Policy certainty key for long term revival of real estate sector: Experts

PUNE: Even as emerging data points to a recovery in the real estate sector, realtors and market watchers remain sceptical of the immediate future.They say that much of the current momentum in the market is on account of pent up demand. Realtors also think only policy certainty will add to sustainable future for the second largest job accretive sector after agriculture.Among key things they think will stimulate the market are a steady stamp duty, GST and ready reckoner rate and tax benefits, which can be passed onto the buyer, and easier project finance.“Measures like stamp duty rationalisation by the state government, discount by developers and innovative financial structuring schemes have helped turn the tide. Keeping such incentives time-bound will not work in anyone’s interests. Also, there needs to be a uniform GST treatment for both under-construction and ready-to-move homes. The factors that impact demand must be imbibed and factored into the whole equation. In a healthy market, there cannot be a perpetual stand-off between buyers and sellers. The returning demand is ample proof that when stakeholders relax previously held hard stances, the market begins to revive,” said Aditi Watve, city head, Pune, Anarock Property Consultants.She added that people need to be certain of the system; there needs to be a high degree of predictability for the real estate sentiment to thrive.“Anything that disrupts the status quo negatively impacts buyer and investor sentiment,” she added.Atul Chordia, director, Panchshil Realty, said that stamp duty should be reduced to max 2% of the guidance value to move the market beyond the “pent up demand”.However, others felt that momentum of home sales and launches will continue post the festive season.“The lockdown confined people to their homes and made them enter an entirely new universe where the office, school/ college and regular household activities amalgamated within the boundaries of their homes. The compact homes of Indian cities and the joint family culture of India only added chaos to this universe. As the initial lockdown of 21 days got extended to nearly six months in the form of partial lockdowns, families felt the need for larger apartments, thereby creating a fresh demand for upgrades which may not have been a necessity earlier,” said Paramvir Singh Paul, branch director, Knight Frank India.Rohit Gera, managing director, Gera Developments said that all policy shocks have pushed the market more into consolidation phase.“Every shock that has hit the real estate market has pushed the weakest of the developers to the edge and many today are facing a tremendous liquidity crisis. The outcome of this is home buyers are finally seeking out reputed developers with a track record for delivery and not getting lured by deep discounts by fly-by-night operators,” he added.