The new government is here and it’s after a very long that we’ve got a stable government at the center. It’s a government that can take things to a whole new level without having to change its decisions due to coalition politics. At the very outset, Modi Sarkar has laid out an ambitious agenda of providing effective governance that would ensure housing for all in 8 years. To back such a target, much is desired from the government that would boost the real estate sector from the slump it is facing. Declining sales, high home loan interest rates, stringent new land acquisition laws, liquidity constraints, inflation and the overall slowdown in the economy are some of the factors proving a drag on realty. For an emerging economy, as former Prime Minister Manmohan Singh once pointed out, “our cities don’t reflect the strength of the Indian economy,” but the new government in place has plans of setting up 100 new cities that has been spelled out in BJP’s 2014 election manifesto.
This would not be possible unless there is a healthy and vibrant realty bazaar in the country. Need of the hour is holistic realty sector reforms covering banking, tax, legal and administrative action.One of the positive aspects already visible because of the stable Modi Sarkar is the confidence that the economy is gaining. The stock markets are touching news highs, the rupee is gaining strength against the dollar and with time inflation is expected to be brought under control.Emboldened by India bouncing back on the path of growth, the realty market looks forward to easing of interest rates on home loans for that is proving to be one of the biggest hurdles for prospective property buyers.To bring order in the realty market, the sector keenly awaits passing of the Real Estate Development Regulation and Development Bill as well as easing of the tough norms of the new land acquisition parameters enacted into law by the new bill, if the government is to fulfill its commitment of providing housing for all.
Timely regulatory approvals for housing projects with effective centre – state coordination over housing and housing development projects would enable many of the stalled projects to take off which would prove a trigger for the realty sector.Unless the land acquisition laws are not rationalized, the high land prices will not encourage developers to start new housing projects. Those that do will do so at a great risk for high home loan interest rates are already deterring prospective home buyers to tap the market. Regulatory approvals, especially for low cost housing projects, will boost sales that will help many of the Indian cities to modernize and improve urban living.
Hopes of easing foreign direct investment (FDI) regulations in realty would help to meet funding requirements. A lot of foreign money that has been waiting on sidelines for want of a clear election verdict, now delivered by the mature Indian voter, is eager to invest in the realty sector. The Modi Sarkar definitely needs to cash on it.To modernize India, clean up its cities, set up new ones and provide housing for all, will require much grit and determination from the incumbent government and without ensuring a healthy growth of the realty sector, it would not be achievable.Timely regulatory approvals for housing projects, access to credit and easing of home loan interest rates are of prime concern that developers expect the government to address to boost the realty bazaar.
Bharat Bhushan is real estate consultant and administers officer at Savitry Greens,Zirakpur www.savitrygreens.com