A paradigm shift in real estate

If one was to chronicle the history of the Indian realty industry, May 1, 2017, will earn a special mention. Some may not agree, but I feel this was the day which started the process of transformation in overhauling the image of the real estate industry.

The commencement of Real Estate (Regulation and Development) Act, was like that proverbial wind of change, which transformed the dynamics of the industry. A game-changer, which brought a paradigm shift in the functional and operational modalities (for the betterment) of the sector in the last one year.

It’s for the first time that any regulation (pertaining to real estate) focused on addressing issues relating to the overall industry and all stakeholders concerned, and also allied sectors.

For the industry, it brings in discipline, governance and transparency within the prescribed regulatory framework. For the developers, it ensures a higher degree of efficiency by adopting the best practices, which will lead to the consolidation of the sector. Also, the buyers are assured that they will be protected under the Act. The Act assures them of quality product and timely delivery. And most importantly, it assures them of the mandatory paperwork, which otherwise builders give a slip to.

The advent of RERA amidst the widening differences between customers and developers is a great leveller. It not only brought back the confidence among end-users, but also gave the customers better clarity to make informed decisions while buying homes. More importantly, it laid down the guiding principles with regard to rights and obligations of all stakeholders involved. These positive additions have led to the creation of a robust and conducive ecosystem, benefits of which will be reaped for many years.

These structural changes have opened up new business avenues. One of the most visible change is the consolidation of the sector. A large number of serious players have come into the field. These new alliances ensure better planning, implementation and management of projects as smaller players can partner with the bigger brands, thus ensuring sustainable business continuity.

In the RERA environment, the main focus is on having all approvals and clearances from the authorities concerned before the commencement of a project. Hence, it becomes paramount to obtain timely clearances and approvals in order to avoid delays in execution due to procedural hindrances.

With RERA in place, the “Single Window Clearance” now no longer appears far away in the horizon. The industry is looking forward to the implementation of “Single Window Clearance” system, which will play an important role in helping developers reduce their average project time.

So, the net effect has been that the Act has ushered in more growth opportunities despite the initial challenges it had to face when introduced a year ago. In fact, the intent of RERA was to support the sector to shed its conventional cloaked nature and bring about a disruptive transformation, which slowly appears to be taking shape.

No doubt, it was a steep learning curve for all those involved as the industry was venturing into an uncharted territory. An entirely new requirement for the industry, which was immensely time-consuming, keeping in mind the quantum of complexities involved in the entire process. But as an industry, we have done well. We have not only conquered the mammoth task but also we are back to business as usual in no time — build and sell! With the changing dynamics, it’s crucial for us to mould ourselves into the new ecosystem to be on the top of our game.

The realty industry transcends from a de-facto system to an organised and regulated environment. In the process, this has revived the buyer sentiment which is evident in the strong latent demand in the last two quarters. Currently, it’s looking very promising and we are hoping that it will lead to improved strategic relations and communications between developers and home-buyers, thereby boosting the demand for homes across the country.

If 2017 was a year of uncertainty, 2018 is believed to be the beginning of better times for the real estate business. It will be the year which will usher in a plethora of opportunities, rewriting the script of Indian Real Estate landscape.

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(The author is managing director, Puravankara Limited)