The real estate sector across two Telugu states is bound to witness major changes in 2017 with the introduction of Regulation and Development) bill in May 2017 (RERA) and implementation of Goods and Service Tax (GST). In view of the several requirements of the RERA Act, the real estate developers stating that they would be constrained to take up smaller and limited number of real estate projects.

The normal practice of builders is to sell homes before even laying a brick. But new regulations forces them to shift to build-and-sell model for their residential projects. As a result they would be constrained to take up multiple projects at a time.

Moreover, sales of ready properties have shot up significantly in the past one year, compared with under-construction ones, as customers increasingly chose to buy completed projects due to growing uncertainty in the real estate market.

Moreover, promoters are expecting a raise of 20 percent in the real estate prices this year as in the post-demonetisation scenario, builders are going slowly on new launches. In view of this change, a promoter said that the supply of real estate products will come down, while the demand continues to increase, particularly in Amaravati capital region of Andhra Pradesh.

This would leads to increase in the gap between demand and supply. With the introduction of GST, the rate service tax will go up by 18 per cent, compared to 5.5 per cent, which is now applicable. This makes invariable increase in real estate prices.

However, they are ruling out that demonetisation may not have effect on prices of residential housing as most of customers pay the housing installments from their savings or bank loans. As now banks are also moving fast for liberal housing loans, this will leads to more demand in this sector.