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RERA is yet to be a nation-wide market force. The state governments have not taken a proactive approach in implementing RERA. A number of forces in the market are in play. The primary one is change aversion. Initially, RERA was expected to bring a change in the overall status quo of the design of the real estate industry in the country.
RERA has brought about a lot of transparency in the industry. The larger organizations have embraced RERA, and the regulations in the market, particularly in the unorganized segment, have been significant. However, certain players are not happy with the guidelines implemented by RERA, as it casts a significant impact on their business models. This is slowing down the implementation of RERA to a significant extent.
Apart from this, the individual states often come up with their own set of rules. Many of the states do not comply with the act implemented by the centre. This has been a major concern for the implementation of RERA. Certain developers are expecting RERA to bring about more favourable policies for them. This has been a key reason, for which the implementation of RERA in certain states is being delayed.
RERA and recovery of the market
The Indian real estate industry can recover in two ways. However, the quality of recovery differs to a great extent. These include:
Eliminating RERA: Although this is just an assumption, which is not likely to happen. Without RERA, the number of home launches wound increase a lot. The investors would be more interested in making short-term profits. This would leave the buyers at the mercy of the corrupt developers. The volume of buying and selling would increase, and the brokers would get the freedom to exploit the homebuyers once again. However, the results of this policy would be short-lived.
Integrating RERA guidelines: The other option is to incorporate the guidelines put forward by RERA and go for the gradual recovery process. Although this is likely to be a slow process, it will yield the desired results. The results of this system would be based on the dynamics of the market, and extremely durable. It will take time for the market to get adjusted to it. The small companies who are unable to comply with the guidelines of RERA may get eliminated from the competition. However, the market will become more transparent and this will attract more investments and funds.
The government is inclined in ushering the recovery implementing the RERA guidelines. However, the real estate companies are aware of the fact, that the process will be long and painful. However, the results will be favourable to the industry, and it will benefit the investors and sellers alike. This can bring about a massive rise in sales in the industry, strengthening it to a great extent. The lack of a regulatory body in the form of RERA can affect the transparency in the industry. Although RERA has not been implemented in the industry to the fullest potential, it has a lot in store for the real estate sector. Once implemented, it will benefit the industry to a great extent.
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