More Fine Tuning Required

Textiles, MSMEs were among those adversely impacted by the GST rollout. We look at one more such sector — real estate

- Ashish Sinha

FOR THE REAL ESTATE SECTOR, the implementation of Goods and Services Tax (GST) may have created a level playing field for organised developers. And reduced tax rate on construction materials (cement and steel) may also have brought down the cost of construction. “This in turn translates into lower acquisition cost for under-constructed apartments, giving rise to buyer interest and demand, which again benefits the buyer,” says Ashish R.Puravankara, managing director of Puravankara. There are some more benefits, says Anshuman Magazine, chairman, India and South East Asia, CBRE. “The warehousing sector has attracted interest from domestic as well as national players, resulting in the emergence of better quality, investment-worthy assets,” he says adding the introduction of Real Estate Investment Trusts will further offer an exit route to investors and developers, thereby making investment in real estate a more lucrative opportunity.

But Niranjan Hiranandani, president of National Real Estate Development Council, says post RERA and GST, real estate is facing challenging times. “We estimate the savings in terms of actual construction material costs to have a positive impact, with actual savings in terms of a lower GST rate may be marginal,” he says.