India is on a brink of a new era, with fresh foreign investment rules, RERA and the emerging Smart Cities all summing up to an aspiring 2017 for the realty sector, says Manju Yagnik - Vice Chairperson, Nahar Group.
Is 'infra' status for affordable housing enough to spur investments?
The government has expressed the vision of 'Housing for all' by 2022, so in that sense the budget showcases a long-term vision. We are hoping that the government should articulate action plans that would follow their expressed intent. It was vastly anticipated that the budget would arrive at correcting the market drawbacks as a whole. However the mid-segment, which is the largest, seems to have been ignored, leaving little room for property prices to be within reach of the common man, and would remain high compared to the average income of individuals. The tax relief given to developers who are constructing inventory less than 30 sq mt per unit to around 40 sq mt doesn't help much either, since most buyers looking for houses ranging from 350-450 sq ft carpet area are from the mid-income segment, in metros or even Tier-II cities. Hence this does not provide any boost in terms of end-user sentiments.
How will infra status help in bankability?
The infrastructure sector of the Indian economy still continues to be one of the priorities pushing the economy to the progressive course. Given the budget announced that most documentation will go digital and that there can be clearances and approvals within 60 days, we are expecting the timelines including online clearances for new infrastructure projects to improve. Tax exemption limit going up after the budget will reduce multiple tax loading and encourage investments in affordable homes.
How would you describe 2016 in terms of the impact on the realty housing sector?
The year 2016 will indeed be marked in the chronicles of the real estate sector as being a cornerstone, giving shape to an emerging and more dynamic realty sector in India. This drive has come from the government introducing new policies that will shape the future and chart the course of the sector, going forward.
What are your expectations for year 2017?
India is on a brink of a new era, with foreign investment rules, RERA and the emerging Smart Cities all summing up to an aspiring 2017 for the realty sector. With such initiatives taken by the government, we perceive a more level playing field for well-known and reputed realty brands. This will improve market sentiments and increase homebuyer confidence within the industry. It will also make it more attractive as an industry to invest in, given higher transparency levels and ethical business practiced by various stakeholders. We also foresee more investments by FIIs and foreign investors as well as NRIs who will be happy to invest in properties back home. We look forward to seeing more government participation in incentivising commercial property development. The government should look at offering incentives for developers to construct more commercial spaces as it will help in attracting foreign investments and amplify India as a business powerhouse.
Growth of commercial property directly results in demand for the residential, retail and hospitality sectors. This bodes well for the entire property market.