Real estate market in India is witnessing transformation. Growth and focus of investors is shifting from bigger cities such as Mumbai, Delhi and Bangalore to smaller ones such as Ahmedabad for investing in real estate. This has initiated the changing face of the real estate business in India.
Here’s what we speculate the Changing Trends Real Estate Might Witness in 2017.
1. Superior Quality Of Commercial Properties
- With the conceptualization and emergence of start-ups, e-commerce and more awareness of impact of physical space on performance, the requirement of quality commercial space will witness a rise in 2017-2018. Predicting this trend in Ahmedabad, Avirat Group has several ongoing projects for sizable quality and office space in major commercial hubs of Ahmedabad such as Sola and Thaltej.
2. Focus on Affordable Housing
- With newer government caps and implementations of policies for creation of affordable houses, some small sizes houses are except from Income tax. Besides, families are going nuclear, people are often moving cities in search of jobs thus looking for smaller more affordable homes. Avirat Group Ahmedabad has with its latest project Silver Brook, taken the meaning of affordable to an entirely new level. Packed with amenities and spacious layout, this is the answer that all small investors and home owners are looking for.
3. Focus on organized retail space
- Post demonetization, governments focus is to push to digital/ cash less economy. Organized retail is best alternative to reduce use of cash in daily needs, hence, more and more consumer will shift to these hyper retail and per sq ft. gross sales of these retailer will improve. As a result, requirement of retail space will go up in immediate future. Silver Radiance One is the upcoming retail spaces in Ahmedabad.
4. Pressure in mid- size/mid income housing
- In next fiscal, the worst impact will be on mid- size housing which neither qualify for affordable or the luxurious. Due to slow economic activity and decrease in creation of disposal income, there will fewer buyers in this segment. Keeping this trend in mind, developers will need to readjust their project prices particularly when they are still under construction. The difference between affordable and luxurious must be noticeable to the buyer. Unless this happens, inventory movement will be very hard in current industry scenario.
You can find affordable 2 bhk and 3 bhk apartments in Ahmedabad here.
5. Emergence Of Agency Business
- The real estate sector has seen a lot of changes in the business model that it functions on. Owing to the steep land expenses, inflow of inventory is very slow. It means more and more capital is required by developers to execute the project. Availability of quality and a fair amount of capital investment is becoming difficult with each progressing day. Hence the agency model will gradually take over. In this model the investor, the land owner, contractor/land owner will all be seen in the role of stake holders. This will reduce capital dependency and land owners will get maximum return on their land.
6. The GST Buzz
- Presently, home buyers pay service tax and VAT on purchase of residential units when booked prior to their completion. There are also various elements of non-creditable tax costs, like excise duty, customs duty, CST, entry tax, etc. paid by the developer on his procurement side, which is inbuilt into the pricing of the units. All these tax costs add up to anywhere between 22%-25% of the price of the units. The proposed GST should replace these multiple taxes with a single tax and should also ensure smooth flow of credits through the chain. Hence, it is widely expected that GST should reduce the construction cost in the hands of the developer and thereby aid in reducing or at least maintaining the current level of prices in the real estate sector. The only dampener could however be high GST rates (like the 27% GST rate that is doing the rounds) which will offset any possible gains on incremental credits.