Has The Property Market Finally Become A Buyers’ Market?
With builders offering discounts and freebies on property for sale in Mumbai and other cities, it is often being argued that the real estate market in India has become a buyers’ market. Since several years, majority of the clauses in real estate were in the favor of developers, which had resulted in low buyer’s sentiments. And inordinate construction delays just added more fuel to the fire. However, the present day is seeing a wave of change with real estate market transforming gradually into buyers’ market. This U-turn in the market is due to the introduction of the real estate bill into the system.
With the Real Estate (Regulation and Development) Act, 2013 becoming a reality, the market is all set to become more transparent and organized in the times to come. There will be a consumer protection/grievance cell to resolve buyers’ issues. Projects delivery will be as scheduled or else compensation at the rate of 12% per year will be paid to the customers for the delay. The authenticity of the projects can also be inspected with the implementation of RERA, as projects over 500 square meters or 8 apartments will be registered online with all the important information.
It is just not the RERA which is in favor of the buyers. Recently, the Reserve Bank of India cut the repo rate by 25 basis points to 6.25%, which has also come in the favor of buyers. With the rate cut, major banks are also likely to cut the home loan interest rates soon.
And then, there is the Goods and Services Tax (GST) Bill passed in the parliament recently, which is also going to have a major influence in the real estate sector. With the replacement of multiple taxes namely VAT/CST, excise duty etc. with a single tax, GST bill is going to benefit the buyer of House for sale in Mumbai and other cities. Also, under the abatement scheme in 2016 budget, the buyers can bring down the effective service tax rate to 4.35% in case of investing in an under-construction property.
However, saying that with these factors in play, the property market has finally become buyers’ market is not correct. There is much more than regulations in an ideal buyers’ market. Moreover, better job scenario, affordability and low home loan interest rates are some of the factors that the buyer’s market should ideally reflect.