The year gone by has had a major impact on various aspects of real estate. 2016 brought some of the most radical changes for the real estate industry. The rates have gone up and down, the government brought in some big surprises, and when the dust settled down, there seemed to be a more stable scenario.
Let us see how the gone year made real estate a better place than before:
- Demonetization: Although a lot of time has passed since the demonetization of the 500 and 1000 rupee currency, it continues to have an affect even today. It is still a much talked about topic, and continues to be a major influencer in people’s purchasing decisions. When it was introduced, one of the main intentions behind this act was the elimination of black money. The greatest hub of black money in real estate is the ‘secondary’ or the ‘resale’ market. Targeting this segment, the move to demonetize resulted in falling prices in the secondary market, which led to more buyers coming to the fore. Now that the budget for 2017 has also been announced, it is clear that demonetization also resulted in banks getting higher deposits and decreasing their interest rates. Once the market gets a push, the unsold properties should also disappear fast by the end of 2017.
- E.R.A: This act has been a great help to the real estate sector. The government introduced this act to the states, and following that even the states have come out with their own set of rules under this act. With R.E.R.A. came the need to digitize, and with digitization will come higher transparency. Apart from the other highlights of this act, the fact that builders who hold back relevant updates from the buyer can be taken to court is a radical change. It has changed the game in favour of the customers, and rightly so.
- Benami: These are the properties that are bought by one person under the name of some other. In fact, it has been a huge endemic in the real estate market, acting as a major source of black money and tax evasion. In the year 2016, the government had passed an act to try and stop Benami transactions. The ‘Benami Transactions (Prohibition) Amendment Act’ bans such practices, and the guilty party can be sentenced up to 7 years of imprisonment and /or a fine. In such a case, the property is confiscated by the government and no compensation is given to the owner. This, of course, acts as a much bigger loss to the owner than any possible fine. These acts are a great help in opening up the market to low income buyers and creating a corruption free sector.
- Litigation: A very integral part of the real estate sector is the judicial process. There are many pending property cases in the various courts of our country, many of them done by buyers who were conned by builders. With R.E.R.A. came the recommendation to solve real estate cases in the shortest time possible. But, 2016 also saw some groundbreaking verdicts that brought a new ray of hope for all real estate customers. The verdict we refer to is the one surrounding the Noida project. The court, in much relief to the buyers, gave a verdict wherein they ordered the builders to refund the amount to the buyers who did not want to hold the flats in that project anymore. Such a verdict goes a long way in bringing back the hope of the common buyer. It also gives them the ability to trust real estate, because they know that if anything does go wrong, the law is on their side, and will make a fair judgment.
All in all, it can be said that 2016 saw some very radical changes both in terms of law making as well as execution in the real estate sector. Real estate is a very integral part of the country’s growth because infrastructure is the backbone of all developed and developing nations. As a nation, we have moved one more step towards better development and transparent, corruption free growth.