RERA Effect: Big Developers Towering Realty
Though over two years have passed since the Real Estate (Regulation & Development) Act, 2016, has been enacted, the market is still recovering from the side-effects of consumer-friendly law. But, the top brands in the sector have gained the most since the law came into effect, says a report.
The report showed that the top 10 developers across seven major cities have recorded more home sales and launches as compared to small and medium-level developers. According to the report, the total market share for the new launches in the top cities have doubled in the past financial year to 40 per cent in FY18 from 24 per cent in FY17. A similar trend is visible in sales for the past three years as the market share for such listed developers have grown from 19 per cent in FY16 to 30 per cent in FY18.
The finding also coincides with the quarterly results announced by some of the branded names, including Godrej, Lodha, etc. While Godrej recorded the net profit of Rs 34 crore for the quarter ended June 2018, Lodha developers reported a 32 per cent rise in the profit in last fiscal at Rs 790 crore. For Sobha Group, a brokerage firm has predicted net profit to have increased by 17 per cent in this fiscal.
The turn of events has many causes. Better compliance and the trust value that the brand holds as the unorganised market is shrinking in size is the top reason. Fly-by-night operators are being eliminated from the market, slowly but steadily. Therefore, buyers are entrusting their money with those who have a good brand presence in the market.