Canrealty befree from fraudulent practices?
REFORM This Independence Day, stakeholders in the Indian real estate industry share insights on what the industry has set itself free from
Milestone birthdays are occasions to review, assess andintrospect. AsIndiaturns71 this Independenceday, weaskacrosssection of people on what is the one thingthattheindustryhasfinally freed itself of andwhatisthefreedom it still yearns for!
According to 42 year old GurgaonbasedmanagementconsultantDevanshDutta,“Thegovernment has aggressively pushed a culture of transparency through measures such as demonetisation, Goods and Services Tax (GST), Real Estate (Regulation and Development) Act, 2016 (RERA) and Benami Property (Prohibition) Act. These landmark policy and legislative changes will eventually set the industry free from corrupt practices and help restore our confidence.”
ForSamridhiTalwarwhohad invested in Noida in one of the projects that went in for Insol- vency proceedings and liquidation andhadfearedtheworst, the system did come to the rescue.
“Theprojects seemedafarcry fromcompletion. Butwhenjudiciary took a tough stand against big names such as Jaypee, Unitech, 3Cs, Amrapali our faith is restored. We yearn for freedom fromsuchunscrupulousbuilders and this kind of example-setting should send a strong message to defaulters.”
She adds that the thing to cheer about and celebrate is the newInsolvencyandBankruptcy Code (IBC) whereby the NCLT treats homebuyers as financial creditors.
Pendingdeliveries of past projects, has been a significant pain point in the last several years. AccordingtoareportbyPropEquity, housing projects in India worthRs3.3lakhscrores ($47 billion) are awaiting execution. Many of these projects were launched2009onwardsandmost of these are delayed by eight years already, stalled at struc- ture level andmarketingofit has stopped.
According to PropEquity Founder and MD Samir Jasuja, “Freedom from unethical practices of somedeveloperswhotend to bring a bad name to the entire industry is the need of the hour.”
He adds that fortunately, we are nowwitnessing green shoots of recoveryfortheprojects which are not stuck and sales have increased for ready and nearing completion projects. Developers concede that there have been “quite afewrottenapples” andas Avneesh Sood, Director, Eros group says, “I think it’s time for us the developers to make the homebuyersfeelfreefromallthe unpleasant notions that they have for the builders. With the introduction of RERA, it has helped us to break that notion. This Act has given wings of freedom to our homebuyers.”
Aninvestorfrenzyintheearly part of this decadeinspired aprolonged focus of developers in launching lifestyle projects tar- geted at the premiumsegmentat progressively higherprices. This later becameunsustainableeven as the market moved from an investor’s paradiseto anenduser market.
Thenotionofsizeofhomeshas undergoneaseachange. Thereis freedom from earlier held notions of “the bigger the better” and “lifestyle homes” to “small but functional homes.” Today, smallis beautiful. Therehasbeen a concerted effort by developers to decrease ticket sizes by con- stricting unit sizes and reducing prices in responsetothemarket’s demands. It’s a period of stabilisation, right-sizing and rightpricing of new residential product, as a report from Knight Frank points out.
Moreover the government’s ‘Housing for All scheme by 2022 and the granting of infrastructurestatustotheaffordablehousing sector havealso provided the necessary impetus to these under-rated and under-served segments of the market.