Housing and the Real Estate Industry
On the one side Government wants to do right by the customer and therefore the RERA law. As per above a lot of small buyers have their investments stuck creating thereby the exactly opposite situation.
We also speak of jobless growth of the economy. Real Estate industry is one of the largest employment generators - the body blows of the above changes has resulted in a complete downturn in the industry. New hiring is non existent, layoffs are common, projects have been prioritized based on balance effort required for completion, consultants are without work etc.
Customers who have invested earlier want to exit. Exiting earlier investments has become difficult since market values have crashed.
It is high time Government took notice and stock of the situation and take steps to help the industry get back on its feet. Among them could be:
1. RERA to be designed afresh to make it fair to both parties. Approvals and time required for same to be factored in. Strict guidelines for approval time needed by Government at various stages. Penalty on the approving agency as well as compensation to builder and his customers from Government for delays from their side.
2. Improve financial attractiveness to end customers so that a pull is created - incentivize real estate investments - reduce taxation, increase tax benefits, reduce capital gains, reduce stamp duties
3. Introduce State owned Title insurance for land to convey safety in transactions to end customers
4. Implement on war footing PID tags - property identification tags which are already in process in some States.
5. Eradicate benami by linking all property registration to Aadhaar numbers retrospectively. In the event that such benami ones are found, ensure ownership reverts to State and auction these at 30% discount on market.
6. Create fresh avenues for project funding - long term funding avenues for long term assets so that there is no mismatch in expectations and projects getting unnecessarily labeled as NPA. Involve pension funds and insurance funds for this. Attract foreign debt funding on similar long term basis. India's growth story is credible.
7. Create insurance for project delays so that builders have a fair chance to complete projects within time-frames and costs.
8. Encourage joint ventures and joint development rather than taxing the life out of them. more
RERA is still being manipulated by builders to make one sided agreements and putting buyer at risk and mercy of builder and adding lot of extra charges too, hope RERA can better monitor and bring more transparency for buyers, and the cash transactions also reduced more and more
Builders have spoilt all the market all these years and they must come forward to be law abiding, built as per sanctioned plans, and stop cash transactions too