Affordable luxury housing to gain momentum in 2019

The full effect of RERA and GST was felt by the real estate sector in 2018, making it one of the most transformational years for industry in recent history. Higher transactional costs for consumers have forced a change in tastes and preferences. Consumers are forced to make compromises by choosing to purchase smaller homes to suit their pockets. The latter part of the year also brought with it uncertainties around liquidity of the Non-Banking Financial Companies (NBFCs), a significant cog in the real estate funding wheel. Over the past decade, NBFCs have been crucial to the growth of the real estate sector and capital provided by them has been instrumental in bridging cash flow gaps for developers across the country. The government’s focus on affordable housing has been extremely well received and has reaped rich dividends in a very short time. The policies implemented in general target first-time homebuyers and not ones looking to upgrade to bigger and better homes. Therefore, 2018 will have seen several first-time homebuyers in the affordable housing segment enter the market, but many more homebuyers from the affordable luxury segment have chosen to opt for the wait-and-watch approach. The affordable luxury housing sector merges modern expectations with a budget to deliver aspirational comfort that rivals international standards. As a result, the sector has considerable potential for growth in 2019 as India continues to have a population that aspires to improve its standard of living. With the right intervention from the government, 2019 could prove to be an important year for the affordable luxury housing sector in India.