A new Government with a clear majority raised optimism in 2014. Nearly 5.45 lakh units launched in the year and nearly 3.43 lakh units sold - previous year saw launch of approx. 4.6 lakh units) and lower sales. Long-term benefits of recent reforms will accrue only with the continuity of their enforcement by this or the next Government.
GST rate cut or not, GST-exempt ready-to-move draws maximum sales. Of total unsold stock of 6.73 lakh units in the top 7 cities, only 13% are ready-to-move-in. Of 5.88 lakh unsold under-construction units, 20% to be completed in 2019 – addition of 1.16 lakh RTM units. Can a marginal tax saving on overpriced properties trigger sentiment revival in delay-tainted under construction segment?
The doomsayers are having a field day with predicting that Brexit will cause the UK real estate market to dry up and blow away. In India, we are quite used to gleeful prophecies of doom regarding real estate and take them with a healthy pinch of salt.
India continues to strive for a more globally-aligned image for urban living conditions, which is what the Smart Cities mission is really all about. However, the primary need if India's housing market is to rank higher on global benchmarks of urban liveability is still a numbers game. Access to quality affordable housing, if 'quality' is primarily defined by location, is still a major challenge for most Indian citizens.
RBI's decision to slash the repo rate by 25 basis point to 6.25 % is a welcome and unexpectedly positive move, given the sops that the recent expansionary budget gave to farmers at an additional cost of Rs 75,000 crore per annum. It was also overdue, as this has been the first cut in a long time. It definitely augurs well for the real estate sector which also received a budget bonanza in the previous week.
The interim budget was more or less a vote bank-facing exercise - an electoral pitch that drew attention to past achievements. Vote-bank directed announcements included benefits to 12-crore small farmers via credit of INR 6k/year directly into their bank accounts, and also to 10 crore labourers by way of direct pension bonanza.
Indians looking to buy homes in 2019 have a very compelling rationale to opt for ready-to-move (RTM) homes, which – apart from being exempt of the 12% GST ambit - are available plentifully.