The real estate industry is still negative due to the ambiguity over the policy issues over the two massive reforms this year, the real estate regulatory Act (RERA) and goods and services tax (GST). Because of this, home buyers are still in the state of wait-and-watch and the sentiments in the real estate industry going in the negative trend in April to June in this year, as revealed in a survey done by the Knight Frank India, FICCI, and NAREDCO where FICCI-NAREDCO-Knight Frank India unveiled the findings of the Real Estate Sentiment Index for Q2 2017
However, the experts believe that the sentiments are expected to become positive in the coming years though not bullish. The stakeholders need clarity on their doubts relating to the policy issues. According to the legal news, the clarity is expected to come in the time span of the next few months. The study believes that the stakeholders believe that in the months to come, the country’s economic condition will be in a better position and will hence become more transparent. This transparency, along with the special status given to affordable housing, an initiative by the government, will prove beneficial and will surely ease the flow of institutional funds into the sector at a viable rate.
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Currently, the market news says that the new launch of the housing projects has come to a stand-still, and the builders are focusing on completing their ongoing projects or on understanding and adhering to the new RERA and GST guidelines.
The study has revealed that 68% of the respondents believe that the new launches of the housing projects will be better in the next six months. Such positive feedback comes due to the onset of the festival season and expected clarity on policy issues. But at the same time, the same set of respondents feel that it will take time for buyers to come back to the market as they have been the sufferers of the delay in the date of delivery of the housing project or a complete non-delivery along with many other litigations.
The study also highlighted that about 59% of the respondents believe that the home prices will increase in the coming six months. The feel so due to the increase in compliance costs due to the implementation of new policies.
Samantak Das, chief economist and national director-research, Knight Frank India, conveys that the current sentiments are down, but the future is certainly bright in the housing projects market. He added that the success for this sector lies in the proper implementation of government schemes by the respective states.
Talking about office real estate, the study says, about 64% of the stakeholders believe that new office supply will remain a challenge in the next six months. This is due to project delays and a lack of quality office space in key locations.
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