The RERA Effect on Indian Real Estate Sector: Review by Anuj Puri, Chairman - ANAROCK Property Consultants.
It was not the magic wand it was hoped to be. However, over the past two years, the Real Estate Regulatory Act (RERA) has brought more sanity - and the return of consumer power - than seemed possible in such a short time. The real estate sector is still struggling with it and the Act is very much work-in-progress in many states, but RERA nevertheless hangs like a sword of Damocles over a previously unregulated industry. Eventual compliance across the board seems inevitable.
According to the latest readings on the Ministry of Housing and Urban Affairs (MoUHA) website:
In previous years, strong political will was often highlighted as the most necessary catalyst for change in a country like India. It has arrived - Modi 2.0 has displayed a single-minded focus on many fronts, and not least of all in its promotion of affordable housing. There is little reason to second-guess this government's will to see its goals to fruition.
Nevertheless, developers face several roadblocks to adopting the affordable housing mantra wholeheartedly. Where will the necessary land in central urban areas come from? When will the basic infrastructure necessary to make the cheaper peripheral areas viable for affordable housing be built?
As India embarks on another year of independence, the country's real estate sector has a lot to be grateful for, a lot to hope for - and still a lot to worry about. Amidst the dual challenges of liquidity crisis and stuck projects that hang like persistent thunderclouds over the sector, we nevertheless inch closer to the ultimate goal of Housing for All by 2022.
Along with the resale homes market, luxury housing took the hardest hit after demonetization. The Government’s continued focus on affordable housing coupled with the surgical strike on high-value currency denominations in November 2016 took the sheen off luxury housing for two years in a row. As a result, developers restricted new supply in the luxury category across the top 7 cities.
However, ANAROCK's most recent research indicates that while the affordable and mid-segment housing sectors continued to dominate the overall supply in H1 2019, luxury and ultra-luxury housing also saw a resurgence.