How do you see Rera going forward?
Rera is the biggest thing to happen in the Indian real estate sector and we hope that it will buyers more confident. Rera will allow demand creation but this may take a while.
The new law will safeguard the interests of every buyer and will allow a transparent and secure route of transactions in the future. Once the act becomes fully functional in each state, grievances will not remain unanswered and will come with a definite solution.
Rera will open more sources of institutional funding for the sector as institutional confidence will also go up in the presence of a regulator. We hope the teething problems in its implementation will surely be addressed by the government as the intentions of the government is clear towards protecting the interests of buyers rather than to strangulate the sector.

How will the GST impact real estate prices?
Prices of properties are all set to go up post-GST implementation. This is because the under construction projects will attract taxes in the slab of 12 per cent as against the previous 4.5 per cent approximately. With absolutely no rebates from stamp duty and other verticals, home buyers are sure to face some burns.
The only respite would be from developers who could judiciously pass on the benefits of input tax credits, if any applicable, to buyers. In the long run, steel prices might come down depending on the 5 per cent slabs, which have been assigned to both coal and iron ore — the main raw materials for steel — and eventually provide extra margin to developers to slash prices.

What about the demand for ready-to-move-in properties?
Ready-to-move-in homes comprise unsold inventory and are primarily in the regions that are still in the advanced stages of development. Such homes have always been the first choice as the buyers prefer to have a look and feel of the property they are willing to purchase.
These homes are available in almost all segments — studio apartments to penthouses — and give a wide range of options to choose from. Also, investors looking for rental gains are very much attracted towards these properties because it starts giving instant returns.
With NCR market witnessing a pickup in demand due to enhanced sentiment, the existing unsold inventory is expected to clear sooner than anticipated earlier.
In the next 30-36 months, the unsold inventory will see a lot of buyers as prices have come down drastically over the last couple of years.

Do you see PMAY (Pradhan Manti Awaz Yojna) and affordable housing contributing timely towards the mission of housing for all by 2022?
As per the latest survey, there is a housing shortage of two crores among the urban poor in the country and an overall shortage of six crores houses.
It is vital to understand that housing for all by 2022 is a bigger term than what is being understood by the common public and there is a lot more to it than just providing houses to everyone.
With various schemes planned under the government’s housing mission, an overall benefit of Rs 1 lakh to Rs 2.30 lakh per beneficiary is assured along with a plan to build two crore houses to meet the housing shortage.
Thus, the government has planned to build more houses, redevelop slums, decrease interest for the poor section, involve the private sector and also aid urban poor for renovating the existing homes.
The PPP model for the development of affordable housing projects could play a crucial role if we desire to meet the target of achieving two crore houses by 2022.
Assistance from the public sector can come from reduced land rates along with subsidised raw material prices, exclusively for the development of affordable housing development. Private sector can work towards the timely implementation, development and delivery.

Reits have become operational and the first notification is just around the corner. How do you see the demand for commercial and residential real estate panning out in the next 18 to 24 months?
Reit as an investment vehicle has a huge opportunity in India. At present, India has a rent-yielding office inventory to the tune of 537 million sq ft valued at around $70 billion. Apart from this, there are other properties like warehousing, malls, shopping centres, school buildings, which are potential assets that can come under Reits.
If there is some activity in the real estate market today, it’s mostly on the back of end-users and start-ups looking for office spaces. The RBI’s decision to allow banks to invest in Reits within the overall umbrella of 20 per cent of their net-owned funds is also a huge positive.
Demand for residential properties is likely to follow the trend, however, commercial properties are sure to attract more demand towards centralised business districts rather than peripheral developments.

With GST and Rera in place now, is the market looking lucrative for FDI?
The infatuated foreign intervention through FDI in Indian realty market and ever-increasing domestic presence of developers has given a boost to the country’s real estate sector over the last couple of decades.
This is going to stimulate the enactment of Rera, which is further bound to make the market more transparent and dealings more polished. Rera has definitely helped ease the scenario to a great extent and has witnessed sentiments improving.
Impact of GST in sync with Rera will transform the Indian realty sector in the next 18-24 months. As a single-tax regime has always been a big hit among the foreign investors, we expect the FDI inflow in real estate to double in the next couple of years and the Reits and InvITs will also see its operations in India very soon.
shishirparasher@mydigitalfc.com

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