Following passing of the RERA Act, conditions in Indian realty sector have improved, but the challenges are continuing. One of the major challenges is handing over of the projects. Because of the delays, the credibility of consumers in developers is wearing thin causing immense losses to both consumers and investors. Not able to get clearances from government authorities for realty projects, money tendered as advance by customers is being inadequate to fund the project, sometimes getting the customers’ money misused and diversion of the funds to other purposes have been causing delay in grounding of the projects. Ultimately, they would have a telling impact on real estate industry. The realty sector in the state has improved to an extent following passing of the RERA Act in 2016.
According to data furnished by PropEquity, an online real estate data and analytics platform, the realty residential projects in metropolitan cities are being delayed from 10 to 18 months on an average. Earlier, the delay used to be between 20 and 48 months. According to the RERA Act, to sell properties in a project the RERA approval is necessary. If the project is not completed on time, the developer has to pay fine to the RERA Authority. The RERA also allows for inspecting whether the money collected from flat buyers is being put to proper use or not. Because of these guidelines, accountability among the realtors increased and a buyer-friendly atmosphere is created. Because of all this, there is remarkable progress cutting down on the delays.
Prior to the RERA Act, delay noticed in realty projects in Hyderabad was at least 18 months. With the advent of the RERA, it was cut down to 10 months. In Delhi the delay was cut down from 47 months to 17 months; in Mumbai, the delay was cut down from 27 months to 13 months; In Bangalore, the delay was reduced from 23 months to 12 months; in Chennai, the delay was reduced from 21 months to 12 months; in Pune, the delay was reduced from 20 months to 12 months, in Kolkata, the delay was reduced from 23 months to 14 months.
In spite of RERA Act triggering some progress in realty sector, some of the major challenges in the sector are still continuing-especially, the acute financial pressure being faced by realtors. Because of it, several realty projects became stranded. SWAMIH Investment Fund was floated by the Centre to complete the stranded projects – affordable and medium-sized housing projects. In the next three or four years, it was targeted to complete at least 10,000 houses. But the stranded housing units’ number is put at a staggering 4.50 lakh. It appears that the completion of these projects is not possible immediately.
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