After constructive action on the policy front in an otherwise dull 2015, real estate developers are pinning their hopes on the passage of the Real Estate (Regulation and Development) Bill and expect sentiment to perk up in the market.
The long-awaited Bill, which aims to protect buyer interests, had gone to a Select Committee of Parliament that has recommended changes.
The Ministry of Housing and Urban Poverty Alleviation has accepted these changes, after which the Cabinet gave its approval on December 9 with further amendments. However, the Bill could not be passed in the recently concluded winter session of Parliament.
Developers also expect schemes such as smart cities, Atal Mission for Rejuvenation and Urban Transformation, Housing for All by 2022, apart from easing and simplification of foreign direct investment (FDI) rules in the construction sector, to create a positive ripple effect in 2016.
SARE Homes Managing Director Vineet Relia said: “The smart cities mission is going to be a future growth centre for the sector and we hope that the government seed funding can leverage further investment.”
Investor confidence The year 2016 is likely to begin on a cheerful note on the back of reforms and increased investor confidence, said Sanjay Dutt, Managing Director, India, Cushman & Wakefield. “The government’s easing of FDI policy, the probable implementation of the Real Estate Bill and smart cities plan, and the introduction of real estate investment trusts (REITs) will bring in transparency and enhance investor confidence in the coming years,” he added.
Developers also believe that markets will improve in the coming year as a reduced rate of interest has led to an increase in consumer confidence. “While supernormal appreciation in real estate is a thing of the past, overall growth could hover between 7 and 14 per cent,” Samantak Das, Chief Economist & National Director, Research, Knight Frank India, had told BusinessLine ahead of the launch of the second edition of its Residential Investment Advisory Report 2016 recently.
Activity in the office sector is also expected to intensify with supply likely to see a spurt.
Dutt said: “2016 is likely to witness net absorption of office space of approximately 30-32 million sq ft, higher than 2015 levels.
“This buoyancy is expected to trickle down to the residential sector in the medium-to-long term, spurred by lower interest rates, higher consumer confidence and government initiatives to boost the housing sector.”