India’s real estate industry is on uptick, thanks to regulations such as Real Estate (Regulation and Development) Act, 2016 (RERA) and the willingness of housing financial institutions to leverage the emerging business transparency in deals.
Demonetisation was aimed to remove the circulation of black money and make transactions more transparent. Although there were difficulties initially while implementing the landmark action, the Narendra Modi government was able to follow it up with a clutch of reforms.
Some of the fly-by-night operators in the realty sector could not survive because of a lack of black money to run their operations and defaulted on delivery promises.
Although there are many housing projects that could not be completed, the government is making moves to protect the interests of buyers by handing over some projects to the public sector National Building Construction Corporation.
It should be noted that following demonetisation 56 lakh additional people have come under the tax net. Cash transactions of home buyers have virtually come to an end.
Although this has resulted in firms facing a cash strapped situation, the reforms have proven to be beneficial both to the developers and home buyers following transparency in transactions.
Regulations like RERA, GST, and legislation banning benami transactions, insolvency and bankruptcy have boosted the confidence of home buyers.
As Surendra Hiranandani, Chairman and Managing Director of House of Hiranandani said transparency and accountability had enhanced significantly for institutional investors due to which they are looking at Indian real estate with renewed interest.
He was quoted as saying that long term market dynamics for the sector is positive, especially in the residential market where prices are likely to remain stable over the coming few months.