Bengaluru: A year after the Real Estate (Regulation and Development) Act, 2016, (RERA) came into force, homebuyers are slowly returning to the market on the back of a price correction, pent-up demand, easier payment schemes and increased credibility instilled by the new regulatory regime.

To be sure, RERA is still a work in progress and, at best, still patchy in implementation. But what it has done is steered the sector, infamous for its lack of transparency, towards the right direction. It has pulled down the pace of fresh project launches and pushed developers to first build and sell what they have.

“Sales have gone up across cities in the March quarter and it’s a combination of factors that worked, but what RERA did is to instil credibility in the minds of the consumers after many lost faith in developers," said Pankaj Kapoor, managing director, Liases Foras Real Estate Rating and Research Pvt. Ltd.

In the Delhi-National Capital Region (NCR), the property market worst impacted by the slowdown, sales grew in the consecutive December and March quarters and unsold inventory is now lower than in the Mumbai Metropolitan Region (MMR).

“Buyers’ loss of faith was a major cause of concern in NCR but end users are back, though it’s early days of recovery," Kapoor said.

Overall sales in the top seven cities grew 12% in the first quarter of 2018 over the preceding quarter, indicating that serious homebuyers are back, attracted by the new environment of transparency, accountability and financial discipline, said Anarock Property Consultants in a note.

Around 49,200 units were sold in the quarter, with NCR, MMR, Bengaluru and Pune together accounting for 80% of the sales. Only Chennai saw a 12% drop, Anarock said.

The purpose of RERA was to create the legal groundwork to make the sector consumer-centric, promote transparency and improve disclosures, register all projects and make all stakeholders, including property brokers, accountable, and create a mechanism to address errant developers.

“For the first time, the end user has easy access to property-related data and information, creating a transparent interface. This translated into an increase in bookings and queries at the developer’s end. The strong latent demand in the last two quarters of 2017-18 is proof of the same. Of course, there is much more to be done collectively in the real estate community, but RERA has set the tone for the future—transparency and accountability," said Ashish Puravankara, managing director, Puravankara Ltd.

One of the biggest takeaways of the new regime is that it has created a level playing field where all developers are treated equally and customers can evaluate and decide
based on available data and not just by perception, Kapoor said.

There are teething issues. Many of the states still don’t have a proper website and the redressal mechanism is not entirely in place.

The issues ailing the real estate sector run deep and RERA has to figure out a way to address them—this will be a challenge. For instance, in a recent interview, Gautam Chatterjee, chairperson of Maharashtra Real Estate Regulatory Authority, said out of 13,000 ongoing projects registered, around 8,000 were behind schedule. If these are not completed, the regulator has to find a way to finish these projects.

“With RERA scheduled for full implementation this year, developers are expected to focus on delivering ongoing projects in time and avoid penalties for non-compliance," said a 30 April Colliers India real estate outlook report.

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