Delhi has finally got a full-time real estate regulator under Real Estate Regulatory Act (RERA) with Lt Governor Anil Baijal appointing retired civil services officer
Should the Modi government get credit for keeping real estate prices in India under control?
The various real estate reforms that the current government has introduced in the past 4 years have been lauded by supporters and critics alike.
Amendment to the Benami Property Act has helped curb illegal property transactions that serve as money laundering vehicles.
The tax department has attached 381 properties across the country, worth over Rs 1300 crore in the first nine months since the Benami Transactions (Prohibition) Act was notified for implementation on November 1, last year.
There are 627 more cases that are under investigation by the tax department.
The IBC (Insolvency and Bankruptcy Bill, 2015) streamlined processes for addressing insolvency claims within a certified period of time. This should also help bring down the issue of NPA (Non-Performing Assets) that has been plaguing the Indian banking sector.
However, the move that will benefit commoners the most is the RERA (Real Estate (Regulation and Development) Act, 2016) which mandates infrastructure developers to register all current and completed projects, and furnish details of their projects to the regulatory authority, bringing much needed transparency in the pricing machinations of the real estate industry. It also empowers the consumer to withdraw from the project if not handed over on time, to be eligible for a full refund plus interest on doing so, and getting legal recourse and support.
And it makes the brokers more accountable, which is a great move considering the shady, almost cartel-like, way in which they are used to operating.
“It will bring a lot of accountability in the industry and the ones who believe in professional and transparent business, will reap all the benefits. Now, the agents will have a much larger and responsible role to perform, as they will have to disclose all the appropriate information to the customer and even help them chose a RERA-compliant developer,” says Sam Chopra, founder and chairman of RE/MAX India.
With RERA in force, time of booking. Consequently, RERA is likely to filter out the inexperienced, unprofessional, fly-by-night operators, as brokers not following the guidelines will face hefty penalty or jail or both.that are not mentioned in the documents. Moreover, they will have to provide all information and documents to the home buyers, at the
Coupled with the GST regime which makes it easier to track transaction and isolate tax evasion steps, we can expect the real estate market to become more regulated in the coming years.
For the past 2–3 years, the astronomically high property price growth rate has plummeted. As per,
Buying a property in recent times in India had become a distant dream for most as retail and rental prices have been increasing YoY by 10–15% with no correlation to the reality.
In the outskirts of Mumbai, you can find hundreds of abandoned realty projects due to lack of proper documentation. Newly constructed buildings have only 20–25% occupancy even after years of completion, but the prices keep on increasing, totally defying any demand-supply effects.
Prices across metros have been correcting themselves and are projected to do so.
As per the,
- Unsold inventory dropped by 17% YoY
- Sales increased by 3%
- Except for Hyderabad and Ahmedabad which saw prices increase by 8% and 2% respectively, all 6 other largest cities (Mumbai, Delhi, Kolkata, Chennai, Pune, Bangalore) saw prices drop in the past year, with Mumbai and Kolkata seeing 8–9% downward correction.