Real Estate Sector Eyes Industry Status, What's In It For A Buyer?
In India, real estate is the most coveted among every investor. In the last decade, we have experienced one of the highest peaks in the sector. But at the same time the sector has witnessed one of the gloomiest phase, too. The slowdown in the sector came during the time when the entire world gripped with the recession. This brings uncertainty in the real estate sector and buyers started losing faith in developers. From rising home costs to increased home loan rates, the overall financial market was bleeding and the impact could be very well seen in real estate sector too. When the sector was booming many small-time builders and contractors made money out of residential housing projects and other properties. Because of the financial turmoil, these builders could not survive and disappeared. This led to the rise of long-stalled inventories, project delays, not giving possession in time and many other hurdles for buyers. Buyers lost confidence and stopped believing in developers.
All these uncertainties and irregularities made this sector distant from receiving the industry status. To regain the buyer's confidence, it is not only developers; government and other private players should collaborate to win the industry status in the coming year.
Why is there such a need?
Every sector has its own set of parameters, rules and regulations. But real estate is one such sector which is highly unregulated and requires planned management. Dhiraj Jain, Director, Mahagun Group points out "Industry status has been a long pending requisite for the real estate sector and there can be multiple reasons attributed to it. The first of them becomes unorganised nature of the country's real estate which needs to be organised and brought under one central agency." Jain further mentioned, "although, RERA will solve this purpose greatly there still will be gaps to fill and this can be done only if we get an industry. Under the current government, initiatives are aplenty and hopes can be bestowed that the much-needed industry status would be given sooner than later in order to revive the sector and prevent it from facing a slump."
How will it get benefitted?
After all the uncertainties, investors still prefer investing in real estate and find it one of the safest options to make their investment fruitful. It becomes more necessary for developers and other market players to make the sector stable and sturdy for a long run. "Industry status has been the longest pending demand of the real estate sector. Being a leading contributor to the country's GDP, one of the highest employment generators in the country, this sector needs a proper overhaul. This is possible only when you have the industry status aligned with the sector. Just going by the sheer numbers, being the end user for over 30 industries, the real estate sector needs to be accorded the industry status to assure proper channelisation of work and easing the way of doing business in the sector. This will not only organise the much-unorganised sector but also enable the developers to borrow at much lower rates, allowing them to deliver at lower costs than what they do now" says Deepak Kapoor, President CREDAI-Western UP & Director, Gulshan Homz.
Government should take more steps to manage the irregularities
Over the last few years, the government has been trying to cleanse the system to help the real estate sector recover its lost status. Ashok Gupta, CMD, Ajnara India Ltd. points out, "with almost 30 allied industries being attached to this sector and the industry status missing, there are lot many benefits this sector is missing upon. Till now, we have seen RERA and GST getting a green light but still considerable work needs to be done on granting industry status to the real estate sector. In general opinion, the government and authorities should work very amicably in order to refine the sector as much as possible and the first step towards this can be the accordance of industry status."
Indian real estate is transforming for better
Now, the real estate sector is on its recovery stage which allows buyers to look forward for a positive spin. Developers are equally trying to cope up with constant transformation. Rajesh Goyal, Vice President CREDAI-Western U.P. & MD, RG Group says, "a rapidly transforming real estate market was in dire need of a regulator to check irregular planning, delayed deliveries and improper costing which was solved by the formulation of RERA. With continuous efforts of the fraternity, things are slowly getting back on track and people are becoming increasingly aware of the actual scenario that persists in the market.” The sector witness a lot new things in the field of building construction and other project developments. Goyal also adds, “newcomers entering the market are breaking new ground and setting benchmarks for experienced players. However, granting industry status to the real estate sector is a long pending demand, which is much required to check the gross irregularities that persist in this sector."