The implementation of RERA was initially met with skepticism and an accumulation of unsold inventory, which caused a gap in market growth. What added to the distress was the fact that demonetization had already weakened the purchasing power of home buyers and investors during that period. Moreover, reforms such as Goods and Service Tax (GST), Insolvency and Bankruptcy Code and Benami Properties (Prevention Act) did not help the situation either.
However, despite all the concerns, the third quarter of the financial year 2018 saw the Indian real estate market register a surprising change.
What was the change in numbers?
While advancing towards the last quarter of the financial year, the real estate market in India, especially in the residential sector was exposed towards a positive sign of recovery. As per recent reports by JLL India, the residential real estate market across several cities within the nation recorded a 40% surge in sales by the end of the 2018.
Major metropolises including Delhi NCR, Pune and Bangalore reflected a hike in the number of bookings. Hyderabad and Kolkata stood out in terms of growth performance, with 277% and 300% growth rates respectively.
How did it happen?
Despite facing some challenges initially, reforms like RERA and GST have helped to bring the stability in product pricing, timely delivery of products and more importantly alignment across the industry as a whole. All these factors in turn have boosted the confidence of buyers in the market, thus providing developers an improved confidence to launch new projects.
As per the reports, there is no dilly-dallying amongst buyers with regards to property buying decisions, a fact which spells a ‘big positive’. The Indian real estate has forecasted to exhibit further growth and gains in the coming years.
Interim Budget Gives Tax Benefits to Boost Real Estate Sector
During the Interim Budget 2019-20, Honorable Finance Minister stated that the foundation of India’s growth and developments had been laid. Some of the key highlights for real estate sector in the Interim Budget 2019-20, presented in Parliament, are as follows:
• Exemption from levy of tax on notional rent, on unsold inventories, from one year has now been extended to two years.
• Two houses can be purchased from sale of one house to save capital gains tax.
• Benefit of self-occupied property is now extended to two houses, if it is not let out.
• Threshold for TDS for rental income rose from Rs. 1.80 lakh to Rs 2.4 lakh.