Understanding the impact of the latest developments
In the past year, some significant developments have shaped up the direction of the real estate sector in India for the coming 2-3 years. The arrival of Goods & Services Tax is among the significant difference makers in this regard. Demonetization will also be among the primary driving factors when it comes to charting a course for the real estate sector. Macroeconomic analysis of parameters such as GST, RERA and demonetization is a must for understanding the future route as well as the state of the real estate sector, as per sites such as https://economictimes.indiatimes.com/wealth/real-estate/6-major-trends-in-indian-real-estate-in-2017/articleshow/57406717.cms.
Most experts and analysts have concluded that there will be a clear-cut distinction between the parts of land developers and aggregators. The new rules and conditions which RERA has imposed will make sure that many of the aggregators of land do not have the set of skills to continue being real estate developers. In the recent past, before the advent of RERA and Demonetization, the line of differentiation between developers and aggregators had blurred to a substantial extent. It is evident that the boundaries are set to be redefined and made more apparent than they used to be.
The fundamental changes that RERA, GST and Demonetization will bring about
- Precise differentiation between collectors of land and real estate developers
- The arrival of equity investments back in the land business and real estate companies
- Increase in the role as well as the impact of smaller markets
- Enhancement in the design and attributes of the new buildings
- More significant compliance with the government rules with regards to safety
The effects of other changes in the industrial sector of the economy
- Increase in development of real estate for industrial and commercial purposes
- Increased efficiency in the management of real estate businesses
- Increased belief in the regulatory mechanisms of the government
- Improvement in the speed at which infrastructure is being built around the country
Analysis of the effects of changes brought about by the significant driving factors
It is a safe conclusion that the businesses in this sector will function as per the dictates of the law. Demonetization will lead to a decrease in the prices of properties. Before this, the developers found it easy to garner illegal profits because of the exponential rise in the prices of properties. Cash dealings also gave rise to a lot of tax avoidance. The government will get its fair share of tax from the real estate transactions.
Making housing more affordable will also be among the significant effects of these changes. The various provisions of RERA will lead to substantial transparency in the real estate dealings. The reality is that many small businesses were not able to find land to set up their business because of the excessive price of real estate. Competitive Exams Coaching Centres also faced problems in finding proper places for their centres in residential areas. But the normalisation of rates will make sure that even the smaller firms get decent opportunities to survive as well as thrive.
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