With the implementation of Real Estate Regulation and Development Act, 2016, there will be a boost in the Non-Resident Indian sentiments on the Indian real estate sector. There will be an increased transparency coming into the sector which is bound to increase in the number of NRIs planning to buy property back home.
The real estate sector in India has seen a lot of changes, especially after the introduction of the RERA Act, 2016 and the GST. Parveen Jain, Vice-Chairman of National Real Estate Development Council mentioned that RERA will ensure the timely delivery of projects and since all the information will be available online, it will also boost the confidence of NRIs who have been planning to invest in the Indian real estate market. But, GST could have a negative impact on the buyers as there could be a rise in the price of properties. Currently, prospective home buyers are required to pay a 12% GST to the developers if they are planning to buy a property which is under construction. However, there is no GST on the fully constructed property.
The introduction of GST in the industry is expected to benefit the sector and its stakeholders. It will bring in greater transparency in the valuation of the transaction as it will provide greater incentives to the builders for adopting and declaring the fair valuation. This will lead to higher transparency and efficient pricing with the suppliers of residential housing standing to gain from the input credit which was not the case under the service tax regime. NRIs will have a better access to information about the builders and will be able to track the record and status of various approvals. The residential property prices have bottomed and developers are rolling out attractive offers. This has brought great interest from the buyers.
The introduction of RERA has turned out to be a real market force and the transparency it enforces will draw the residential real estate back to center stage. Industry experts believe that there is not much appreciation in the property prices in the real estate market for the developed countries. While many NRIs are not familiar with RERA, some real estate firms are organizing workshops in order to brief them about the laws. Keeping in mind the NRIs preference of a healthy lifestyle, many developers are coming up with projects which are at par with international standards.