A Fillip For The Real Estate Sector


Recently, there was a lull in the real estate sector in 2018 that caused a sharp decline in the sale of residential complexes all over India. However, there has been a recent change in this scenario with sales picking up better than before. Although there are still some encumbrances that will withhold full growth in the first half of 2019, the second half looks more promising as far as getting a fillip for the real estate sector is concerned.

Even though the data for this topic differs from city to city, still there are some trends that are common among all the major 7 cities in India. The case is no different in Kolkata where there has been a tremendous interest for apartments that can be useful for people from all walks of life. This is why the City of Joy has also witnessed a spurt in the construction of real estate complexes that reflects how the real estate sector has become augmented in recent times.

This article explains the changing scenario that exists in the real estate property sector in Kolkata. Here we discuss with you the different trends and developments that have played a major role in shaping this sector giving it its current status. We also provide an analysis of the situation that can help you make the right decision should you decide to invest in property as a personal investment.

Read on to find out the ways in which the real estate sector has received a fillip in recent times. This will hold you in good stead to develop an awareness of this very important topic that will definitely be useful to you.


  • Rise in Prices

Going by data received, we have found that there has been a rise of 1-2 percent in prices for real estate in all the 7 major cities. These cities include the four metro cities plus Bangalore, Hyderabad, and Pune. There has been a marginal rise in prices from Rs. 5490 in 2017 to Rs. 5550 in 2018. The property prices on an average for 2 BHK apartments have remained the same as those of 2017. The most recent research suggests that there will be a plateau in the property prices in 2019 and this data has been obtained from trends that are analyzed from quarter to quarter.


  • Reduction in Bookings


There has been a rise in the sales of property that has reflects the fact that sales have not slowed down. However, there has been a significant reduction in the bookings for under-construction projects that are also called as closures.

The main reason for this is that these projects are subject to GST that as they don’t have a completion certificate. This has led to many home buyers not undertaking any bookings owing to this veritable problem. The resultant consequences are that smaller developers are facing an acute liquidity crunch that makes them vulnerable to ups and downs in the industry.


  • Housing for All

In recent times, the rise in prices has made it difficult for the common man to buy property especially 3 BHK flats that can serve their needs and interests to the maximum. This has led to the move by many builders and developers to provide affordable housing for people from all walks of life. The Government has supported this endeavor by providing sops that were introduced in the year 2018. This is how the supply of residential properties has remained high in spite of so many impediments. This phenomenon has been aptly termed as housing for all as it caters to the needs and requirements of the middle class.

This trend is likely to continue for the coming three years as affordable housing will be very much in demand in the next few years. This basically highlights the opening of a new sector in the economy that was not present earlier. There were a large number of new launches that were present in 2018 and nearly half of these were found in the segment of affordable housing.

Here we also need to mention that there has been a boost of resale units that is also called the secondary sales market. This is especially true for projects that don’t have a completion certificate. This is because those properties that don’t have a completion certificate need you to pay an extra 12 percent for GST. There is a large amount of inventory that has not been sold and extensive efforts have been taken to increase sales and have a higher level of cash flows.

This situation has been especially applicable to the NBFC crisis that has caused a major problem of raising funds that can be utilized for multifarious situations. Even after so many problems, the builders and developers have identified the preference of the buyers to go for flats ready for possession as they do not come under the ambit of GST. Even if they don’t want to, the builders and developers have resorted to collecting the GST for projects under construction that have not been awarded a completion certificate.

This does not augur well for the property buyers as either the prices of the property will increase or there will be a massive reduction in the number of options that are available for the buyers. In spite of these encumbrances, there will be a significant improvement in the sale of secondary properties. There is also a high chance of unsold inventory becoming a burden for these developers as many people would choose to select units that have been exempted from GST.

There was a reduction of housing stock that remained unsold in 2018 as compared to 2017. Many of these projects were for easy possession and they did not have a completion certificate.


  • The Hidden Logistics

Now the commercial properties remained afloat in the entire year of 2018 with a supply of 30 million sq. feet. Moreover, 40-42 million sq. feet of the entire space was well absorbed. The first REIT listing of India is due to be done in 2019. This move will help in pumping liquidity in commercial spaces.  

Most of this investment was done in Tier I cities and the retail sector was identified as a strong contender in this field. The latest research suggests that most of this growth will come up in Tier 2 and Tier 3 cities. This reflects completely the hidden logistics behind this industry.

From the above, it is clear that the real estate sector needs a fillip for more recording more growth and development. This is reflected in the upcoming residential projects in Kolkata. All you need to do is read the above-mentioned points that will help you unravel the secrets of this industry in the best possible way.


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