NEW DELHI: Implementation of Real Estate (Regulation and Development) Act, 2016 will boost the Non-Resident Indian sentiments on Indian real estate sector, say market experts.
According to BusinessLine article, With more transparency coming in the realty sector, there is bound to be an increase in the number of NRIs planning to buy property back home, they said..
The Indian real estate sector, in recent times, has witnessed a lot of changes, more so after the introduction of the Real Estate (Regulation and Development) Act, 2016 and the Goods and Services Tax (GST).
“As RERA will ensure timely delivery of projects and also since all the information will be available online, it will boost the confidence of NRIs who are thinking of investing in the Indian real estate market. But, the GST might have a negative impact on the buyers as there might be increase in the price of the properties,” said Parveen Jain, Vice-Chairman, NAREDCO (National Real Estate Development Council).
Right now, prospective home-buyers have to pay a 12 per cent GST to developers if they are planning to buy a property which is under construction. However, there is no GST on the fully constructed property.
Since many NRIs are not too familiar with RERA, some of the real estate firms like Omkar Realtors are organising workshops to brief them about the laws, according to its Senior Vice-President Rahul Maroo.
Also, keeping in mind the NRIs preference of healthy lifestyle, many developers in India are coming up with projects which are at par with international standards, he added.
However, RV Verma, former Chairman of the National Housing Bank, has a different take on the GST. He said, “The introduction of the GST in the real estate and construction industry will certainly benefit the sector and its various stakeholders.
This will bring in greater transparency in the valuations of transactions as it provides incentives to the builders for adopting and declaring fair and real valuations. This , in turn, will result in more transparent and efficient pricing with the suppliers of residential housing standing to gain from the input credits which was not the case under the service tax regime.”
On the factors that the NRI should keep in mind while purchasing a property in India, Verma, who is also a consultant to the World Bank, said: “With RERA, the NRI community will have better access to the information about the builders, their track record and the status of various approvals.
“So, the NRIs should check all the aspects, including the status of land and its land use.”
Anuj Puri, Chairman, ANAROCK Property Consultants Private Ltd, said: “In fact, interest in residential properties from NRIs whose focus is not so much on investment growth as on owning a home for themselves and their families back home continues unabated.
“The fact that residential property prices in India have bottomed, with developers rolling out highly attractive offers, has worked very well for such buyers.”
The introduction of RERA has turned out to be a real market force, and the transparency it enforces will draw residential real estate back to the centre stage.
Industry experts also think that there is not much appreciation in property prices in the real estate market of the developed countries.