Real Estate-Year End & Sector Outlook 2018- by Ram Walase, MD & CEO, VBHC

1) Overview: It has been a year of disruptions for the real estate – demonetisation, RERA and GST. The industry is yet to fully recover from the short term effects of the reform measures. It would take about 18-24 months for the industry to recover from the effects of inventory overhang and regulatory interventions. Yet these disruptions are likely to drive the long term metamorphosis of the sector

(2) Challenges: The land prices in urban areas are still higher for developing affordable housing. While RERA brings a lot of clarity with respect to the Developer-Customer relationship, more needs to be done to ensure hassle-free approval processes, land record verifications and stamp duty rationalisation

(3) Opportunity: India’s rapid urbanisation story promises a lot for the sector. Affordable housing segment continues to provide good sales velocities. With RERA and GST, unfair arbitrage has reduced and the organised players have a level playing field

(4) 2018: The current trend of limited new launches and muted price inflation would continue in 2018. The end user demand especially in the affordable housing segment would continue to be the bright spot – primarily driven by PMAY subsidies and the favourable government policies for the segment

Tuesday, December 26, 2017