The last few years have witnessed some major structural and functional changes in India's realty sector. While policies like RERA have no doubt played a crucial role in bringing more transparency, short-term impediments brought forth by regulatory changes have also triggered a temporary slowdown in the sector. However, as India's GDP failed to meet expectations in the first quarter of 2019, the Government instantly took notice and announced a series of economic measures last week for damage control. Primary among these was the reduction in corporate tax rates which was viewed by many pundits as a game-changing move.
Among the host of economic measures announced, two measures, in particular, brought a smile on India's realty sector. First among these was the relaxation of external commercial borrowing (ECB) guidelines under the Prime Minister's affordable housing scheme. And the second was Rs.10,000 crore package for last-mile projects. The moves are expected to fuel demand in the housing sector.
What Do the Consumers say?
As per ANAROCK consumer sentiment survey, ready to move in and mid-segment apartments will drive demand in 2019. They are the first choice for 36% of the home buyers. Further, nearly 24% would prefer investing in a residential property that would be ready within the next six months.
The Rise of Affordable and Mid-Segment Housing
The buyer sentiment in the realty sector seems skewed towards affordable and mid-segment housing. As per the Liases Foras report, more than one-third of the new units launched in the first quarter of 2019 were in the accessible and mid-segment bracket. The reasons behind this include:
1. A boost from a tax reduction on affordable housing and residential projects.
2. GST Rate on affordable housing reduced from 8% to 1%.
3. Increase in scope of affordable housing (carpet area 60 sq. m in metros)
Jaipur and Affordable Housing 2019
Jaipur is touted as one of the key drivers of a rise in the demand for affordable and mid-segment housing. Besides being the capital of India's largest state, it also acts as a counter magnet to the country's capital, New Delhi. The city witnesses a strong influx of foreign tourists due to its famous jewelry market and IT potential. Its population is expected to reach 10 million by 2025, which will further drive demand for affordable, mid-segment, and luxury housing. In fact, Jaipur is a city of preference among foreign property investors. Overall, the realty sector is expected to record substantial growth in the next few quarters. The growth will be driven by the demand for affordable housing among India's middle class. At, KGK Realty, we have envisioned a future where affordable housing is no longer a dream but a reality for one and all. Our residential project The Oasis sets new bars for affordable flats in Jaipur. It offers everyone a chance to own the home of their dreams at budget-friendly prices.