Recently, Modi Government has completed three years of administration. While, many changes have been done and realized in different sectors of the industry, the real estate sector is yet to witness “Achchhe Din”. Though one remarkable reforms have been made in the past three years, the market sentiments have changed and the residential market, which was largely an investor driven market in the past, has changed to an end-user driven market. After the National Democratic Alliance formed its government under the leadership of Prime Minister Narendra Modi about three years ago, the real estate sector has witnessed several reforms. TO name a few, these are the Real Estate Regulation & Development Act (RERA), Benami Properties Amendment Act, Land Acquisition Act, and the much-discussed topic of the moment – the Goods and Services Tax (GST). PM Modi has assured great consolations to enable affordable housing for all by the year 2022. Other reforms include stabilizing and developing the infrastructure status in the country.
All these announcements made are targeted for a long-term benefit and their practical implementation on the ground would change the way property and real estate sector works in India. However, the biggest question is, after three long years of Modi Govt. what has actually changed. Has the common man in the country found a permanent shelter for himself in the midst of this rush of the fast-emerging concrete jungles in Indian urban cities? Here we are presenting a factsheet for you to judge this sensitive topic raised in the title of this article.
Changing market sentiments
One can clearly visualize in the last three years that the real estate market, which was largely an investor driven market to the end-user driven one. Importantly, the shift of this orientation is much visible in many traditional cities, such as Delhi, Gurgaon, NOIDA, Faridabad, Mumbai and Navi Mumbai. Especially, after the demonetization episode, builders have well understood that there is not point looking for investors and grow the projects at their discretion. Rather, it is the end user, the actual owner of the house, who should be focused. With many short-term investors staying away from the market, a scenario of volumetric investment has, however, not seen in the last three years. The good part that came out of all these, is that builders are now focusing more on finishing their delayed under construction projects.
Changing Market Segmentation and Target Audience
The unique selling proposition (USP) of today’s realty and residential property market is no more revolving around the terms such as luxury, affordable luxury, ultra-luxury, and super luxury. Developers and builders have well understood that with minimal inflow of investors’ money, the market has become stagnant for the luxury class. Government initiatives, such as “Housing for All” and the “Credit Linked Subsidy Scheme” (CLSS) have made many provisions for common men to dare for his own house. Hence, developers, are more willing to seize this opportunity to their benefits, where supply of funds to the projects is assured and timely. Developers too are trying to find out ways to make house affordable.
Streamlining the cost of buying
The market economics in the present time is very tight. There are only serious buyers available at the moment, who are actually willing to buy a house for themselves. There are two main reasons why the cost of buying of houses has decreased in the last three years. Firstly, sales volume has gone downwards as the average prices have not increased in the last three years. Secondly, there is abundance of unsold inventory in the market right now. To offload these unsold properties, developers are offering great discounts and customized payment plans, so that the buyers can actually go for the purchase.