5 key takeaways from 9th Annual National Association of Realtors India Convention

Ashwini Priolker CNBC-TV18

It was a buzzing morning at the 9th Annual National Association of Realtors (NAR) - India convention in Mumbai. More than 1,200 realtors and developers across India were present, belying the general belief that the residential real estate market is down in doldrums! The focus at the convention was on the three tsunamis that have hit the real estate sector in the past one year namely demonetization, RERA and GST. Here are 5 takeaways from the convention.

1) RERA Harsh on Brokers: No surprise that the Real Estate Regulatory Authority (RERA) was the main topic of discussion at the conclave. The realty broker community did feel that the RERA rules were unfair to them. "The penalty for the brokers and developers is the same. This is too harsh especially when the broker manages to get only 2 percent commission. Even the registration fee is very high", said Ravi Verma, Chairman NAR India. This was countered by industry veteran Anuj Puri, Chairman, Anarock Property Consultants, who has recently moved into residential business in India. He felt that RERA has been able to weed out unscrupulous fly-by-night brokers, leaving more room for serious professionals. “For the very first time brokers have been recognized as an industry,” said, Puri.

2) Dilution of RERA Rules by States: Industry leaders made no bones that RERA is simply not the last mile solution to all the problems plaguing the sector. In a strongly worded statement Nirnajan Hirnandani, MD, Hiranandani Group, said “RERA is a good law for all the future projects. But the problem related to ongoing projects is deep rooted, like cancer. These cannot be solved only with RERA. We need to find other solutions like alternative funding mechanisms and these projects to be taken over to be completed, with government intervention."

3) Impact of GST on Homebuyers: The implementation of Goods and Services Tax has left Real Estate Industry with more questions than answers. The tax neutrality of GST on prices of homes was challenged. “GST in its current form cannot be tax neutral especially in bigger cities like Mumbai where the prices are more than Rs 10,000 per sq ft,” says Boman Irani, Chairman & CEO, Rustomjee Group. So, buyers will have to be prepared to shell out more in bigger cities was the verdict.