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2016: The real estate story

Friday, December 02, 2016

The year 2016 saw the government churning out new drafts and resolution, which have had a major impact on the real estate market. Suraj Uchil does a round-up

December is here, and in a few days’ time we will usher in the New Year. It’s a good time to look back at the significant developments in real estate since the start of the year.

The first important move was the passing of the Real Estate Regulatory Authority Bill (RERA) in the parliament. This was done with the view of holding the developers and builders more accountable and also to bring about a certain level of transparency in the system. With RERA in place, the builders would now be forced to finish up their projects in time and also hold them accountable for all the promises they made to the clients and failed to fulfill them.

More accountability
Rahul Panvelkar, Managing Director at Panvelkar Group believes that due to RERA there will be an intense clean up in the real estate market. “Only the real and genuine builders will be left in the market. People who are in this industry to only make money will be flushed out by RERA. This move will also help build the trust factor in the minds of the buyers as the builders will have to divulge all the necessary information to them and thus cannot keep them in the dark about any aspect of the project,” he explains.

“One of the other major benefits of RERA would be that the builders won’t be allowed to use the money from one project to start another one. One of my relative’s under-constructed house was stuck for five years as the builder had invested that money into funding his new project. These things will not happen anymore and it’s a much welcome relief for the middle class people,” explains Sai Shankar, an IT professional from Mumbai.

The other aspect that completely shook up the real estate market was the government’s decision last month to ban the usage of Rs 500 and Rs 1,000 notes in the market, rendering them invalid within a span of days. While this move has garnered mix response from sections of the media and public, people in the real estate market are very happy about the move. Almost everybody in the real estate market feels that demonetisation will bring about positive changes in the market.

Clean-up job
“Builders who were selling flats and asking for money in cash i.e. black money will now realise their folly. Many builders were parley to this. This move will now help clean them out from the market. The good and reputed builders always dealt in white money, making sure that their clients paid in proper legally accepted methods. So they have nothing to worry,” adds Panvelkar.  

Jitendra Mehta, Vice President, MCHI Thane Unit, also feels demonetisation will lead to the sector become even more transparent. “Buyers will now be assured that since the payment will be done in completely legal ways, the money can’t be misused by the developers. Also, since the drive has led to massive amounts of cash being deposited into the banks, the opportunity to get loan also becomes easier for the buyers. All these moves will help garner more sales in the coming months,” he says while adding, “Almost close to 150 small scale industries are directly dependent on the housing industry for work. So, the more houses that are built, the better it is for all those people working in those industries."

Though the moves by the government will take its time to have permanent effects on the real estate market, people in the industry are already positive about the way forward. And, they believe that this is just a start, and the New Year will definitely have good news in store for them.

“Only the real and genuine builders will be left in the market. People who are in this industry to only make money will be flushed out by RERA. This move will also help build the trust factor in the minds of the buyers as the builders will have to divulge all the necessary information to them and thus cannot keep them in the dark about any aspect of the project.”
Rahul Panvelkar, MD, Panvelkar Group

“Almost close to 150 small scale industries are directly dependent on the housing industry for work. So, the more houses that are built, the better it is for all those people working in those industries."
Jitendra Mehta, VP, MCHI Thane Unit

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