2017 was quite an eventful year for the Indian economy at large, and the real estate sector got more than its usual share of the limelight.

A series of reforms and structural changes tore into the very heart of the industry, effecting a surgical strike at market opacity, unaccounted funds transactions and customer victimization.

The entire real estate fraternity had to re-orient their businesses to sustain in the changing environment. 

Already, the real estate sector has shed a massive part of its unorganized and fragmented nature, and the ways and means of doing business in changed for good in 2017.

The incumbent Government maintained a laser focus on changing the fabric of the Indian economy, with direct implications on the real estate industry, by implementing highly impactful reforms:

* Cracking down on black money transactions with demonetization

* Setting up RERA - a regulator to increase financial discipline, improve transparency and empower property buyers

* Introducing GST to boost transparency in taxes and improve business efficiency

* Curbing anonymous property transactions and ownership by incisive amendments to the Benami Properties Act

Simultaneously, the Government's ambitious 'Housing for All by 2022' mission also received a massive thrust in 2017 with the granting of the very vital infrastructure status to affordable housing. In addition, the definition of affordable housing and houses classified under MIG underwent a series of tweaks to cover a larger buyer base and help developers offload their budget homes inventory.

Overall, 2017 saw the Government making it clear that home buyers will no longer be at the mercy of real estate developers, and putting various measures in place to ensure that housing supply syncs up with demand and pertinent projects are developed. There are doubtlessly some teething troubles – some of them very obvious - in implementing and executing the new policies and reforms. However, they have made a deep impact even now.

Reputed global agencies have recognized the Government’s efforts in 2017 - India featured in the Top 100 nations in terms of ease of doing business as per the World Bank, and Moody's elevated India’s sovereign rating from the lowest investment grade of Baa3 to Baa2, also upgrading its outlook from 'stable' to 'positive'.

India Residential: Supply-Demand Dynamics

In 2017, new housing project launches were severely impacted by the triple tsunami of demonetization, RERA and GST. only 94,000 units were added in top 7 cities of India between Q1-Q3 2017, which is a drop of more than 50% from the same period in 2016.

However, the last quarter of 2017 looks encouraging - in the first two months of this quarter, around 18,000 units were launched, which is around 90% of the new launches in Q3 2017. With restricted new launches and fence-sitters returning gradually to the market because of the comfort that the structural reforms and enhanced transparency provide them with), 160,000 units were sold during Q1-Q3 2017. The decline in sales was only to the tune of 30% compared to Q1-Q3 2016. Unit sales have exceeded new launches for the consecutive six quarters, and the trend continues in Q4 2017 as well.