There is a public perception that what has transformed this once non-descript city into thriving metro city is the gulf money since a large number of Kochi residents are working in the gulf region. However, Kochi property market is not being driven by gulf money alone; this could be only a reality in the luxury segment.
The Indians think instead of media hyperbole of big measures many of the small but practical measures can go a long way to ensure a house for each family, if not each individual. Some of the suggested measures may not make the government popular, and hence the Indians are not convinced with the promise of housing for all.
Over-supply has been oft-repeated blame game for slow property absorption across the country. However, in most of the cases this over-supply is a misunderstood term. In a country where the housing shortage is huge, any mention of over-supply is misleading in the first place. In most of the property markets, it is the demand & supply mismatch which is termed as over-supply.
This policy ‘trishul’ brought about a paradigm shift in the way Indian real estate does business and laid the groundwork for improved transparency and efficiency in the sector. However, while end-user and investor confidence were rekindled for real estate, it did not exactly set the industry on fire with renewed interest.
Affordable housing was given the much-coveted infrastructure status, and the very definition of affordable housing has been tweaked to accommodate more inventory under this key category. Moreover, the previously highly speculative markets of NCR and MMR have been tamed and are, in fact, leading the thrust of affordable housing today.
This is hardly surprising – a woman’s relationship with her home is unique; and while any other ‘relationship status’ may change in today’s rapidly-evolving socio-economic scenario, owning a home in her name gives her the ultimate security in a changing world.
This home buyers’ outburst over the media hype & industry reaction with reference to reduced GST is not an exception. Across the country the home buyers are questioning how the GST reduction has made the houses affordable in the cities where the jobless growth is fast turning into job loss de-growth. This is over and above the fact that the property prices are way beyond the affordability index.
The real estate has been calculating the revenue on Percentage Completion Method and not Project Completion Method. With the Percentage Completion Method, the developers treated payment received from the home buyers for purchase of flats under construction as turnover of the company and net income generated from such projects was treated as profit.
This is a major push to the housing sector as aspiring home buyers now have a wider range of options to choose from. Additionally, developers would be enthused enough to commit towards offering more residential options in the affordable category.
Cash-strapped builders have been hoping for all and any Government interventions which can help boost their sales volumes. This GST cut will provide such a boost, at least in the short-term as more fence-sitters who had been postponing their purchase decisions now have an additional incentive to take the plunge.