Towards a Pro-Consumer Realty Market with RERA
Jun 01, 2017 Real Estate News
The real estate market in India has been witness to a number of policy changes in the past year. After the Real Estate (Regulation and Development) Act, 2016 was passed by the Government, the Real estate Regulatory Authority (RERA) was established at the national level in May 2016. This policy change, coupled with the provisions in the Union Budget, are likely to impact in price correction and greater transparency. Industry players and stakeholders predict that this will improve the consumer climate and increase demand.
As per the Act, each state has to have a RERA in place in a year’s time. It will be made mandatory for all real estate projects, commercial and residential, to register with RERA. This will, in turn, ensure accountability. It will be made mandatory for all developers to disclose the project details including land status and clearances. The developers will be accountable for the timelines set. These measures will protect consumers’ rights. It will help them get possession on time and ensure that they get what was promised and what they pay for.
The buyers and the developers will also now be on a level field with respect to penalties. They will be liable to pay the same rate of interest in the case of delayed payment and delayed possession respectively.
The cash component in property transaction is also likely to go down, resulting in 15 percent to 20 percent fall in land prices.
In addition to this, a number of other changes are being witnessed in the market. For instance, almost all banks lowered interest rates on home loans. The Union budget has also listed several incentives for promotion of affordable housing. These budgetary reforms are likely to result in better performance of the sector in the course of the year.
The beginning of the year 2017 has seen an improved buyer sentiment. Many large developers, like the Lodha Group, has sold 850 units in February this year. Industry experts say that the second half of 2017 will see a positive impact and increase in momentum in the market when RERA will be in full effect. The 3-4 months before that are like a gestation period.
As the dust of demonetisation settles, the Benami Amendment Act and RERA are predicted to bring the genuine or ‘real’ buyers back to the market in anticipation of higher transparency and efficiency. According to surveys, 45 percent of the consumers are likely to invest in properties in the next six months and another 26 percent would enter the market within a year.
RERA will have long term and permanent effects in driving the unscrupulous and unorganised developers out of the market and building a level field for the credible players and genuine buyers. These steps will lead to a gradual revival towards a pro-consumer climate.
The real estate sector has traditionally unorganised and fragmented. The policy changes initiated will contribute in organising the sector. Coupled with recent court action against errant developers and price corrections, these are improving consumer confidence.
As per the Act, each state has to have a RERA in place in a year’s time. It will be made mandatory for all real estate projects, commercial and residential, to register with RERA. This will, in turn, ensure accountability. It will be made mandatory for all developers to disclose the project details including land status and clearances. The developers will be accountable for the timelines set. These measures will protect consumers’ rights. It will help them get possession on time and ensure that they get what was promised and what they pay for.
The buyers and the developers will also now be on a level field with respect to penalties. They will be liable to pay the same rate of interest in the case of delayed payment and delayed possession respectively.
The cash component in property transaction is also likely to go down, resulting in 15 percent to 20 percent fall in land prices.
In addition to this, a number of other changes are being witnessed in the market. For instance, almost all banks lowered interest rates on home loans. The Union budget has also listed several incentives for promotion of affordable housing. These budgetary reforms are likely to result in better performance of the sector in the course of the year.
The beginning of the year 2017 has seen an improved buyer sentiment. Many large developers, like the Lodha Group, has sold 850 units in February this year. Industry experts say that the second half of 2017 will see a positive impact and increase in momentum in the market when RERA will be in full effect. The 3-4 months before that are like a gestation period.
As the dust of demonetisation settles, the Benami Amendment Act and RERA are predicted to bring the genuine or ‘real’ buyers back to the market in anticipation of higher transparency and efficiency. According to surveys, 45 percent of the consumers are likely to invest in properties in the next six months and another 26 percent would enter the market within a year.
RERA will have long term and permanent effects in driving the unscrupulous and unorganised developers out of the market and building a level field for the credible players and genuine buyers. These steps will lead to a gradual revival towards a pro-consumer climate.
The real estate sector has traditionally unorganised and fragmented. The policy changes initiated will contribute in organising the sector. Coupled with recent court action against errant developers and price corrections, these are improving consumer confidence.
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