2018-19 Will Be About 'Delivery & Demand' Not 'Demand & Supply'
In a country like India, which enjoys one of the most vibrant demographics in the world, demand is never going to decline
Photo Credit : Reuters
Year 2017 will be hailed as the year that brought about perhaps the most decisive change in India's real estate sector. There is indeed a disruption in the way industry players used to operate. However, there is no second thought that the short-term pain will translate into a long term gain.
The implementation of an overarching Real Estate Regulatory Act (RERA) will have a far-reaching impact on the sector. The act provides for a guiding light to the developer fraternity and safeguards homebuyers' interests.
Today, the market is awash with industry reports that find a substantial fall in new project launches as well as the sales over the past few quarters. Amidst all the brouhaha, there is a silver lining in the cloud - and that is consumer empowerment.
A sector which is currently pegged at approx. US$165 billion and contributes as much as 5-6 percent to the country's GDP could not go much ahead as an unorganized sector. It employs millions of people and the industry players owe the accountability towards people who invest their lifetime savings with them to fulfill their basic necessity for housing.
The provisions of the Act that prohibit diversion of funds by developers and define clear guidelines about registration, development and delivery of projects are indeed going to result in improved buyer sentiment.
The future of real estate sector in India is now dependent on 'demand and delivery' equilibrium and not 'demand and supply'. In a country like India, which enjoys one of the most vibrant demographics in the world, demand is never going to decline.
India is home to about 40 crore millennials, who are born between 1980s and 2000s. These young and ambitious people make for a vibrant workforce that is taking our economy to new heights. What they look for? Affordability and quality of life sits high atop their priorities.
As per industry estimates, more than 25 per cent millennials want to move out from their parental homes to single family homes. To top it off, about over 65 percent of this population will be willing to buy their own homes in the coming 2-5 years. These numbers indicate that there will be at least 6.5 crore people wanting to own residential properties.
That means if the projects are delivered on time, more and more people are going to buy homes. At the same time, the home loan rates are floating at all-time lows and the slowing demand is merely a momentary phase that will be off once the project deliveries get back on track.
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