One set of developers are happy that the RERA would boost Indian real estate business by around 25-30 percent while other set is of the opinion that the bill has plenty of loopholes
With an aim to boost Indian real estate sector by around 25-30 percent, control black money being stashed into the business, increase FDI flow into the national realty and stop fraudulent activities being done by hordes of middle men involved into the sector, the Real Estate Regulatory Authority got implemented on May 1 in India. The new development was hailed by majority of the Indian realtors but there were some developers who had their fingers crossed as the authority fails to address some major issues like dual regulation in districts where there already exists an authority looking after the sector, leaving the lease issue untouched etc.
Naveen Raheja, Chairman, NAREDCO said, “The real estate sector contributes around six percent of the Gross Domestic Product (GDP). In the wake of this long awaited Regulatory Bill (RERA), I expect further boost in the sector to the tune of around 25-30 percent annually.” Means our contribution to the Indian GDP would grow from 6 percent to around 7.5 percent.
Asked about black money loops getting choked into the sector due to this legislation Raheja said, “Black money is in sync with the white money. Since, there have been various majors being announced by the union government to bring black money into the main stream, I expect the black money coming into the real estate through white gates and giving an additional boost to the realty sector that would be in sync with the growth we are expecting due to the legislation.” If we go by Raheja’s expectations, then the contribution of the Indian Real Estate sector into the Indian GDP in next two to three years can be easily found into the double digit numbers.
On Real Estate sector attracting Foreign Direct investment (FDI) Raheja of NAREDCO said, “Real Estate is currently the fourth-largest sector in the country in terms of Foreign Direct Investment (FDI) inflows. Total FDI in the construction development sector during April 2000–May 2015 stood at around $24.07 billion.” He said that in the wake of slowdown in Euro Zone and other developed economies global investors have been looking for ideal destination for investment.
Standing in sync with Raheja; Kushagr Ansal, Director, Ansal Housing said, “Indian economy has already witnessed a massive FDI inflow over the last one year specially, riding with the reforms and amendments made. Real Estate Act will promote transparency and fair dealings in the sector; something that every entity looks into while entering into a new country. Real Estate sector is a big contributor towards FDI inflow and we are anticipating an annual growth in FDI inflow by 7-10 percent.”
Getamber Anand, President, CREDAI — Realtor’s apex body in India said, “The bill would bring credibility to real estate business and endorse our demand of giving infra status to housing.” He, however, said the bringing ongoing projects under this bill would lead to stoppage of work on the site in order to ensure compliances.
“Real estate sector is entirely sentiment driven in India and this is very much visible looking at how the market is behaving today. Real Estate Act holds high importance for a country like India, where opportunities are in abundance and starting such a business is easy. Real Estate Act will now ensure fair play and protect interest of the buyers, something that was missing earlier. The lost demand will pick up very soon and we’ll have a much improved market few years down the line”, avers Deepak Kapoor, President CREDAI-Western UP & Director, Gulshan Homz.
“It has been always observed that good things are hard to digest initially and this will be a case here as well. With each transaction to be monitored and a regulator sitting to supervise, fraudulent activities will be completely eradicated which will also see a lot many businesses making exits. This might reduce the supply for some time and demand will now come roaring, riding with security and credibility in the sector”, explains Rupesh Gupta, Director, JM Housing.
“Developers and channel partners, who have been working ethically, will continue to put their best efforts, as they don’t have to worry about anything. But those who have been in the shady business will become invisible very soon. These phases will dent the demand in the realty sector for some time, but when it will revive, there will be a much bright future”, elucidates Vikas Bhasin, MD, Saya Group.
“Real Estate Act has been drafted and executed keeping the general public in mind. This Act will safeguard the interests of every buyer which will allow a transparent and secured route to transact in future. Once the Act becomes fully functional in each state, grievances will not remain unanswered, and will come with a definite solution. This will help the buyers to rebuild the lost demand in the market and allow realty sector to be an even more ethical contributor towards Indian economy”, enlightens Rakesh Yadav, Chairman, Antriksh India.
“The work to sanitise the realty sector has begun with still a lot of scope to further promote this sector. Pricing and timely possession factors are ones that hurt the most which can be answered properly when developers are able to build on time and build at decent cost. Thus, Industry Status and Single Window Clearance are yet to be looked upon and we are hopeful of their passage soon. Overall, the fraternity has warmly welcomed and accepted the Real Estate Act and is looking forward for its effect to get visible soon”, concludes Rahul Chamola, MD, One Leaf Group.
However, there are some loopholes that have not been taken care of while drafting the RERA Bill, said some of the developers.
Ankit Aggarwal, CMD, Devika Group said, “There are still several loopholes in the existing Real Estate Act. In districts where there are already authorities existing, presence of a regulator might create conflict of interests. There needs to be a clear demarcation for the roles of authority and the regulator, as otherwise, buyers will be in a haywire situation.”
Zeroing upon the lease holding issue; Rahul Chamola, MD, One Leaf Group said, “One of the major cause of concerns that will arise in regions with leasehold land will be the expiry of lease, where the ownership will be lost after a specified timeline. Every buyer buys a property and registers it to become the owner, but in cases where the authority has sold the land to builders on lease, will make the owners loose its ownership someday. Real Estate Act should have taken this issue into account, as homebuyers are the ones who will be the ones to bear the brunt.”
Credit : http://www.dayafterindia.com/