The real estate sector is a golden goose and everyone is interested in its growth and development for their own benefit. For a property owner, the cost of property goes up from year to year due to general economic development and it can fetch substantial higher price when sold over time. For the government, it is a money spinner in the form of income from stamp duty and registration charges. It is also an income earner to the local bodies when construction plan is approved, and by way of property tax when the construction is completed. Capital gains attract tax when the property is sold after years of development. In view of all this, the various stakeholders in the sector are all interested in attracting the consumer. Let us look into some of the future and continuing roles of these stakeholders.
Land/site owner
Rural landholders and site holders in semi-urban, urban and metros convert agricultural lands for non-agricultural purposes by making use of the government’s ‘housing for all’ programme. They also await opportunities like opening of highways, metro rail, industrial projects, and housing colonies which will automatically increase the cost of land and plots.
Developer-builder
The developers-builders try to cash in on the demand for new houses/apartments and office space, especially in tier-1 and -II cities. Builders offer incentives like lower upfront payment, buy back proposals after a pre-determined period etc.
Government and legal system
Apart from existing regulations, the government’s anti-corruption/anti-black money steps such as demonetisation, and abolition of benami transactions, and new regulations like parking facility certificates for registration of new vehicles may pose restrictions on property development. The effect of Goods and Services Tax (GST) on the property sector also need to be fully known. Changes in tax exemptions in the next Union Budget can also have its impact.
The judiciary is likely to view the delays and disputes between builders and buyers very seriously as can be seen from some judgments of courts in the last year or so. The Real Estate Regulator may also act as a centre of control.
Lenders
Banks, especially large lenders like SBI and ICICI Bank, have started offering full concessions arising out of reduced interest rates by the RBI.
Waiver of processing fees / switching charges may continue.
A mixed bag
The real estate sector may face new challenges in the future. While the demand will continue, the cost may not come down.
Enforcement of legal requirements may turn out to be tough. Bank loans may probably get cheaper. If tax exemptions go up in the coming Union Budget, home buyers will be happy.
