Real Estate Sector Starting To See Initial Signs Of Gradual Revival
With the after-effects of RERA and GST settling in, the real estate sector is starting to see the initial signs of a gradual revival in the residential sector. Demand is primarily being seen by end-users only. Grade A commercial, quality retail (mall) space and warehousing continue to evince strong interest, according to Colliers Research.
As per Colliers Research, absorption of affordable housing projects should further gain momentum over 2018 as an impact of earlier announced policies by the government such as infrastructure status to the segment, establishment of Affordable Housing Fund (AHF) and reduced GST to 8% from 12% for under-construction, affordable and low-cost housing to ensure Housing for all by 2022.
With RERA scheduled for full implementation this year, developers are expected to focus on delivering ongoing projects on time and avoid penalties for non-compliance. Thereby, it is expected that the demand for mid-range and luxury-housing projects should continue to experience a lull over 2018 as the developers’ focus is likely to stay on project completions, it says.
Although, the release of fresh inventories has slowed, with only 30,000 units launched across major cities in the country, demand for homes, especially in the ready-to-move segment for end-users has gained considerable pace. The demand upswing for ready-to-move-in projects is majorly due to benefits of GST and risk-free possession, says Senior Associate Director, Research at Colliers International India.
Commercial real estate leasing segment recorded 11.0 million sq ft of pan-Indian gross absorption in the first quarter of 2018, representing an 18 percent year-on-year rise in demand.
On the supply side, the office market segment is becoming more organised with developers being strategic in their developments plans and upgrading their office portfolios. About 9.0 million sq ft of new Grade A office space reached completions across major cities in the first quarter of 2018.
As per Colliers Research, the sustained demand in commercial office segment and the anticipation of Real Estate Investment Trust (REIT) in turn, should increase investor’s appetite for commercial assets over 2018.
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