Besides the usual interest subvention scheme and freebies, this festival season realty developers are offering GST waiver to attract buyers even as new launches have become selective.
Post-demonetisation, RERA and GST implementation, developers say greenshoots of recovery are visible, specifically in mid-segment and affordable housing.
GST waivers Amarjit Bakshi, MD, Central Park, says, “The industry generally experiences an upswing in enquiries from buyers for property transactions during the festival season. Though the industry has undergone quite a few changes owing to developments such as demonetisation, RERA and GST, we still expect a good amount of sales traction in the mid- to high-end housing segment.”
According to industry watchers, GST has reduced the cost of construction for developers who are now able to use input credits for material and services, which was a challenge with the earlier indirect tax regime.
RK Arora, Chairman, Supertech, said, “During the upcoming festive occasions, Supertech is giving assured gifts on every new booking. Moreover, customers can get GST waiver for any new purchase in its ongoing and ready-to-move-in flats across all projects in 50 locations.”
Amit Modi, Director, ABA Corp and Vice-President, CREDAI Western UP, notes, “Easy payment schemes, extended discounts, small appreciation gifts like mobile phones, gold coins or other discounts offerings are being offered by developers. Besides these, we are sharing the burden of GST with the consumer and we will make sure that half of the tax burden will be taken care by us. In fact, we have also gone ahead to make sure that the stamp duty charge is also paid by us.”
New home launches Rushabh Vora, Co-Founder and Director, SILA, explains, “Post-GST, buyers now pay higher taxes on under-construction projects. This should be offset by a benefit in pricing over time, because the cost of construction has reduced for developers. Theoretically, this can be passed on to buyers without affecting the developer’s margins. Further, GST has simplified the way taxes are calculated and charged. This gives a lot more clarity on the tax structure.”
A report by PropEquity, a real estate data, research analytics firm, said that new home launches dipped 83 per cent across top eight cities in the third quarter of 2017 from 24,900 units to 4,313 units (see Table).
Samir Jasuja, CEO & Founder, PropEquity, said, “There is definitely solid demand for ready-to-move-in properties. We expect this festival season to do better than last year as developers are now offering lot of freebies and discounts to clear their earlier stock as well as selectively launching new projects. There is a lot of unsold inventory in the market which is nearing completion.”
Surendra Hiranandani, CMD, House of Hiranandani, said, “The influx of liquidity in the system has ensured attractive home loan rates which combined with the positive effect of GST on ready-to-move-in homes will turn fence-sitters into buyers. Today, customers can book by doing full cheque payment with no hidden costs and expect assured delivery for under-construction projects due to stringent provisions of RERA.”