JLL report: RERA and GST boost for Real estate sector! Housing sales to remain strong; check if your city is in top 7 list
As a result of the reform measures, more specifically, RERA and GST, real estate expects more transparency in the sector which in turn will bring back buyers’ confidence.
Housing sales are expected to remain strong despite modest new launches in the country witnessed during the first half of the year (H1 2019), according to the latest JLL report, Residential Market Update – H1 2019, released on June 2. With Hyderabad being on top among the seven cities, the residential real estate market witnessed an increase of 22 per cent in sales at a pan-India level during the period, it said. Interestingly, the share of affordable and mid-income housing (ticket size of up to Rs 10 million in Mumbai and Rs 7.5 million across other cities), has seen an increase up to 58 per cent at the country level, the report added. Pune tops the list, with 91 per cent of the new supply falling in the affordable and mid-income category. The report added, with a gradual revival in homebuyers’ confidence and improved affordability, markets witnessed a resurgence in sales in 2018. The resurgence continued in H1 2019.
Speaking on the findings of the JLL report Ramesh Nair, CEO & Country Head, JLL India said, “Series of reforms and rising buyers’ interest in the segment have propelled the sector to align itself to the market demand. Interestingly, in most cities, home buyers continue to focus on ready to move in projects and projects nearing completion. As a result of this shift in buying preference, developers too are focused on completing their ongoing projects.”
Commenting on the JLL report Siva Krishnan, MD - Residential Services, Developer Solutions and Strategic Consulting said, “Limited number of launches by developers, in a way, is helping the sector to balance the demand-supply scenario in the country. This will act as a cushion and help the sector revive. As a result of the reform measures more specifically RERA and GST, we expect more transparency in the sector which in turn will bring back buyers’ confidence.”
During H1 2019, Hyderabad recorded the highest growth in sales at 65 per cent, followed by Delhi NCR (42 per cent) on a y-o-y basis. In Chennai, sales grew by 24 per cent over H2 2018, however, it is yet to match the levels of H1 2018. According to the report, sales are likely to receive a further fillip with progressive policies of the government. During the first quarter this year, the government further lowered GST rates on affordable homes to 1 per cent from the earlier 8 per cent, without input tax credit (ITC). The GST on projects under construction, which are not under the affordable housing segment, was reduced to 5 per cent from 12 per cent. The rate revision augurs well for homebuyers as the process of claiming the ITC under the former system was complex.