Will 2017 bring A New Dawn for the Realty Sector?

The year 2016 was a mixed bag of emotion for the realty sector, passing of the Real Estate Regulation and Development Act (RERA) and then accompanied by the Goods and Service Tax (GST) Bill seeing light of the day. Despite sluggishness in sales incorporated by weak buyer sentiment and demonetization taking a further toll in 2016, most real estate developers hope that 2017 will augur well for the sector, bringing forth transparency and accountability into the sector.

2016: A Tumultuous Year for Realty Sector

2016 was indeed a difficult year for real estate. The industry faced headwinds in the form of slow sales and the reduction in project launches followed. Interest rates that were anticipated to come down stayed exceptionally high. The passing of the Real Estate Regulatory Act (RERA) added to the gloom. This is been a year when judicial intervention for non-delivery by developers has been at its highest.

The next obstacle on its way of growth was the demonetization drive. Unsubstantiated comments and wild predictions of price falls have driven many customers to postpone their home purchase decisions. This too has added further stress to the developers.

But, the much awaited reduction in interest rates as well as benefits expected in the budget should help renew the industry for the next few months.

2017: What will be the Fate in this Year?

The sector have been seen series of radical and transformational reforms namely, Demonetisation, Real Estate Regulator Bill (RERA), FDI relaxations, GST, Benami Transactions (Prohibition) Amendment Act, Change in Accounting standards IFRS – all arrive back to back.

The year 2017 will see the Indian real estate sector to be still more transparent, credible and attractive having only organized players on the ground. With home ownership always being a priority ambition and investment objective for all Indians, these reforms have left very positive implications for the home buyers as well as residential real estate sector.

In 2017, the primary sales market mainly across larger cities will move up since real estate prices have already bottomed out and stabilized in these cities with no scope or very minimum chance of further coming down.

Buyers are going to have the best time in 2017. With excess liquidity and lower cost of funds for the banks, lending rates by commercial banks will come down which will be boon for the sector. Banks may further relax their margin requirement stipulations for the home loans. Home buyers will find it easy go in for Housing loans. As a result, demand for housing will go up.

As to office and commercial real estate’s year 2107 holds a bright future. Following the present trend, good connectivity, existing physical and social infrastructure in the area, availability of campus style office spaces will be determinants for the demand, rents and capital values.

Overall, accelerated by the present measures by the Government Indian Real estate sector will definitely face a healthy growth backed by rising demand in the year 2017 with organized, reputed, credible players on the ground.

As said, 2017 would be the best time for the home buyers.Dynamic Levels have identified Oberoi Realty and Ramco Industries as the best players in the realty sector. Oberoi Realty share price dwelled in the greener side during Friday’s trade, trading at Rs. 294.25. Ramco Industries share price gained 3 per cent to settle at Rs. 194.05. Oberoi Realty and Ramco Industries are multibagger stocks for this quarter as recognized by Dynamic Levels, based on their technical and fundamental research, it is seen to have traded in very high volumes. Multibagger stocks have a great potential to grow in the long run.

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