Real Estate focusing on end-user; RERA streamlines sector
| Date :27-Oct-2019 |
By Vikas Vaidya :
SLOWDOWN in global investment,enforcement of registration from Real Estate Regulatory Authority (RERA), rare possibility of money getting parked, increase in ready reckoner rates are some of the reasons behind rise in number of unsold flats. Earlier cash money was getting parked in connivance with even theRegistrar. If a property was of worth Rs 10 lakh, Rs 3 lakh or 4 lakh were transacted in cash, reducing the real cost for which the charges of registration and stamp duty were less. With the increased ready reckoner rates people have to pay those many charges.
Secondly, now the source of money too also has to be revealed. ‘The Hitavada’ talked to some topdevelopers, builders, realtors who tried to unfold the causes behind reduction in buying the properties. Mahesh Sadhwani, President of CREDAI, Nagpur,feels it is psychological slowdown and will be reshaped again.“Confidencewas not there. People felt rates will come down further and they started the enquires most of which are fromendusers.Nowtheyarefeeling confident. Government is bringing everything to benefit end-users. GST benefit, Stamp duty benefit, Pradhan Mantri Awas Yojana (PMAY) benefit everythinghasbeendone forthe people. After RERA came into being, everything became transparent. Lot of policies were getting changed, laws were being changed. So we were in a transition period. Now everything has been settled. Gradually people will come to real estate.
People were afraid because of demonetisation.Now rate correction too was done. Builder too will have to think of his loss. It is buyers market and buildersal way stakes out his profit because unsold inventory he would not like to keep. People should buy now. It is a right time. It is my suggestion,” pointed out Sadhwani. Ritesh Sharma, well-known Developer, described, “I don’t think demonetisation or GST have major impact. Actually Government made RERA registration mandatory does have impact.
The rates of ready reckonerhave increased so naturally consumers have to pay more stamp duty and registration fees. In fact I must congratulate Government for bringing transparency in the business and beneficiary will be end-users. Anil Nair, former President of CREDAI Nagpur, described in his way. He explained, “Real estate is always attached to global market. It has close relation with stock market. After gold, people preferred real estate. If one has money he or she looked for real estate. This has been the global trend. Now stock has fallen down. Economy is going down. When stock comes down people withdraw money, this has been observed in real estate. After demonetisation and GST the traders have started looking at their businesses inwardly.
If you don’t pay tax then you are prosecuted. Every business has stopped growing. Unless common public don’t invest, real estate industry can not grow. End users number is maintained but 40% investors have vanished. Because of demonetisation and GST the investment portfolio has been reduced by the public in general. Real estate has to come down.” There is a panicky among buyers. Because of demonetisation prices of steel, cement and other building material have gone up. 100% billing has to be done so prices too got increased. According to experts, the market will further crush. With RERA in place people got confidence. Earlier there was a threat of getting deceived by builder which has gone now.The position will improve but there is a still time. Now real investment will come and not fake.
US is 22 trillion economy while in India we are 2.8. There is a lot of difference, so when it will come up in US, it will come to India, pointed out one builder on condition of anonymity. Dr Vijay N Dawda, Secretary of Vidarbha Realtors Association (VRA), agreed on what Sharma and Nair said. According to him, this new trend has given rise for builders to go for low-income buyers. “With Government’s will to provide home for everyone by 2022 and everybody is getting subsidy, new builders are going for small flats or redevelopment. In redevelopment cost of investment is less, no need to purchase the plot. With less industry boost, buying capacity too got reduced.
Higher middle class or rich class invested in the past which gave initial funding to builders. After RERA’s entry it becomes difficult for the investor to buy flat, invest the money, park it and afterwards depart. Earlier builder used to invest money and park the money and selling out flat.” One developer revealed,“The whole dealing was done without paying registration and stamp duty charges. Now it is not allowed. Investment has been reduced. People from Vidarbha cities like Chandrapur, Gadchiroli, Wardha, Yavatmal wanted one house for their wards staying in Nagpur.
But Nagpur end users don’t want residence in the outskirts whereas the people from outside Nagpur are buying these flats. New 5,000 flats are being launched. Low budget housing is getting boost. 90% market is of small flats where one could get flat worth Rs 12- 15 lakh. Around 500 plus flats are coming on Besa-Pipla road, Sadanand Group is coming up with 500, Om Shivam buildcon is constructing a huge scheme of 1,800 to 2,300 flats in MIHAN. Vrundavan city will have flats on 111 acre land.”
Abhijit Majumdar, Managing Director of Abhijit Realtors and Infraventures Pvt Ltd, disagrees with what is being said about the real estate sector. “I don’t think there is slowdown in real estate sector. Investors have been surely reduced. I think this is the good thing but I advise people to opt purchasing now. It is a best time to buy. End-buyers are responding enthusiastically. Pradhan Mantri Awas Yojana (PMAY) is also a positive step which would benefit those who never have thought of having their own houses. We must welcome it.”