July 9, 2018

Why you should be investing in real estate now

2017 was a topsy-turvy ride for the Indian Real Estate Sector, but the year 2018 brings a favorable time for Property Buyers. Let us share with you few reasons as to why you should be investing in real estate right now:

Regulatory Reforms

The real estate market in India has been going through a transformative phase due to a spate of regulatory reforms. The introduction of reforms under the RERA and the Goods and Services Tax (GST) are the catalyst behind this transformative phase. The introduction of RERA has particularly boosted the confidence of consumers, as it is mandatory for the real estate projects to comply with the provisions provided under it. This will ensure that projects are delivered on time, and the money collected from the buyers isn’t diverted for other purposes. The adherence to compliances under RERA will also ensure that only the most-committed real estate developers are able to function in the market.

Large unsold inventory

A combination of high prices, excess supply and low consumption has resulted in huge inventories of real estate remaining unsold across the country. The slump in the market caused by demonetisation coupled with the introduction of RERA has prompted the real estate developers to focus on completing the existing projects and clearing-up the unsold inventories. This can be gauged from the fact that new home launches across top 14 cities India during the first half of 2017 fell to about 58,000 units as per the National Real Estate Development Council (NAREDCO), which is the lowest in the past 5 years (Source). This environment greatly favours the buyers, as there is an excess supply of properties, leaving the home buyers in a better position to negotiate.

Low home loan interest

To curb the presence of excess liquidity in the banking system, the RBI changed the key lending rates. This has resulted in home loan interest to fall to between the ranges of 8.3 to 8.4 percent (Source). This allows people to access low-cost home finance, offering considerable savings on EMIs.

Revival of interest from global investors

The introduction of RERA has instilled a level of confidence in the global investors that wasn’t present before. The real estate sector is expected to receive Private Equity (PE) investments of up to US $4 billion during the fiscal year (Source). This will ensure that the revival of real estate market is on track, which is surely good news for the consumers.

The year 2018 presents an excellent opportunity for those looking to invest in real estate, and the time to make a move is now.

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