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Adityaram Group
June 10, 2017

Scrupulous Regulations are Making the Small - Time Developers Quivering - RERA.

Market analysts and investors are of the opinion that the Real Estate (Regulation and Development) Act, 2016 (RERA), with its consumer-centric approach, will be a game changer for the real estate industry. The new legislation, which many believe will have far-reaching implications, aims to address the grievances that buyers over the years had against developers. The act promises transparent property deals to ensure that the best interests of the buyers are always protected. Though large developers, investors, and experts across the country are welcoming the move, it’s however, going to be a tough road ahead for small-time promoters.

The implementation of the real estate regulation act will most likely force the weaker players to shut down their shops, which can temporarily lead to a short-term slowdown in the new property launches. Small to mid-size builders, who do not have the temperament or capacity to comply with the RERA regulations will be completely wiped out from the real estate market. This will eventually help the property market to consolidate, and create a more transparent environment for both buyers and developers alike.

Under the new real estate rule, developers cannot advertise, market, book, or offer to sell any plot, apartment, or a building, as the case may be, without getting it registered with the Real Estate Regulatory Authority. Small developers, who don’t have adequate liquidity, could land up in a severe crisis due to funding problems and cash crunch. Several mid to small size residential developers, to come out of this situation, are actively looking to collaborate with big players so that they can monetize their ongoing projects which are at various stages of completion.

Once RERA is implemented totally, it is almost certain that only the Organized and Reputed Promoters and Developers will be able to survive in the Real Estate Sector. It is also equally certain that in the near future, weak players will disappear from the scene, or at least be discouraged from initiating random new property launches..

The best strategy for the buyers will be to use the positive market conditions to their advantage by making property deals only with Strong, Credible Promoters and Builders with a good reputation and track record.

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