The country's real estate sector is passing through a phase of consolidation post demonetisation, the Union Budget and changes in the regulatory environment, according to Gitamber Anand, National President of real estate body Credai.

In an exclusive interaction with BusinessLine, the Credai President said, “The sector, which had faced a number of headwinds in the past, is seeking to shrug off legacy issues and going on to become a more organised business.”

“As realty braces up to the new GST regime, the focus is on consolidation. The organised real estate segment is seeking to address the huge demand for housing in seven major metros and tier 2-3 cities, together seen to have a demand for about 60 million houses,” he said.

Housing shortfall is likely to be there for over next 5-10 years. Both commercial and retail segments too will see increased offtake as the economy is projected to sustain its current growth momentum.

Housing sector faces the legacy of a perception that it has a huge component of cash transaction. With a member base of over 12,000, Credai is seeking to address this through fair pricing, transparency and is being aided through purchase of property by raising loans, Anand said.

“This fair business approach will play a major role in attracting investments too into the sector,” he felt.

Post demonetisation, from January things are getting back to normalcy and February has been good. However, this does not mean big upside to the sector's growth.

“We believe the sector will grow steadily over the next 12-18 months. Prices too have stabilised and in some segments have also retracted by about 15-20 per cent,” he explained.

The issue of trust deficit is being pro-actively addressed and buyers are getting to gain from the new norms, drop in home loan rates and encouragement from the Government, all translating into lower overall costs in the long run, the Credai President said.

“The year 2017 will see a slow run-up in terms of increase in sales. There is not much land left in good locations in major cities. This means, when things get better, and demand goes up, prices will spiral up,” he said.

The affordable housing segment, whose definition has changed over the years to cover housing up to Rs 65 lakh, would be a major focus area for most developers and become a demand driver for high volume and lower margin business.

Referring to GST, he said, “We hope to be placed under lower slab. The real estate and construction sector, which employs over 5 crore people, is the second largest job creator after agriculture. The growth of this sector will play a big role in the growth of the country's economy and help create jobs.”