The implementation of the Real Estate (Regulation and Development) Act, 2016, is widely expected to increase transparency and accountability in the real estate sector, while improving its ability to attract institutional capital. This augurs well for all stakeholders with a long-term vision for the sector, including developers, investors, agents and consumers. In particular, organised stakeholders with good corporate governance frameworks and customer focus are expected to derive early benefits from the implementation of RERA, owing to existing compliance with many conditions of the Act. The real estate sector might witness the beginnings of a fresh uptrend, driven by improving consumer sentiment in anticipation of higher transparency and efficiency, renewed confidence in the economy, and lower home loan rates.
How developer-friendly is RERA? Do you think it has turned out to be a win-win bill for both buyers and developers?
The setting up of a Real Estate Regulatory Authority in each state will bring in increased accountability in markets, thereby improving the sector’s credibility score and re-instating a sense of security amongst all stakeholders. Furthermore, mandatory disclosure of project details, including those of the promoter, land status and clearances, is geared towards protecting consumer rights. Overall, the sector is likely to experience positive impact and should perform better over the course of the next year or so. Focussed action on time-bound, transparent approval and single-window clearance system can further aid efficient project execution and delivery.
Will realty demand revive post RERA implementation?
With demonetisation behind us, the Indian real estate sector is showing early signs of revival. The implementation of the Real Estate Act 2016 can accelerate growth in end-user and investor interest, leading to overall gain in momentum for the sector.
Were there any new launches you were holding back in anticipation of RERA? Do you plan to go ahead with the launches immediately post the implementation?
No. We will continue to implement launch and execution plans on a business as usual.
Is RERA going to impact property rates in your city/cities?
With implementation of RERA expected to revive end user interest and drive decision-making, pricing is likely to strengthen across markets in the mid-term. We can also expect some consolidation in the sector. It will be important for home buyers to continue to make purchase decisions based on brand credibility and prior track record, together with fundamentals such as location, connectivity and surrounding infrastructure.
What is the road ahead? What is it that still needs to be done in order to hit the target that RERA was conceptualised for?
According to UN estimates, urban areas in India already contribute more than 60 per cent to GDP. Furthermore, an additional 300 million new urban residents are projected in India in 2050. At the same time, India is faced with acute shortage of quality housing supply across its urban agglomerations. Various initiatives undertaken by the government at the centre such as 100 Smart Cities, Housing For All, and GST are expected to drive growth in the real estate sector, which has attracted investment over the past few years due to rapid urbanisation, positive demographics and rising income levels.