Prestige Neptune Courtyard

The year 2017 has been the most eventful period for the Indian Real Estate sector with new regulations and policy changes, following demonetization, roll out of RERA, Benami Transaction Prohibition, REITS, and GST. All of these have had a cascading impact on the real estate market, which experienced a slowdown for several months. However, it is anticipated that the new policies will help the industry become more organized, transparent, and accountable, which will boost buyer sentiment in both residential and commercial segments.

Presenting here are the views of some renowned real estate developers on the year that was, and their outlook for 2018. It is heartening to see that they are unanimous in their view that the consolidation of the major reforms will see a remarkable transformation in the real estate sector.

Mr. Irfan Razack, CMD, Prestige Group

Irfan Razack, CMD, Prestige Group
Last year, GST and RERA played a very significant role in redefining real estate in India. Both Bills were introduced in 2017, which resulted in the modification of several rules/regulations related to the real estate and construction industries. After GST was implemented, we also had to realign the financial structure and understand how to execute new launches, keeping in line with the new laws. Hence, a lot of time was spent in understanding the legal implications of all these changes. As a result, no new products came into the market in terms of new launches, but we had satisfactory sales from our existing inventory. From that aspect, I think we have done very well as a company.

While the market witnessed some turmoil, with several developers extending offers and schemes to ensure sales, at Prestige, we managed to meet our sales targets by selling from the current inventory that was under production. Looking back, 2017, I feel, turned out to be a brilliant year for the company.

In April 2017, we restructured the company by segregating the retail, residential, office and hospitality portfolios into 4 separate segments. This helped us look at the business from a different perspective. We intend to scale these segments over time. We are also exploring new cities and hope to be in the west and north by the end of 2018.

The residential real estate market has picked up pace as demand is growing steadily. I think that the long-term impact of the recent economic reforms will only add to the growing enthusiasm and positive outlook for real estate in India. With rapid urbanization, the demand for housing in the affordable and mid-income group segments has always seen an upward growth trajectory. As long as developers are able to produce homes between Rs. 25 lakhs to Rs 100 lakhs, there will always be a constant demand.

Going forward, factors like rapid urbanization, increased migration to cosmopolitan and Tier 1 cities, and the Government’s focus on infrastructure and affordable housing will give the required impetus and push to the real estate sector.

In fact, the demand for commercial space is seen as a litmus test for the overall health of the economy. With businesses flourishing globally and several processes getting outsourced to India, the absorption of commercial space is on the rise. We have near zero vacancy in our office developments. We are launching 2-3 large-scale IT developments in Bangalore, and simultaneously, we will be developing an IT Park in Pune and an office building in Gift City.

Retail malls have been doing extremely good business. In the retail space, we will be opening the Mysore Centre City Mall in January. Forum Prestige Shantiniketan in Whitefield is expected to be ready in the second quarter of 2018. Both our hospitality projects: The Sheraton Grand and The Conrad will start operations from February.

Mr. Samyak Jain, Director, Siddha Group

Samyak Jain, Director, Siddha Group
Here, we will review a series of landmark reforms that the country witnessed during 2017. Demonetization made a huge impact on various sectors, including the real estate industry. It has brought about transparency in transactions, which has helped to strengthen the relationship between developers and buyers. It brought about an increase in fund inflows in the banking sector, forcing RBI to cut rates twice, and eventually leading to a reduction in home loan rates.

As India adjusted to demonetization, the government provided some relief in the Union Budget 2017-18 by granting infrastructure status to the affordable housing sector, showing its intention to make ‘Housing for All by 2022’ a reality. The status grant came with a plethora of benefits to developers such as availability of prime land parcels, access to funds, along with faster approval, thereby incentivizing them to develop affordable housing projects. The government also liberalized FDI rules making it easier for NRIs and foreign investors to purchase properties in the country, and facilitate the generation of foreign exchange for infrastructure developments and strengthen the nation’s economy.

The implementation of RERA brought in the much-needed transparency and initially infused accountability in the sector. There was ambiguity about the Act and the registration processes, but as time went by, it brought more clarity in the system. The Act has not only encapsulated the interests of the home buyers, but has also ensured speedy redressal of disputes, which has helped gain confidence amongst the consumers.

The Act consists of a registration mandate, and strong penalties to ensure that the home buyers feel secure about their investments, which has further helped to enhance the residential sales. The introduction of GST in July 2017 aimed to dismantle the multiple tax system and make way for ‘One Nation One Tax’. The GST rate for real estate has been fixed at 12 percent. In the near future, there will be more clarity on GST and we will be able to assess the new taxation system.

However, we feel that GST will prove beneficial for the real estate as well as for the general economy in India. The domestic and foreign investor’s sentiments were escalated with a jump in India’s rank by 30 spots to secure a place among the top 100 countries on World Bank’s ease of doing business ranking list. This is quite an achievement. The real estate market has largely benefitted from the cumulative effect of these reforms, which will help propel growth of the sector, going forward.

siddha sky beliaghata kolkata

In 2018, the expectations of the buyers and developers will rise as the sector has witnessed new government policies. The amalgamation of these policies will help the industry to be more organized and provide a boost to both residential and commercial segments. The country’s first maiden Real Estate Investment Trust (REIT) is expected to be launched in the first quarter of 2018. This would go a long way in bringinging further tranperancy in real estate and help in curbing benami transactions. Very soon, the Housing Industry Regulation Act (HIRA) will be implemented in West Bengal, and we believe that the real estate market dynamics will improve further, making deals more transparent and fairer to the buyers.

The volume of online transactions just a year after demonetization has increased manifold. Digitization has paved the way for an organized approach in terms of purchasing property, land acquisition, ownership records and documentation, and has significantly improved the ease of doing business in the sector. With the consolidation of these reforms there is a bright future in store for the real estate sector, and it will see a remarkable transformation in the long run.

SARE Heights night view

Mr. Vineet Relia, MD, SARE Homes

Vineet Relia, MD, SARE Homes
There have been various policies implemented in 2017 that have impacted the real estate market to a great extent. With the coming of RERA and GST, the realty market witnessed a tumultuous change, but it will be all for the better in the coming time. Apart from this, the reduction in circle rates twice in 2017, has led to lowering of the costs which would boost the sector in 2018. However, the realty market is recovering gradually post implementation of RERA and GST, therefore, we are positive of an increase in sales and decline in unsold inventory. 2018 may witness new launches as well but most of the developers will focus on completing their under-construction projects. Moreover, there is need for more clarity on GST as it will lead to more transparency in the sector.

Mr. Harinder Dhillon, VP - Sales, DLF

Harinder Dhillon, VP - Sales, DLF
The year 2017 can be regarded as a watershed year for the real estate sector due to the implementation of Real Estate Regulation and Development Act (RERA), and the Goods and Services Tax (GST). 2018 is the perfect time to invest in real estate as these legislations have heralded transparency and accountability in the sector. Home loan rates are at an all-time low, and are expected to remain low in the near future as well. This implies considerable savings in the EMI costs that will enable home buyer’s to avail low-cost home finance and fulfill their dream of owning a home.”

DLF Project

Shri P.N.Misra, CMD, Paarth Infrabuild Pvt. Ltd.

P.N.Misra, CMD, Paarth Infrabuild Pvt. Ltd.
The year 2017 was marked by GST and RERA. The twin policies, along with the lingering effects of demonetisation, had an adverse impact, in the short run, on real estate sales and overall economy. However, they also brought about consolidation and transparency in the sector. We are hopeful that the Budget, after granting infrastructure status to affordable housing, will also spread this benefit to the entire real estate sector. Besides, considering the cost of homes in cities, the rebate on home loans must be increased and tax exemptions be given. On the supply side, the government must incentivize builders to undertake more projects in the affordable housing segment.

PMAY provides that if a private developer on his own land, promotes affordable housing, then the allottee should get all the benefits prescribed in the scheme. However, other segments like grants to individual houses in un-planned settlements, and grants to local bodies in upgrading the units are considered and local bodies are made to promote such projects, the main area being affordable housing, which may boost the supply line in the housing market. The resources of the vast workplace of disciplined private developers need to be better utilized by making the process liberal and free from bureaucratic complexities.

Presently, the complete absence of the private sector from this segment is a worrying sign. The real estate creates a multiplier effect on the economy, and for the economy to create jobs, the real estate sector must take the lead.

Ms. Anita Arjundas, MD, Mahindra Lifespace Developers

Anita Arjundas, MD, Mahindra Lifespace Developers
The recently concluded year was a watershed period for Indian real estate due to implementation of game-changing policies such as the Real Estate (Regulation and Development) Act, 2016 (RERA), and the resulting need for realignment by all stakeholders to a brand new regulatory environment. Additionally, GST occupied bandwidth to set in place mechanisms for smooth adoption while dealing with the impact of an increase in price for under construction projects, even after passing on Input Tax Credit (ITC) benefits.

Recent months have witnessed sustained demand in end-user-driven markets and is now back to pre-demonetisation levels, while speculative buying, especially in the luxury segment, has declined sharply. Furthermore, there has been significant FDI equity inflow into construction development, an indicator of rising confidence in the sector and the India growth story.

As India’s real estate sector makes the transition towards increased transparency, structured and stakeholder-friendly marketplace, 2018 could well mark the beginning of a period of sustained revival for the sector. Regulated and organised realty is a healthy and sustainable asset class globally; In India, structural reforms and changes in FDI norms are making real estate increasingly attractive to domestic and foreign investors.

The awarding of vital ‘infrastructure’ status for affordable housing will show positive results in the months ahead. Additionally, we feel that the affordable housing segment will further strengthen its position as a key growth driver of the real estate sector in 2018 since unit sales and launches will increasingly be dominated by the sub-50-lakh category.

Mahindra Life Space

Mr. Tushad Dubash, Director, Duville Estates

Tushad Dubash, Director, Duville Estates
The implementation of RERA and GST has led to a positive change in the Indian real estate sector. These reforms foster transparency in communication and an assurance of delivery, and by doing so they not only build domestic consumer confidence but also create an environment conducive to foreign investment. Owing to its economic growth and rapidly developing infrastructure, Pune’s real estate market has been performing much better than many other major cities. Included in the ‘100 Smart Cities’ list, Pune is gaining increased importance on the back of the implied infrastructure.

Pune’s residential property market will remain positive, and areas that offer better affordability and returns on investment will pick up. IT/ITeS continue to be the key demand driver for residential real estate in Pune; the Kharadi micro market is a strong example of this. Technology will play a key role as residential developers explore newer ways to optimize space utilization within their projects. The proposed plan for the development of Pune Metro will impact prominent areas on the city’s CBD belt along with areas of Hinjewadi, Aundh, Pimpri-Chinchwad, Kharadi and Viman Nagar. As 2018 kicks off, developers and consumers alike will have grown accustomed to the new industry landscape created by GST and RERA, and it will be interesting to see the positive impact that this will have on the industry in the year ahead.

Mr. Rahul Singla, Director, Mapsko Group

Rahul Singla, Director, Mapsko Group
The year 2017 has been good for the real estate fraternity: with this, 2018 is going to be the best time to invest in this sector. The developers will take active interest and buyers will have huge range of properties to choose from and purchase. Demonetisation, which was done to crack down on black money, was finally proved to be beneficial for the segment in 2017; hence it will bring better economy to the country.

GST will bring a lot of transparency in the real estate sector and minimize unscrupulous transactions in 2018. RERA, whose main function is to bring accountability in the sector by streamlining the entire process, is not going to have much of the effect on the organised sector, but the unorganized sector is going to face problems relating to it. Ready-to-move–in apartments are going to earn extra interest from the buyers as these save the construction timing and are the best option for them. The future is bright as the market is expected to pick up and continue like this.

Mapsko Group

Mr. Ravish Kapoor, Director, Elan Group

Ravish Kapoor, Director, Elan Group
Year 2017 brought much revival for the real estate industry. By introducing regulations like RERA, Benami Transaction Prohibition, REITS, and GST there is a long-term industrial growth and it also impacts on ease of doing business by bringing transparency at work. On the demand side, office space requirements of sectors such as manufacturing, logistics, FMCG, etc., showed positive signs, and we expect this to continue in the times ahead. Many malls, which were to be completed in 2017, were completed in the year and many more are to be developed in the coming time.

Many developers and private equity players are also partnering with developers active in this space to earn more profit in the sector. We believe that the Indian real estate sector will emerge stronger, healthier and capable of sustained growth.

Mr. Pankaj Bansal, Director, M3M Group

Pankaj Bansal, Director, M3M Group
With improved ease of doing business rankings, enhanced political stability and economy expected to regain its momentum, the overall investment climate in India is expected to substantially improve in 2018. The year 2017 saw multiple policy interventions like RERA, etc. and we expect the regulatory environment to become stable during 2018. Interest rates have already moderated and are expected to come down further, making the cost of borrowing cheaper for buyers as well as developers. Given all these factors, we believe that the outlook for Real Estate for the year 2018 is positive, and it will be a good time to invest in real estate.

M3M Project

Mr. Sumit Berry, MD, BDI Group

Sumit Berry, MD, BDI Group
Like any other sector the real estate segment also experienced many ups and down in 2017. Some of the biggest game-changing policies like GST and RERA were implemented, which aim at bringing transparency and accountability in the sector. Clarity on the applicable GST rate for the real estate sector is still expected in 2018. We can say that in the long term, both RERA and GST will bring smiles on the face of the developer as well as for the home buyer.

Affordable housing finally got the much-coveted infrastructure status. One crore houses are to be built in rural India by 2019, and this vital segment will now see cheaper sources of finance, which will give further boost to the sector. The country’s real estate markets are definitely poised for growth in the medium-to-long term on the back of higher transparency and further consolidation. The demonetization move along with the Benami Transactions Act, proved to be profitable to the entire segment.

Mr. Vineet Taing, President, Vatika Business Centre

Vineet Taing, President, Vatika Business Centre
2017 has been a landmark year both for the Indian Economy and the Indian Real Estate. Policies such as RERA & GST have ushered in transparency and stroked confidence among buyers. Talking specifically about the Commercial Realty segment, co-working spaces and business centres have become the preferred choice in a short span of time, thanks to the rapid urbanization. Across the country, co-working spaces and business centres have been in great demand with freelancers, startups and small and medium businesses flocking there for the amenities, prices, flexibility and networking opportunities.

Another interesting industry trend that’s been observed is office occupiers in Gurgaon are pre-committing office spaces in under-construction, especially in central business districts of Gurgaon, to secure themselves against high or rising future rentals. For the year 2018, the tidal growth for office spaces will continue as larger corporates and smaller companies are increasingly opting for co-working spaces.

Mr. Gaurav Mittal, MD, CHD Developers Ltd

Gaurav Mittal, MD, CHD Developers Ltd
Recent government initiatives including RERA, GST along with Real Estate Investment Trusts (REITs) will help improve transparency in the long run and thus increase buyer confidence in the sector. With the overall market moving towards ease of doing business, we can expect potential buyers (end-users) to take a relook of the market for investment opportunities. Having less project launches and uniform absorption will lead to increase in demand, and thereby, improve the sector in 2018.

2018 will also be the year of affordable housing. Since the market is consumer friendly, buyers will tend to invest in the affordable housing segment owing to greater options at affordable prices and good investment returns with time bound possession. The loan interest rates are low, making banks more supportive and thereby encouraging the buyer to invest. We believe that the long-term market dynamics for the sector will remain positive, especially in the residential market.


Mr. Ram Walase, MD & CEO, VBHC

Ram Walase, MD & CEO, VBHC
2017 has been a year of disruptions for the real estate – demonetization, 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.

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 rationalization.

India’s rapid urbanization story promises a lot for the sector and the Affordable Housing segment continues to provide good sales velocities. With RERA and GST, unfair arbitrage has reduced, and the organized players have a level playing field

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 favorable government policies for the segment.
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