A major part of 2016 passed with an anticipation of an impending upswing in Indian real estate. In the first half, legislative processes in the parliament kept the movement limited, and then, a near griding halt was witnessed in the last quarter, with the ‘demonetisation’ event.

Only for a few weeks, during the festive season, there was a slight dash of hope.

However, there is a much bigger picture that is waiting to emerge. 2017, in all likelihood, is poised as a foundation-year for a different real estate scenario. This new picture needs to be understood carefully, notwithstanding the grey-areas which will continue to cloud our views at the stage.

It is important to try and develop an outlook on structure (organisation), volumes, and average prices of real estate. Further, we must also keep in mind that different geographies, or locations, will continue to tread differently, and with diverse paths.

Though ‘demonetisation’ has already sunk-in, most people are still mystified by its impact. It must be seen as a part of a series. It is evident that it has halted or slowed a substantial part of transactions across the country in the last two months.

The impact of this event in 2017 is immense. A large section of sellers cannot expect to easily transact in cash — as was rampant earlier, making real estate highly non-transparent.

If not all, a good part of real estate transactions will turn transparent. Hence, the very first impact of 2016 in the current year will be a relatively cleaner and information-symmetry driven real estate.

The next few links are to be awaited and assessed in 2017. These include the Benami Transaction (Prohibition) Amendment Act 2016, Real Estate Regulatory Authority in states, implementation of Goods & Services Tax (GST), as vital links.

Implemented in a sequence and through 2017, these will act to substantially change the landscape of real estate. Structurally, construction, sales, ownership, financing, valuation, etc will be significantly impacted. Whereas there is uncertainty about the immediate impact, in the longer term, they will help create a highly structured and well-regulated marketplace.

As regards the supply-creation and sale process, there is definitely a challenge that with various regulatory and money-control measures, supply creation in residential space can get constrained in the short-term. There are various unknowns regarding the eventual GST tax-rate.

However, the positive is that the RERA will eradicate bad practices and unprofessional players. Moreover, with the demonetised economy, “black-money” transactions will dip significantly. This is a good news for buyers.

Coupled with REITs, which are getting ready for launches, investors should look forward to real estate as a viable option in 2017 and beyond.

The economy, despite lowered growth estimates, is still expected to remain among the front-runners globally. At even 6.5-7 per cent growth in 2017-18, India will be a leading growth-economy. It was evident even in 2016, when commercial real estate continued to gain momentum.

That signals the rising confidence of corporates and commercial set-ups.

In fact, we now expect the government’s policy-focus to shift to job-creation for the next 12-months. This will bring a much-needed balance between stringent regulatory measures and enhancing the buyers’ capacities.

A good step in this direction was already made by announcing interest rate cuts for small-size home loans of Rs900,000 and Rs1.2 million. Creating affordable housing and enabling its sale will remain the government’s primary target.

In the past, the OCB route has been tried, but real success will lie only in making real estate cheaper at all levels. Merely focusing on one segment may not yield desired results.

The sweet-spot buying-price across smaller cities and major metros is approximately Rs4 million to Rs7 million respectively. For a variety of reasons, these price points are far-below the average selling-prices.

The gap must be bridged through a string of initiatives like relieving density pressures, fast-tracking transit and connectivity, as well as structural reforms to reduce land-prices and input costs.

There is an anticipation that prices will cool-off to some extent. However, the belief that there is a 20-30 per cent correction in the making, could be misplaced.

Such a belief is founded on eradication of black-money from real estate transactions. However, even if all of it were to be eradicated (which is unlikely), the projected fall in prices will be cushioned by factors like enhanced demand, falling interest-rates, and developers’ willingness to close out on large-volume deals.

Eventually, the price-correction in residential real estate may only witness a 5-8 per cent impact. However, if the GST leads to marginal rise in tax-rates, the impact may turn out to be negligible.

Despite this, there is every possibility of rising demand, on the back of various factors discussed above.

On the commercial front, there is every reason to believe that real estate consumption in commercial centres like Bengaluru, Mumbai, NCR, etc will rise. There are great uncertainties for the commercial sector due to changing business-scape in western markets.

Indian IT-export dependent companies may be affected in the short-term, but the domestic demand in areas like energy, urban development (smart-cities), etc, are creating ever-increasing avenues.

Overall, the dice has only been rolled last November. Common people will eagerly await next few measures — including the budget in February — to start participating in the real estate full-steam.

2017 may turn out to be one of the watershed years in the history of Indian real estate.

The writer is South Asia Director, Valuations & Advisory, Colliers International India.