Measures that would Boost Property Market
May 17, 2017 Real Estate News
Home buyers have always been victimised by the unscrupulous practices and lack of transparency in the real estate sector. But this year government has taken certain measures that can change the scenario. These measures are not only aimed at tackling black money but will also bring back much needed transparency and confidence in the real estate market.
Real Estate Regulation Act (RERA) and its impact:
The real estate market has always been dominated by the developers and all the transaction happens by keeping in mind the benefit of the developers only. But with the introduction of RERA, the scenario is going to be a tad too different. The transaction between the seller and the buyer of real estate will be more equitable and fair, especially in the primary market.
However, since the State Governments have been asked to postulate their own set of rules, it is hoped that they do not dilute the powers in the act when they introduce their respective state’s regulations.
Benami Transactions (Prohibition) Amendment Act 2016
The Benami Transactions (Prohibition) Amendment Act, 2016, is an initiative by the government to strengthen the earlier Benami Transactions (Prohibition) Act, 1988 as well as to crack down on property ownerships, where the source of income is not known. According to this Act, all Benami transactions are prohibited. And the ones that have already been constructed with Benami ownership will have to pay heavy penalties. This Act has been formulated to create a sense of trust in the minds of end-users.
The affordable housing sector is going to advantage the most. Even the developer will not run into the risk of selling to speculative investors involving Benami transaction. Actually, this would lead to the real success for an affordable housing developer because the customers can shift into the completed project.
Demonetization of Rs 500 and Rs 1,000 currency notes
Despite all the disruption it has brought, the real estate fraternity has unanimously welcomed this move by the government to demonetise existing 500 and 1,000 rupee notes.
There is no doubt about it that this move has created a major slowdown in the market for the first few months, due to reduced liquidity in the market. Land transactions, secondary sales of homes and the commercial segment have also witnessed a significant negative impact.
However, all those who are associated with the real estate sector are expecting that in due course of time demonetization will positively impact high-value transactions in the real estate sector by brushing away black money from the market. But the real estate analysers are presuming that certain areas like the affordable housing segment, where the value of homes is largely in the range of Rs 10 lakhs to Rs 20 lakhs, is not likely to be impacted.
The main objective behind taking these measures by the government is to bring the much needed corporate governance to our industry. These measures will not only eliminate unscrupulous market participants but will also encourage international investors and developers to invest in Indian market. Indian developers with a good track record are expected to benefit immensely as well. The sales are also expected to increase with the expected decrease in interest rates.
Real Estate Regulation Act (RERA) and its impact:
The real estate market has always been dominated by the developers and all the transaction happens by keeping in mind the benefit of the developers only. But with the introduction of RERA, the scenario is going to be a tad too different. The transaction between the seller and the buyer of real estate will be more equitable and fair, especially in the primary market.
However, since the State Governments have been asked to postulate their own set of rules, it is hoped that they do not dilute the powers in the act when they introduce their respective state’s regulations.
Benami Transactions (Prohibition) Amendment Act 2016
The Benami Transactions (Prohibition) Amendment Act, 2016, is an initiative by the government to strengthen the earlier Benami Transactions (Prohibition) Act, 1988 as well as to crack down on property ownerships, where the source of income is not known. According to this Act, all Benami transactions are prohibited. And the ones that have already been constructed with Benami ownership will have to pay heavy penalties. This Act has been formulated to create a sense of trust in the minds of end-users.
The affordable housing sector is going to advantage the most. Even the developer will not run into the risk of selling to speculative investors involving Benami transaction. Actually, this would lead to the real success for an affordable housing developer because the customers can shift into the completed project.
Demonetization of Rs 500 and Rs 1,000 currency notes
Despite all the disruption it has brought, the real estate fraternity has unanimously welcomed this move by the government to demonetise existing 500 and 1,000 rupee notes.
There is no doubt about it that this move has created a major slowdown in the market for the first few months, due to reduced liquidity in the market. Land transactions, secondary sales of homes and the commercial segment have also witnessed a significant negative impact.
However, all those who are associated with the real estate sector are expecting that in due course of time demonetization will positively impact high-value transactions in the real estate sector by brushing away black money from the market. But the real estate analysers are presuming that certain areas like the affordable housing segment, where the value of homes is largely in the range of Rs 10 lakhs to Rs 20 lakhs, is not likely to be impacted.
The main objective behind taking these measures by the government is to bring the much needed corporate governance to our industry. These measures will not only eliminate unscrupulous market participants but will also encourage international investors and developers to invest in Indian market. Indian developers with a good track record are expected to benefit immensely as well. The sales are also expected to increase with the expected decrease in interest rates.
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