Come 1st May and the much awaited Real Estate Regulation & Development Act (RERA) will finally become a reality. An act that is expected to bring transparency to the sector and attract foreign investors in the process, RERA is well on its way to revive the sector by giving a major push to the demand for both residential as well as commercial properties in the second half of the current financial year.
RERA has made it mandatory to establish a State Real Estate Regulator Authority in each state, which will help in settling property related disputes and make the builders more accountable, thereby increasing buyers' trust in the sector. All real estate projects will have to be mandatorily registered with the regulatory authority for transparent execution. The real estate developers will have to follow the rules and regulations of the RERA Act and complete the projects on time. At present, the builders are already focusing on completing their existing projects instead of launching new ones. Timely delivery, coupled with compulsory disclosure of project details, will lend greater credibility to the developers, thereby increasing the demand amongst buyers in the process.
According to industry stakeholders, once RERA is implemented, it will lead to slight price correction. The cash component in real estate transactions will see a downfall, bringing down the land prices, thus leading to reduced property rates. The buyers have an added benefit of lowered home loan interest rates by banks post demonetization. Both these factors will generate demand for housing sector in the coming months. Also, the stable political environment in the country, due to the recent electoral wins of the ruling party in state and municipal elections has renewed confidence in the economy and will further cause a positive impact on the real estate sector.
The buyers' interests will be fully protected and they will feel more confident investing in the real estate sector. The developers will have to provide all the amenities and stick to the specifications of the project. Unfair trade practices, funds diversion, indefinite delays in dispute resolutions in the civil courts, etc. will become a thing of the past after RERA is implemented. Consumers will be able to make informed choices and are much more likely to invest without hesitation in the sector when they exactly know what they are paying for.
RERA has created a level playing field for both buyers and developers, in the sense that both parties will have to pay the same rate of interest in case the developer fails to give possession on time or the buyer delays payment. RERA is expected to make the real estate sector more organized. After its implementation, only genuine developers will be able to operate. The act will protect the consumer rights with mandatory disclosure of project details such as land status and clearances. Huge domestic and foreign investments, quality construction, timely delivery, lowered prices as well as improved consumer climate owing to RERA, will all work in tandem to lead the real estate sector towards robust growth in the coming months of 2017.