All states, other than a few in the North East are likely to notify rules under RERA by the end of July, but the setting up of a permanent regulatory authority may take some time. The developers need to register their ongoing projects with RERA and need to stop seeking exemptions. A change in the business model is also necessary so as to manage the cash flow efficiently. RERA has brought about a change in the registration of projects and the recording of revenues. There are various concerns among the developers due to the lack of confidence among the buyers in the housing market. This is also due to uncertainties with the delivery of the projects. The builders have been asked to implement this law in letter in order to restore the confidence of the customers.
Twenty one states have already notified the rules under the law. All union territories have also notified. In five to six states, it is in the final stage. Hence, barring a few North Eastern States, the rules will be notified by the end of the month. Two states have already set up a permanent regulator while 18 states have interim regulators in place. It will still take time to set up a permanent authority but the interim regulators have been asked to start registering projects through both online and offline routes so that the business does not get affected. All the states have been asked to implement the law as soon as possible.
The next few months will be difficult for the market but the law would benefit the sector in the long term as investments from domestic and foreign institutions would be on a rise. The law promises to bring in transparency, efficiency as well as accountability in the Indian real estate sector by protecting the interests of the buyers through various means. In order to promote affordable housing, the department is looking at surplus government land as well as land available with private developers.
In order to give a boost to this sector, it is important that the interest rates come down further. RERA and GST will have a positive impact on this sector in the long term. Currently, the office space leasing segment is performing very well. A boost is needed in the residential projects currently under construction across various cities. Due to demonetization and the implementation of GST, the inventory in residential projects is consistently on a rise and the buyers are looking to sell them first before they lay out new projects.