Will prices go up be­cause of RERA?

HT Estates - - HTESTATES - Van­dana Ram­nani

The Real Es­tate Reg­u­la­tory Act will push de­mand for hous­ing and pre­vent project de­lays for in­creased home­buyer con­fi­dence. How­ever, since projects can­not be launched with­out prior ap­provals, the re­sul­tant de­lay is likely to push up hous­ing prices, say de­vel­op­ers.

Fewer project launches would mean de­creased hous­ing sup­ply and more ex­pen­sive hous­ing. Pos­si­ble so­lu­tions, most de­vel­op­ers feel, is to launch projects once the su­per struc­ture is ready. In fact, some builders are go­ing ahead and con­tem­plat­ing launch of com­pleted projects to be sure that they com­ply with all RERA norms when they are in­tro­duced next year.

Con­sid­er­ing cur­rent mar­ket sen­ti­ments, how­ever, real es­tate ex­perts have a dif­fer­ent view. They say prices will sta­bilise and not in­crease.

While ap­prox­i­mately 4,500 hous­ing units were launched dur­ing the peak years of 2012 and 2013, the av­er­age num­ber of new launches this year was close to 3,000 projects. “New launches may prob­a­bly re­duce fur­ther once RERA is im­ple­mented. There will be a lull ini­tially and a slow­down in the num­ber of new launches which may come down to 2,000 launches in a year’s time,” says Pankaj Kapoor of Li­ases Fo­ras.

Cur­rently, an­nual sales to­tal 2.5 lakh units against 11 lakh of un­sold in­ven­tory across ma­jor markets in the coun­try. If the mar­ket were to work to­wards at­tain­ing ef­fi­ciency post RERA, sales should ide­ally be around 10 lakh units, which means a five­fold in­crease in sales, which is not likely to hap­pen. So, at any given time, there will al­ways be a sur­plus in the mar­ket. Enough in­ven­tory will be avail­able as pur­chas­ing power of peo­ple is not likely to im­me­di­ately go up to en­able them to buy prop­er­ties at pre­vail­ing high prices. This af­ford­abil­ity gap will en­sure that there is enough in­ven­tory which in turn will sta­bilise prices, not in­crease it, says Kapoor. Read the full story at www. hin­dus­tan­times.com/realestate/

BURHAAN KINU /PIC­TURE FOR REP­RE­SEN­TA­TIONAL PUR­POSE ONLY

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