The Real Estate (Regulation and Development) Act (RERA), the increase in the exemption period for inventory tax from one to two years and rationalisation of the Goods and Services Tax (GST) rate have boosted sentiment in the real estate sector during the first quarter of 2019, says property consultant Knight Frank’s Sentiment Index Survey for the period.
According to the firm, real estate stakeholders are of the opinion that the transparency brought in by the structural reforms has fundamentally changed the dynamics of the real estate sector for the better, improving both customer and other stakeholders’ sentiment and outlook for the sector.
The rationalisation of the GST rate to 5 per cent for under-construction flats and 1 per cent for the affordable housing sector has also played a significant part in bolstering real estate sentiment for the next six months.
According to the study’s findings, 87 per cent of stakeholders have opined that the sector will see new launches in the next six months, while a substantial 85 per cent have opined that the filtering in the sector with respect to the organised and unorganised developers will positively translate into demand.
Stakeholders also believe that the reduction in the repo rate by 25 basis points is a stimulus that will boost sales and ease liquidity conditions in the sector. Riding on the positive sentiments during the first quarter, future sentiments on price appreciation have also shown some positivity.
Improving from the preceding quarter, a majority of stakeholders have opined that residential prices will either remain in the current range or may even inch higher in the next six months.
“This growth in demand is expected despite the results of the impending elections, demonstrating confidence of the supply side that the structural changes introduced in the last few years will start to show their results in the year forward,” says Shishir Baijal, chairman and managing director, Knight Frank India.