The current government seems committed to encourage real estate growth by easing out rules for FDI, unveiling 'Make in India' campaign and proposing 'housing for all' by 2022. While the proposals will take time in implementation, here are the five things that can consolidate property buyers' sentiment towards the real estate in a short time:
1. Reduction in Home Loan Interest Rates: The Reserve Bank of India (RBI) has recently announced cut in key interest rate by 25 basis points (bps) from 7.75 per cent to 7.5 per cent, bringing hopes for the home loan borrowers to pay less on their monthly EMIs. Mr. Anil Mithas, Chairman & Managing Director at Unnati Fortune Group says, “the surprise announcement will boost the real estate market. With the rate cuts announced second time in this year, first being in January and second in March, the cumulative cut now reaches to 0.5 per cent which will enhance lending powers of the banks and subsequently reduce monthly EMIs on home loans.”
2. Real Estate Regulator to bring in more transparency: It is often seen that many real estate projects got delayed or stuck in courts for not having appropriate permissions from authorities or for not completing legal formalities on time. It is therefore proposed a quick implementation of a real estate regulator that can keep a check on the legal status of a property and grant approvals to new real estate projects. Mr. Anil Mithas of Unnati Fortune Group says, “Implementation of a real estate regulator will bring in more transparency in the property buying and selling activities, and encourage buyers to step forward.”
3. Simple Rental Laws: With a large number of people having more than one property, it becomes a common practice to rent an apartment and earn significant rental income from it. But with tedious rental laws that work completely in favor of tenants, landlords feel little hesitant to put a property for rent. Simple rental laws will help these landlords to gain more confidence in the legal system and unlock the unoccupied urban properties for people and investors.
4. Easing Tax norms for Real Estate: To fill the exchequer, state governments levy heavy taxes from real estate builders in the form of property taxes and registration values. Even buyers pay a significant amount as stamp duty for real estate properties they purchase. Mr. Anil Mithas says, “Easing tax norms and rules for FDI in the real estate sector will help new companies to enter into the vast market and encourage competition, which will subsequently bring back the lost confidence of consumers in the sector.”
5. Focus on affordable housing: The current government's vision to provide affordable housing to all Indian citizens by 2022, will make the real estate sector once again a promising destination for investment. The government has proposed to construct two crore houses in rural and four crore houses in urban India by the end of 2022. Affordable housing projects will give the Indian middle-class families an opportunity to buy dream homes and bring lots of optimism back into the real estate sector.
Mr. Anil Mithas of Unnati Fortune Group says, “With a stable government at the Centre and controlled inflation rate, property buyers are expecting more reforms in the real estate sector. The government should therefore formulate policies related to infrastructure sector keeping in mind the interest of buyers and end users, and act as a catalyst in the real estate growth.”