Challenges for Indian Real Estate Sector: Report by ANAROCK Property Consultants
The Indian real estate sector is still hamstrung by the generalized economic slowdown, and the unsold inventory of 6.65 lakh units across seven major cities remains a hard fact. A government that is sensitized to both macro-economic needs and the opportunity to boost consumer sentiment can take more steps to give festive season 2019 a shot in the arm.
The Modi government has already displayed its focus on delivering macro-economic solutions rather than short-term sentiment boosters. The announcements of increased credit support for home purchases, vehicles and consumption and added liquidity of INR 20,000 crore to housing finance companies for lending to real estate developers illustrate this approach.
This is a government which prefers to detoxify and build the country's economic immunity and strength rather than infusing temporary energy bursts via 'fiscal steroids'. Given this approach, it is perhaps unrealistic for the real estate sector to expect a policy windfall this festive season. What the sector can reasonably expect in the immediate future are:
The creation of stress asset funds to complete stalled projects
A more democratic taxation approach to under-construction and ready-to-move properties
Immediate easing of lending norms to the real estate sector and thereby get stuck projects into gear again
All and any measures to attract long-term investors to push sales in the residential market
Mandatory enforcement of RERA across all applicable states and Union Territories
The Finance Minister has promised immediate measures to benefit homebuyers, and the real estate sector hopes the imminent and exclusive announcements that will give festive season 2019 the impetus it needs to ramp up sales and fulfil many more dreams of homeownership.
While the festive season is both auspicious and opportune for such interventions, they really cannot come soon enough for India's struggling housing industry.