Will GST be the game-changer for India’s real estate sector? | ValueNotes Connect – May 2017

ValueNotes Connect

Welcome to the May issue of ValueNotes Connect.

The much anticipated, and possibly India’s biggest tax reform since independence, will be rolled out on the 1st of July. The goods and services tax (or GST, as it is referred to) will live by its slogan – one nation, one tax – replacing a myriad central and state taxes with a single national tax. India will become one common market, making the movement of goods and services across the country cheaper.

While the Indian government is busy ironing out the implementation challenges, a lot has been said about the possible impact of GST on the real estate sector. In particular, how is it likely to impact the cement and steel sectors? While these two critical sectors are expected to witness improved margins after GST is implemented, it is likely that there will be a deflationary trend on their prices. This will have a direct positive impact on the cost of construction and it is likely that this benefit will be passed on to the consumers.

India is currently home to ~400 million urban dwellers; an additional 300 million will be added by 2050. The country’s urban housing shortage (currently pegged at 19 million) is projected to be north of 40 million by 2022 – these are conservative estimates and do not take into account the kutcha homes that offer sub-standard living and need upgrading. What must the country do to address the current housing challenge?

Do have a look at our infographic on the opportunities in India’s waterproofing industry.

Lastly – ValueNotes is conducting a survey to understand the best practices in B2B customer satisfaction studies (CSAT), to enable managers to benchmark their own practices versus industry. We invite you to participate in this survey.

As always, we hope you enjoy reading our newsletter, and we look forward to your comments.

Best regards.

Will GST really revive the real estate sector?

by Sa’ad Shaikh

Latest reports suggest that the GST (goods and services tax) roll out for July 1 is on schedule. While it is difficult to guess whether or not GST will have a positive impact on the real estate sector, there is another area which may benefit – GST on key construction inputs viz. cement and steel. These sectors are expected to witness improved margins, and it is likely that there will be a deflationary trend on their prices. This will have a direct positive impact on the cost of construction, and it is likely that this benefit will be passed on to the consumers.

more>>

Urbanisation and the housing challenge

by Sa’ad Shaikh

India is urbanising at a rapid rate. The country is currently home to ~400 million urban dwellers; an additional 300 million will be added by 2050. The urban housing shortage (currently pegged at 19 million) is projected to be north of 40 million by 2022 – these are conservative estimates and do not take into account the kutcha homes that offer sub-standard living and need upgrading. Yet, real estate developers have plenty of unsold inventory. This demand-supply gap is primarily due to the gigantic shortage of affordable housing.

more>>

Insights

  • Infographic: Opportunities in India’s waterproofing industry

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