How Government reforms can Up-lift the Real Estate Industry?

By Abhay Harish Shah, Realty Quarter

With the 2019 general elections, which give Narendra Modi a definite mandate for a second time as Prime Minister, the real estate industry is optimistic because it means a continuation in policies. In the last three to four years, the state has taken several significant policy choices and business leaders and the consumers of the middle class now expect the advantages of these choices to be visible.

“In recent years, the state has implemented reforms such as demonetization, RERA, the Goods and Services Tax (GST), adjustments to the Benami Properties Act and Insolvency Act, all which have altered the property paradigm. The Government has also built a section of affordable housing. The last few years could be rightly defined as ‘short-term pain for long-term gain’. We should now look at the positive effects of the real estate industry,” states Niranjan Hiranandani, president of National Real Estate Development Council (NAREDCO).

Stable Government impact on reforms, infrastructure and buyer confidence:

Shantilal Kataria, CREDAI India Vice President notes that in every company and especially in the real estate sector stabilization is very crucial. The decision-making process is essential for developers and investors. “The current state takes infrastructure projects seriously and as a main priority. Hence, Navi Mumbai airport and the Maharashtra metro projects, together with all other projects in India, will probably profit,” he says. “The stable government will be able to enforce changes quickly,” says Anup Kumar, director, industrial practice, Frost & Sullivan.

Property investors can also be confident that such changes safeguard their interests by knowing that there is a stable government in its favour with such reforms. Despite the difficulties the real estate industry is facing, all stakeholders have accepted the reform bill. “Because of the reforms, consumer confidence has risen on the sector,” said Hardik Agarwal, CEO of Radha Madhav Developers. This means a great opportunity for developers, end-users and investors, he says.

Decisive judgments are indications of stabilization and contribute to corporate faith, says Ankur Jain, CEO of Group Satellite. Recent uncertainties such as the change of DCPR 2034, liquidity problems as a result of IL&FS and shifts in GST regulations have had to be addressed in the real estate industry. We predict that a large amount will reach the industry in the next 12-24 months with the FSI rise in the DCPR 2034, which already has excess supply. With regard to real estate rates, for the next 12-24 months this will be a buyer’s market,” he said.