Realtors to face cost pressure post land bill: Edelweiss

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26 Aug, 2025 12:21

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The cabinet has finally approved the Land Acquisition & Rehabilitation Bill. The bill will be introduced in the parliament on September 7. Once it is introduced, it could be sent to the Standing Committee for consideration.

Speaking to CNBC-TV18's Latha Venkatesh and Gautam Broker, Aashiesh Agarwaal, real estate analyst at Edelweiss, said that the developers are likely to face many issues like affordability and cost pressures once new land acquisitions become a lot more expensive after the final bill is rolled out.

Land Acquisition Bill: All you should know about it

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: Would you start by marking down all the real estate companies or would you sift between them?

A: The new land acquisitions will become a lot more expensive now and there can be significant amount of issues that developers will face while acquiring newer land when it comes to rehabilitation and resettlement (R&R). However, we must also take into account that many developers have enough land bank for the next 25 to 40 years. So these developers, who are sitting on existing land banks, might actually tend to benefit over the longer run.

In the near term, we are facing multiple headwinds in terms of title equity environment, which is a difficult approval scenario of audibility issues. So we have near term concerns but from a longer term perspective, there many listed developers like Oberoi Realty and Phoenix, who are sitting on existing land banks. We do not see anything changing for most of these developers from a near term perspective, which is a negative for them.

Q: Among the listed universe, which companies do you think are still to buy land? Amongst the stocks that you cover, is there any company that could be materially impacted if the bill is passed?

A: The only developer that I could readily look at is Oberoi Realty, which has to do some large land acquisitions. But if they are acquiring a piece of land, then they will take into account additional factors of resettlement. Oberoi is looking at some land parcel within the Mumbai metropolitan region, which is industrial land.

So, the cost of rehabilitation would get accounted at the purchase price. From a very near term perspective, the industry is facing a situation, where affordability is an issue.

There are pressures in the selling prices. The cost pressures are showing up, and hence, margins are constraints, which would essentially mean that land prices would continue to be soft and that is why we continue to like Oberoi. I don