Investment in property has been a traditionally favoured form of investment in India. Property is seen both as an emotional and a physical asset. However the past few years has seen a rocky real estate sector due to demonetisation,GST,RERA which resulted in lesser real estate transactions happening. People willing to invest in property in these last few years adopted a ‘wait and watch’ approach before taking a plunge into the real estate market.
Real estate in India underwent a paradigm change beginning with demonetisation which effectively pointed it away from cash transactions as also black money. Demonetisation happened towards the end of CY16, that coupled with the imminent implementation of Real Estate Regulatory Authority (RERA) and Goods & Services Tax (GST) resulted in a major slowdown in real estate sales. It was a domino effect as by the time RERA was in place, it was time for GST to be implemented. So, till July 2017, things were very slow across segments of Indian real estate.
Real estate has been touted to have an advantage over other forms of investments like equities and gold wherein whatever the end use is-self or investor, investment in real estate will reap returns. Investment in real estate in this sense has a dual advantage of-
- Capital gain which means the increase in value of an investment made
- Rental income in cases the buyer does not intend to stay in the property
The above 2 advantages are lacking in the other forms of investment which is why it makes investment in property a favourite for investors.
So why is now the best time to invest?
Industry experts feel that the current scenario is best to enter the property market given the easy availability of home loans, low home loan interest rates, bank recapitalisation ensuring availability of funds for home loans, flexi banks norms for loan sanction, wide array of choices to the buyer due to surplus stock in the market coupled with some really good bargains from developers, among others.
With the unorganised real estate sector becoming much more transparent and accountable with the passing of RERA and the implementation of the new GST regime, this has resulted in many investors returning back to the real estate market. With things in better perspective, potential home buyers are now safely returning back to this sector. These reforms have boosted the real estate sentiment and will enhance the attractiveness of real estate as an asset class for investors. Real estate is fast returning to its position as an ideal option to grow wealth as one can take advantage of historically low equated monthly instalments (EMIs) and create wealth through real estate.
Thus one can safely conclude in the days to come, the real estate sector will see an upward trend resulting in better offers and options for any new home buyer. Affordable housing is another trend that is here to stay with the government pushing hard to achieve its “Housing for All by 2022” vision. By awarding infrastructure status to affordable housing, the government has at best ensured that institutional loans are available to the developers so that the benefit of these schemes trickle down to the targeted group.