Real Estate in India after Independence
The Indian real estate industry has undergone a significant transformation in the 75 years since the country attained freedom.
While it hasn't always been in the consumer's interests during this time, it most definitely is now. Cities across the nation have grown, new economic forces have emerged, and employment is being generated at all levels.
Similarly, suitable housing is currently being built for people of various economic levels. The current administration has prioritised the demands of the populace and implemented a number of legislative efforts to make homeownership accessible and appealing.
Housing loan markets have become extremely competitive, much like the real estate market, giving consumers more options. Following the government's demonetization initiative late last year, property values have likewise stabilised nationwide.
Although it was first anticipated that only the markets for resale homes and land would be impacted, it soon became clear that the decreased sentiment had also permeated primary sales.
During the year to Q2 2020, according to PropTiger:
- Hyderabad witnessed the highest y-o-y price increase at 7% (1.7% in real terms), to an average of INR 5,505 (US$75) per sq. m.
- In Ahmedabad, prices rose by 6% y-o-y to an average of INR 3,104 (US$42) per sq. m. (up 0.8% in real terms)
- In Kolkata, prices rose by 3% y-o-y to INR 4,178 (US$57) per sq. m. (down 2.1% in real terms)
- In Bangalore, prices rose by 3% y-o-y to INR 5,299 (US$72) per sq. m. (down 2.1% in real terms)
- In Pune, prices rose by 2% y-o-y to INR 4,951 (US$68) per sq. m. (down 3% in real terms)
- In Mumbai Metropolitan Region (MMR), the average house price rose by 1% y-o-y to INR 9,490 (US$130) per sq. m. (down 4% in real terms)
- In Delhi NCR, prices increased 1% y-o-y to INR 4,293 (US$59) per sq. m. (down 4% in real terms)
- In Chennai, prices were steady at an average of INR 5,138 (US$70) per sq. m. (down 4.9% in real terms)
Introduction of GST being a Catalyst in the Real Estate Market
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Considering the prior convoluted and frequently opaque levels of taxation that applied to real estate purchases as bondage, GST is a significant step towards financial transparency, which can be seen as emancipation in the context of real estate.
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The majority of past taxes have been combined into this single tax and knowing with greater certainty how much the total cost of purchasing a home will be will free the mind from uncertainty.
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GST is a blatant example of a nation that is fast modernising and wants to become more appealing to both domestic and foreign businesses.
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Its adoption was not without difficulty, but it was clearly necessary for a nation that wishes to be seen as modern, transparent, and responsible. It undoubtedly serves as a symbol of emancipation in that sense.
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GST is still engaged in its own "freedom struggle" as it strives to uphold the 'one nation, one tax' pledge, making it apparent that it is a work in progress. A transparent, equitable, and forward-thinking financial system is one of the main indicators of a properly developed country.
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As a developing nation rather than a fully developed one, India must strive to meet international standards of progressivism, and the GST is unquestionably a significant step in that direction.
RERA playing a key role in India’s Real Estate Independence
RERA may still be working out some kinks, but it is undeniably here to stay and has at last put the consumer in control.
The Act promises to eventually bring the residential property market to a level with worldwide standards of openness and accountability to customers, making it by far the most persuasive representation of independence for home buyers in contemporary India.
As a result of this significant legislative change, we are already noticing a rise in homebuyer interest, and things will move along with more speed in the future. Housing affordability is also increased by the government's numerous consumer-friendly legislative initiatives, quick infrastructure investment, and the opening up of new areas.
The market is growing bigger, more wholesome, and more attractive than ever before as RERA concurrently purges it of dishonest components. The consumer will primarily benefit from this tremendous change, which is in fact just around the corner.
A consumer power enabled by technology
The topography of the Indian real estate industry has been significantly more than just opened up by the Internet. Additionally, it has significantly revitalised the job market across practically all sectors, not only for IT/ITeS positions.
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In terms of infotech-enabled firms, India is currently at the forefront, with e-commerce and a thriving start-up culture driving economic growth.
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Today, there are around 500 million Internet users in Independent India, and a plethora of new options for generating income have emerged.
Real Estate sector got a further boost with influx of IT Companies in cities such as Bangaluru and Hyderabad and subsequently IT Industry spread to other parts of the country such as Kolkata where entire area –sector 5 in salt lake was dedicated for IT Companies, Gurugram, Noida, Vasi in Mumbai, Pune, Chennai and many more. The impact of IT and ITES development in India had a major impact since the time of Y2K bug, through which India left its imprint on the entire world.
Government announced Pradhan Mantri Awas Yojna to provide basis accommodation to every Indian by 2022. Through Union Budget 2019, the Government has announced additional deduction up to Rs. 1.5 lakhs for interest paid on loans borrowed up to 31st March, 2020 for purchase of house valued up to Rs. 45 lakhs. With rapid urbanization, comes a greater need for the housing. So, the real estate sector in India has very huge scope in future. The present situation caused due to COVID-19 will have some adverse effect in the growth of Real Estate Sector but recovery shall bring all progresses in line with government plans.
Source - Extent of Independence of Real Estate in India (timesproperty.com)