs. 50,000, full tax rebate for people with annual income of over Rs. 5,00,000, and increased investment in connectivity and infrastructure development.

The ‘Housing for All by 2022” vision of the government and its push on affordable housing is one of the major factors playing a vital role in residential real estate market. Affordable housing will also give significant boom to residential real estate market in few years to come. It can be seen with huge number of investments in affordable housing segment by leading private companies. The government is also supporting this by extending its credit linked subsidy till March 2020. A home buyer can get interest subsidies on home loans under Middle Income Group (MIG), Low Income Group (LIG), and Economically Weaker Section (EWS) under PMAY (Pradhan Mantri Awas Yojana).