Current State Of Real Estate In Bhubaneswar, India

The real estate market in India is currently in the midst of fairly challenging times. In the last few years, there have been a few noticeable macro shifts that have challenged the realty sector.

The demonetization exercise in November 2016 put brakes on the growth of the real estate market as it made the rampant use of cash in real estate transactions more difficult to track. The Real Estate Regulation Act (RERA) that was passed by the Centre in 2016 and most states in 2017 put a lot of onus on builders which further halted new offerings in the residential space. Several Apartments in Bhubaneswar are in stand still after demonetization
                                                                                                                         
In addition, the demand-supply gap has been an issue with most of the key real estate markets such as Mumbai, Bengaluru, and Bhubaneswar facing a serious oversupply of flats in Bhubaneswar. However, the big funding challenge came in 2018 after the IL&FS fiasco.

Prior to GST implementation, there was a service tax of 4.5% that was payable in case of under-construction property. Post GST, that rate has gone up sharply to 12% making it almost unattractive to buyers. While the benefit of the input tax credit (ITC) is available on this 12%, it practically does not amount to anything. Property buyers were already paying registration charges and stamp duty on properties. With the addition of 12% GST, the total statutory cost has gone up by 20% of the cost of property for the buyer.

Outlook for the realty sector in India

·         Broadly, oversupply in the mid and premium segments may still take years to narrow. However, the big areas of growth in realty could come from low-cost housing, smart cities, and commercial realty. Let us look at some interesting future trends for realty in India.

·         There are some positive developments in low-cost housing and apartments in Bhubaneswar, Mumbai and other regions which have launched nearly 1,04,000 units with an investment of Rs15,576cr, while Gujarat and the NCR region will put up another 70,000 units with a similar investment.

·         Under the Smart Cities program, a total of 100 cities will see the program positively impacting the lives of nearly 9.95cr dwellers with high-quality core infrastructure and a more sustainable quality of life.