Anuj Puri, Chairman of Anarock Property Consultants, said "It (new government) inherits major issues that the real estate industry is still grappling with, and require immediate attention. The issues include a surfeit of stalled or delayed housing projects, a huge pile-up of unsold stock across cities (paradoxically juxtaposed against a huge housing deficit), property prices that remain unaffordable for the large part of population, and the ongoing liquidity crisis of developers.
"The real estate industry is hopeful that the government will redress and resolve the liquidity crisis the sector is facing," said Niranjan Hiranandani, President of the National Real Estate Development Council (NAREDCO). A strong and steady government should bring about stability with remedial actions without much delay, he added.
The liquidity crisis became apparent after infrastructure lending major ILiamp;FS in September defaulted on few of its commercial papers, which impacted several segments, including the real estate business.
Although the goods and services tax (GST) rates were lowered for the under-construction properties recently, the market players advocate few more changes and streamlining of the GST.
"As far as the GST is concerned, we feel reduction in rates is lucrative for buyers, but input tax credit (ITC) should be given to developers," said Pradeep Aggarwal, Chairman of Signature Global India. Aggarwal is also the Chairman of Assocham National Council on Real Estate, Housing and Urban Development.
In February 2019, the GST Council lowered tax on the under-construction properties to 5 per cent from 18 per cent, and affordable housing projects to 1 per cent from 8 per cent, with effect from April 1. This rate cut, in effect, did away with the ITC or refund given to builders on taxes paid on inputs.
Honey Katiyal, CEO of Investors Clinic, said the ITC's inclusion in the GST umbrella for under-construction properties would increase developers' profit share, and added stamp duty and registration charges should also be brought under the GST ambit.
"The relaxation in GST with inclusion of the ITCs for developers along with addition of stamp duty and registration charges will help bridge the demand-supply gap," he said.
The single-window clearance for projects is another long-standing demand, and realtors say they expect the new government to take steps on that front.
"This process will create a positive environment as delay in clearances result in increased cost, which reflect on homebuyers. The single-window system will help in speeding up the clearance process, while minimising documentation. It will benefit both the sector and the homebuyers," Katiyal said.
The industry status for the sector is also being demanded for long. The government accorded industry status to the affordable housing segment in 2017, and developers feel it should be extended to the entire sector.
The industry or infrastructure status helps players get loans on easy rates from banks compared with financial institutions or private equity funds. It also means easing of cap on banks' lending to a particular industry.
"After the affordable segment has been awarded the infrastructure industry status, we are hopeful the government will award the industry status to the entire realty segment," said Abhishek Kulkarni, Chairman and Managing Director of Million Sqft Realty.
As the market saw several measures, like the Real Estate (Regulation and Development) Act, the Insolvency and Bankruptcy Code and the GST, in the past few years, with the NDA returning with even bigger mandate than 2014, sector players expect further reforms.