The Act mandates that every state have to draft its own respective regulations within 180 days and establish a Real Estate Regulatory Authority and an Appellate Tribunal within a year.
Real Estate Regulatory Authority - RERA is one of the most debatable topic in last couple of months in Indian real estate market. As soon as it became a law, it received a lot of applause from buyers. In the sales pitches, the agents have already started making a claim that the project they are selling would be a RERA compliant project. Amidst this entire buzz, the moot question for the buyers remains the same whether it is a right time to buy or not? General buyer is still in confusion about the actual impact of this regulation and about his own home buying decision.
If we talk about the market dynamics, this move shall undeniably change demand and supply scenario in the real estate sector. Demand should benefit from new expectations raised by the Act. Indeed, sentiment among buyers already appears to be turning more positive. This is good for the market in both the short and the long term. On the supply side, expect a drop in new project launches in the short term. This is because of the fact that developers will wait to see how the new norms pan out and how other projects fare. Secondly, fewer projects will be ready for registration, as it typically requires 6 to 24 months for projects to get all approvals necessary to commence construction of a project. The increased demand and limited supply will actually help to ensure equilibrium in all the major cities suffering from high-unsold inventory. Though end-users have been waiting patiently for more price correction, the fact is that, the prices have already bottomed out and any further correction is unlikely.
The Act mandates that every state have to draft its own respective regulations within 180 days and establish a Real Estate Regulatory Authority and an Appellate Tribunal within a year. However, only a few states have started working on these guidelines. It is prudent to know for a buyer that although it is a right step in right direction, it will take some time to be a reality. Thus, waiting to get it implemented may not be a wise decision as it may result in potential loss of opportunity.
Improvement in macroeconomic sentiments coupled with better job prospects have started bringing in returns for the commercial sector and it is only a matter of time before the residential sector revives too. Investors too have started pumping funds into the residential sector and some developers in cities such as Bengaluru, Hyderabad, Pune, and Chennai have already received funds for future supply pipeline.
With interest rates already all-time low and there are plenty of options available in the market, this festive season seems to be the apt timing for buying a home. A prudent approach would be to do your own due diligence about the credentials of the developers, approvals, and title of land before executing a deal.
The views expressed in this article are solely of the author.
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