Six Big Expectations from Real Estate Sector in 2018

May 25th, 2018

Top 10 Builders and Developers in Bangalore

The RERA Act which was passed in 2016 and came into complete effect in 2017 has definitely set things in motion as far as real estate is concerned. In fact, it has set a very different yet a positive tone for the sector. Experts believe that the reforms and changes brought in via the RERA Act will redefine the real estate sector in India for the better.
As the impact of the RERA Act and other reforms spill over from the previous year into 2018, here are six big expectations from the sector –

Increased buyer sentiment: This year predicts a big turnaround and big scope for an increased buyer sentiment. Thanks largely to the RERA Act, the buyer now has enough right not only on the quality of the property but can even question the builder on the timelines to deliver the property. The buyer also benefits in terms of the advance amount that needs to be paid for the purchase as the amount is moderated as per the act. Buyers are also positive on builders adhering to the rules on development as stipulated by the act and therefore, are more likely to invest in property purchases.

Developers’ renewed focus: From the developers’ perspective, things are very clear – adhere to the rules and there is no trouble. So, this year the more serious and genuine developers will have no issues expanding their business and in fact a large number of developers will approach this year with a renewed focus.

One of the first things they will do is to clear the huge unsold inventory as not doing so will create higher amount of locked-up capital and will also bring down the image of the developer.

Developers will also go in for new projects since there is more connect and trust between buyers and builders established all thanks to the RERA Act. This year developers will hope to have lesser inventory and higher sales volumes which in turn will increase their liquidity and profitability.

Entry of FDI: For long, the Indian real estate market has awaited the entry of Foreign Direct Investment (FDI). Experts believe that this year will initiate the flow of funds from foreign investors mainly because the real estate sector has been regulated and there is growing transparency levels within the sector. The foreign investments are more likely to happen in the residential real estate sector owing to the growing need for housing requirements in the country.

Two main advantages of FDI in the sector will be – the revival of some of the existing players whose growth has been on decline and the knowledge and know-how of real estate that will change the landscape of the sector for the better.

‘’As we move into 2018, India’s Real Estate sector will continue to see robust activity. Despite disruptions and growing prominence of new formats, the country’s office segment will witness stable demand.’’ – CBRE

Corrected property values: Owing to the rules and regulations of the RERA Act developers will be more clear and transparent on the property values. This in turn will
encourage buyers to have higher trust levels with developers and go for in purchases. This ‘give and take’ scenario will lead to corrected property values which will directly
lead to increased sales volumes and overall benefit for those developers who price their properties fairly.

Better returns: A transparent and trustful relationship between the buyers and sellers will lead to healthier market practices and a more beneficial market. From the buyers’ perspective they will have a better ROI, all thanks to corrected property values, timely delivery and better-quality deliverable. From the developers’ or the sellers’ perspective,
a better buyer sentiment will facilitate quicker sale of properties leading to lower inventories and higher volumes, all of which will bring in much better returns.

Better market: The reforms and the developments of the last couple of years is more than likely to influence the real estate market for the better in the year 2018. To begin with, a healthier and trustable relationship between buyers and sellers will ensure lesser bottlenecks. Transparency will bring in renewed responsibility and accountability of developers that will lead to timely delivery of quality properties. This in turn will help buyers regain trust and reaffirm their support which will lead to further growth of the sector.

Add to that, infrastructural developments such as roads and highways, urbanisation and focus on affordable housing which will have a huge and positive impact on the growth of the real estate market in the country.

For a few years now, the real estate sector has seen more downs than ups due to several reasons. Experts believe that the year 2018 will bring in a new shift for the real estate sector even as initiatives such as the RERA Act, Infrastructural developments, Urbanisation and Affordable housing will more than likely renew and revamp the sector for the better. The expectations are big as we progress through the year and all stakeholders from buyers to developers and investors will hope that this year will initiate a fresh chapter in the real estate history of India.

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