Real estate regulator likely to transform sector
Real estate market of India seems to be eagerly awaiting the much-hyped real estate regulatory bill, which is presently being examined by a Parliamentary standing committee. It is expected that the regulator will be introduced sometime next year.
Once the committee tables its report on the real estate bill suggesting amendments or changes, the Cabinet has to approve the changes, only after which it will be taken to the Parliament.
Bill to bring in radical change
The bill is believed to bring in transparency and accountability to the sector. It would benefit both buyers as well as developers. According to sources, many associations are voluntarily coming up with self disclosure norms. Also, consumers have been trying hard to get certain facilities to be considered as their rights. All these things are evident that even during the course of preparation, the bill is bringing in a sigh of new hope and it is clear that it is leading towards a major shift in the system.
Bill to protect buyers’ rights
The draft bill has many good measures which safeguard the consumer. It even provides a forum where the consumers can approach for help. Besides this, the bill supports promotional activity by the state government. It also aims to bring in the intermediary bodies like development authorities, certifying licensing bodies, municipalities, etc into self-discipline. With better improvements, the bill would prove to be an incredible boon to the realty market.
Need for better infrastructure
Good infrastructure uplifts the real estate demand. If residential projects are planned in the outskirts of a place, then it should be ensured that better infrastructure facilities also have to be made available in those areas. To support this, the ministry of urban development also gives a lot of grants for infrastructure development. The developers pay external development charges and even tie up with local municipalities to provide that. The municipalities are required to strengthen their revenue base by improving their tax collections and other means.
Growth ahead
As there is a huge shortage of housing units in India, it is expected that the enactment of the new bill would boost the sector’s growth at least for the next few decades. There is a lot of demand for housing, particularly from the mid-income section of buyers. It is pretty much essential that the state government has to check and contribute timely towards the healthy growth of the sector. More and more projects have to be developed to cater this demand, say realty experts.
Affordable housing projects in demand
Affordable housing projects are witnessing increasing demand from the poor and the lower mid-income buyers. Observing this demand, many developers have expressed interest in developing projects in this category in states including Maharashtra, Rajasthan, Andhra Pradesh and Karnataka. Experts opine that housing boards and private developers have to come up with better initiatives to cater to this demand.
Meanwhile, the government has to set off initiatives with regard to better utilisation of land, providing easy access to land to the developers access to land and to cheaper financing techniques (through banking sector, FDI or ECB) and others.
In Mumbai and Delhi, where land availability is pretty low while the rates are extremely high, there are many challenges to provide affordable housing projects.
It has been observed that in the last few years, most of the states tried to provide land to the real estate, wherever it is available. The fact is that land is not available even with the state government and municipalities and so it has to be mobilized by developers, and they have been doing it too. What the government can do is to allow more optimal usage of this land by allowing higher floor space index (FSI), allowing transfer of development rights (TDR) facility and so on, which would help in enhancing the gains in the available land parcels.
