How the new changes in the housing policy is positively impacting the real estate sector

Housing sales in India’s top seven cities New Delhi, Mumbai, Bengaluru, Pune, Hyderabad, Chennai, and Kolkata have increased by 31% year on year to an all-time high of 4,76,530 units so far in 2023, according to a real estate consultant firm. The data indicated that the Mumbai Metropolitan Region (MMR) had the greatest sales of around 1,53,870 units in 2023 (compared to 1,09,730 units in 2022), followed by Pune with 86,680 units (compared to 57,145 units in 2022).

Alongside that RBI’s (The Reserve Bank of India) policy of keeping the interest rate on hold has helped homebuyers purchase their dream homes and increased the number of people who became homeowners. The unchanged repo rate helped the residential real estate market sustain its sales momentum. According to various reports the real estate sector is expected to remain one of the top performing sectors in 2024.

Based on the trajectory of the performance of the real estate industry it is very evident how vital of a role it plays in the economy. Whether it’s creating new jobs or contributing to overall economic growth, the dynamics of the real estate sector are intricately linked to a variety of factors, including policy and regulatory changes. Over the years, governments have implemented regulatory reforms to make the real estate industry more transparent, protect stakeholders, and promote economic growth.

Also Read: India’s booming economy: A golden age for real estate investment

The government has implemented reforms like Real Estate Regulatory Authority, GST which brought transparency in real estate sector and has made property buyers much more confidant then before while buying any real estate property in real estate but the rental market also most the benefited segment which had the most positive impact because of GST with exemption of GST from the residential property rented and 18% GST on maintenance exceeding 7.5 thousand per month, Steady increase in the projects which are already completed and least interested in the projects which are undergoing construction and the affordable housing for all which has helped in giving a boost to affordable housing in India.

In order to further support the real estate sector the Maharashtra government is set to revamp the state housing policy 17 years after the last revision of the housing policy. The new housing policy is expected to target the Mumbai real estate sector, followed by Nashik and Nagpur. The policy aims to make more land available to developers, ensure quick project approvals, and integrate existing incentives, the focus will be on the “walk to work” concept in industrial areas, and the policy is expected to come into effect next financial year establishing a university to produce qualified workers, supporting a rental housing program for immigrant workers, and constructing housing that is affordable and friendly to elderly people. The government is expected to provide incentives for affordable housing under PMAY, which is a scheme of the central government. Developers are demanding that the government redefines affordable housing in the context of metro cities. Some policy decisions are also expected to revive projects that have been delayed and stuck, including those for slum rehabilitation. According to MahaRERA, over 7,700 projects registered with MahaRERA have lapsed, which means that developers are not allowed to advertise, market or sell flats in those projects. Stakeholders, including developers and consumer forums, have been consulted, and a consultant has been appointed to draft the policy. Apart from this, the policy will promote rental housing among the working class, especially the migratory workers. The townships are expected to be constructed and operated by developers.

The imminent transformation of Maharashtra’s housing policy signifies a resolute commitment to streamlined approvals and enticing incentives. Government backing for affordable housing and the strategic revival of stalled projects underscore a dedicated focus on fulfilling diverse housing requirements. The spotlight on rental housing for migratory workers resonates with societal shifts, painting a vivid picture of the sector’s resilience and adaptability in the face of evolving dynamics.

Also Read: Maharashtra’s visionary IT policy: Redefining real estate for a brighter tomorrow