Dr Niranjan Hiranandani on Reviving The Real Estate Sector
It is a positive beginning, and we see the potential for lifting real estate to normalcy. The reality is that real estate has been severely impacted by what I refer to as the Tsunamis – reforms that totally changed the paradigm. From Demonetization to implementation of RERA and GST, things have changed for real estate. It impacted buyer sentiment since end-2016, and the impact carries on till the present day.
There is a gradual improvement in home buyer sentiment; but other issues like liquidity crisis have severely impacted real estate developers’ ability to complete projects, resulting in delayed and stalled real estate projects. The situation was negatively impacted by a crisis like the ILFS issue, and the resulting credit squeeze has only worsened the situation vis-à-vis credit issues and liquidity crisis for real estate developers. In this situation, the Hon’ble Finance Minister’s announcement is positive; is welcome. Having said that, the potential it has in terms of the ‘riders’ – not for NCLT or NPA affected delayed and stalled projects – is another major blow. Again, for the segment of delayed projects that can be included, affordable and MIG, it will only be applicable for projects which are 60 per cent completed. Given these aspects, from the potential, it has to actually how many positive results it actually creates is something that remains to be seen. We hope for the best and will look forward to how things work out.
The government, on August 5, 2019, revoked the ‘special status’ granted to the state of Jammu and Kashmir, under Article 370 of the Indian Constitution and also repealed Article 35A. Till now, Jammu and Kashmir was a closed zone, for private investments. Could it have far-reaching implications on the property market in the region. Yes, it will have far-reaching implications on the property market in the region, but it is not that simple. Indians were not allowed to buy land in the state of Jammu and Kashmir; post abrogation of Article 370, this ban has been lifted.
So, the primary issue i.e. the inability of Indians to invest in the real estate market no longer exists. But, for anyone to invest in real estate, there needs to be a proper study in terms of expected RoI as also time it will take for any new such project to ‘break-even’; these are issues which we expect to commence once the formal process of the temporary change of the status to ‘Union Territories’ gets complete, as also Indian laws, including RERA, being implemented in the state. The potential exists, yes, but how long before things actually start moving remains to be seen. The Tourism Department of Maharashtra has announced that it will set up holiday homes in both the new Union Territories, this is a positive ‘first step’, as it will mean buying of land in the Union Territories of Jammu and Kashmir as also Ladakh by Maharashtra Tourism. Obviously, the private sector will follow suit; it is a process that will commence soon – and we should see the impact of the same in due course – and it will definitely have far-reaching implications on the property market in the region.
For more updates on news, articles, features on architecture, and interiors visit: www. fortunestreets.com