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

HT Estates - - FRONT PAGE - Nam­rata Kohli letters@hin­dus­tan­times.com

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.

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