The Indian real estate industry, particularly the residential sector, was in the past correctly characterized as being unregulated and unorganized with unreasonable project delays and poor quality of construction being definitive aspects.
The arrival of the Real Estate Regulatory Act (RERA) in March 2016 brought in a paradigm shift in the sector and metamorphosed it into a more mature, systematic and regulated one.
RERA came into force on May 1, 2017, and is meant to be a homebuyer-friendly regime which will address their grievances and promote transparency, efficiency, financial discipline and accountability in the sector.
Indeed, buying a home is not only the most cherished dream for many Indians but also one of the biggest long-term financial commitment in the buyers’ lifetime.
Considering this, there are 14 important guidelines incorporated in the RERA umbrella to prevent unscrupulous players from raining on consumers’ homebuying plans:
You read of it in advertisements and on hoardings, and hear of it in radio jingles and TV commercials – the ideal home, or ‘dream home’.
It makes you wonder if you’re living the lifestyle you truly deserve, if your previous home purchase decision was too hasty and if there is a chance you could do better.
The ‘ideal home’ is a ubiquitous marketing concept, and it haunts buyers before and after a property purchase. But is there really such a thing in India?
The ‘Ideal Home’ Paradox
By and large, the concept of an ‘ideal’ home is very relative in this country. While everyone carries a picture of their dream home in their hearts, that image usually cannot translate into reality in this country.
People long to stay close to nature, yet also close to the excitement and opportunities of the city. They long for a home in an environment unpolluted by noise and vehicle emissions, yet depend heavily on public transport and roads to use their personal vehicles for commuting to and from work.
Real estate development remains a highly lucrative business line, which is why most builders retain skin in the game even in the face of strong market headwinds.
However, real estate development also remains a highly capital intensive business, and among the many new market truths that RERA has brought to the fore, the fact that only well-capitalized players will endure going forward stands out.
The ‘time-honoured’ practice of raising funds from the market via ‘pre-launches’ has now become untenable.
Did demonetisation erase black money in real estate?
Just a couple of months ago, demonetisation appeared to have taken all the remaining steam of our Indian real estate’s sails.
Sales in the significantly cash-driven resale homes market nosedived and prices in this segment declined by as much as 20-25%. They were already trailing primary sales prices by 25-30% in the investor-driven residential corridors before demonetisation.