The slowdown caused by the triple whammy of demonetization and introductions of GST (Goods and Services Taxes) and RERA (Real Estate (Regulation & Development) Act over 2016 and 2017 have had their run, and a resurgence in the realty market is becoming visible. While 2018 saw watered-down returns, the post-election period in 2019 has been witnessing a steady improvement in the sales of properties.
The move by the GST Council to cut tax rates from 8% to 1% on affordable housing, and from 12% to 5% on under-construction housing has resulted in an upswing of interest in the residential realty sector. This move was made with a clear focus on boosting demand for residential properties. It has especially added a fillip to under-construction projects which have been showing lagging interest for many quarters now. The general mood for home buying has also led to a reduction in unsold inventory, resulting in an all-around improvement in the health of the ailing realty sector. A significant reduction of home loan interest rates would further boost sales of apartments.
The rising inventory trend since 2014 has finally been arrested. The lowest levels were attained in 2013 with an inventory of 496,000 units. In comparison, the current inventory stands at around 665,000 units. Over the past two years, average property rates haven’t risen much, hovering at less than a 2% increase. Compared to the cost of other commodities which have witnessed a considerably higher hike in rates, the cost of the property is at a status quo. The first quarter of 2017 saw the rate per square feet standing at rupees 5,480, while the first quarter in 2019, saw a nominal average rise of 5,570 rupees per square feet.
There has been a 16% reduction in inventory across 7 major cities, with a maximum decline of 44% being recorded in Bangalore; Hyderabad comes second with a 21% decline in inventory. Apartments that are near completion or are ready-to-move-in are witnessing greater demand. Another trend is that affordable to mid-income homes are seeing greater sales.
For those people who have been sitting on the fence till now, this is the right time to invest in property. With a stable government at the Center, buyer confidence is at a high, further hiking sales. Prestigious builders like Fortius Infra have a number of ready-to-move-in apartments in Krishnarajapuram area of Bangalore called ‘Fortius Waterscape’. And for those who prefer villa homes, check out the luxurious ‘Under the Sun’ villas located in a fruiting orchard in Devanahalli, Bangalore. Get more information here: https://www.underthesun.co.in