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propfrill Expert Opinion

  • 27 May

    2017

    RERA Impact A rising competition in Real Estate market

    With RERA in effect there will be a high impact on on-going projects if they are included. There will be a lot of confusion which will not only delay projects but will also lead to creation of lot of issues. Any law should be applied prospectively and not retrospectively. Too many projects at various stages will be impacted and there could be a major upheaval in the market if not addressed appropriately. The law should rather state a corrective course of action rather than penalize on-going developments which seem to have deviated from the new law and to understand the consequences for consumers, developers and financial institutions which are all part of this play. Cost for developers will increase as sales can only happen post registration which is possible only post approvals. With higher holding costs, these increases would eventually be transferred to consumers and hence prices are bound to increase. In Earlier days brokers were not able to assure that developers will stick to the timelines promised at the time of selling a property. But now they will have to register with the state-level RERA. This will make them accountable for their commitments. If the promoter has not registered the project in compliance with all necessary regulations, real estate agents would not be allowed to facilitate such transactions. RERA has the right to disqualify/reject the application of an agent for registration. Since the developer has to file the status of various approvals and information on the status of a piece of land on which housing units are coming up, brokers will also know these details. This will help them avoid making false claims to the buyer. With RERA, there will be a consolidation in the market and hence only fewer players may exist. This is not good for market as prices for consumers are bound to increase with decrease in competition. Presently a high competition keeps the prices in check and small developers who were able to offer additional buck might cease to exist and buyers will have limited choices to choose out of.
    Company : PROP FRILL    Posted by : Satish Singh

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